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THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


Digitized  by  tine  Internet  Arciiive 

in  2007  witii  funding  from 

IVIicrosoft  Corporation 


littp://www.arcliive.org/details/casesonlawofagenOOIiuffiala 


CASES 


ON 


THE   LAW  OF  AGENCY 


To  accompany  this  volume : 

THE  LAW  OF  AGENCY,  Including  the  Law  of  Prin- 
cipal AND  Agent  and  the  Law  of  Master  and 
Servant.  By  Ernest  W.  Huffcdt.  Second  Edition, 
Berised  and  Enlarged. 


CASES 


ON 

THE    LAW   OF  AGENCY 

INCLUDING 

THE  LAW  OF  PRINCIPAL  AND  AGENT 

AND 

THE  LAW  OF  MASTER  AND  SERVANT 

EDITED    BY 

ERNEST   W.  HUFFCUT 

PB0FES80B  OF  LAW  IN  THE  CORMELL  UKIVEBSITT  COLLEGE  OF  LAW 


SECOND  EDITION 

KEVISED    AND    ENLARGED 


BOSTON 
LITTLE,  BROWN,  AND  COMPANY 

1907 


1967 


Copyright,  1895, 
By  Ernest  W.  Huffcut. 

Copyright,  1907, 
Bt  Little,  Brown,  and  Company. 


Vtfnttis 
8.  J.  Paekhill  *  Co.,  Boston.  U.  S.  a. 


U. 


NOTE 

The  cases  which  follow  are  arranged  in  accordance 
with  the  analysis  of  the  editor's  second  edition  of  the 
Law  of  Agency  in  this  series.  The  second  edition  of 
the  text,  and,  correspondingly,  this  (the  second)  edition 
of  the  casebook,  include  both  the  Law  of  Principal  and 
Agent  and  the  Law  of  Master  and  Servant. 

E.  W.  H. 

Cornell  University  College  of  Law, 
1907. 


6710f^8 


TABLE   OF  CONTENTS. 


Table  of  Cases » 

BOOK   I. 
Principal  and  Agent. 

I.   Preliminary  Topics 1 

1.  Distinction  between  agent  and  servant 1 

2.  Same  representative  as  both  agent  and  servant 7 

3.  Construction  of  words  descriptive  of  service  in  statutes     ...  9 

PART   I. 

FORMATION   OF   THE   RELATION. 

II.   Formation  of  the  Relation  by  Agreement 11 

1.  Agreement  by  contract  or  conduct 11 

2.  Competency  of  parties 15 

3.  Joint  agents , 42 

4.  Form  of  contract 48 

III.  Formation  of  the  Relation  by  Ratification 57 

1.  Act  must  be  performed  in  behalf  of.  existing  person 57 

2.  Assent  may  be  express  or  impUed 74 

3.  Right  of  other  party  to  recede  before  ratification 99 

4.  Form  of  ratification 108 

5.  Legality  or  validity  of  act  ratified 110 

6.  Legal  effects  of  ratification 117 

IV.  Formation  of  the  Relation  by  Estoppel 127 

V.  Formation  of  the  Relation  by  Necessity      147 

VI.  Termination  of  the  Agency 166 

1.  By  accomplishment  of  purpose 166 

2.  By  revocation      . 168 

3.  By  operation  of  law 175 

4.  Irrevocable  agencies 191 

PART   II. 

LEGAL  EFFECT   AS   BETWEEN   PRINCIPAL  AND   AGENT. 

VII.   Obligations  of  Principal  to  Agent 209 

1.  Compensation  for  authorized  act 209 

2.  Compensation  for  gratuitous  service 210 


ft 


Viii  TABLE   OF   CONTENTS. 

3.  Compensation  dependent  upon  performance  of  conditions     .  212 

4.  Compensation  after  revocation  of  agency 222 

5.  Compensation  after  renunciation  of  agency 235 

6.  Compensation  where  agent  acts  for  both  parties 237 

7.  Compensation  for  illegal  services 248 

8.  Reimbursement  and  indemnity 250 

VIII.  Obligations  op  Agent  to  Principal 256 

1.  Obedience 256 

2.  Prudence      261 

3.  Good  faith 264 

4.  Accounting 270 

5.  Appointment  of  sub-agents 275 

6.  Obligations  of  gratuitous  agents 289 

PART   III. 

LEGAL  EFFECT   AS   BETWEEN   PRINCIPAL  AND   THIRD   PARTIES. 

IX.   Contract  of  Agent  in  Behalf  of  a  Disclosed  Principal     .  298 

1.  General  doctrine 298 

2.  Scope  of  particular  powers 319 

3.  Special  forms  of  agency 361 

a.  Factors 361 

b.  Brokers 303 

c.  Auctioneers 367 

d.  Attomeys-at-law 377 

e.  Bank  cashiers 386 

X.   Contract  of  Agent  in  Behalf  of  Undisclosed  Principal    .  389 

1.  Liability  of  undisclosed  principal:  general  rule 389 

2.  Same:  exception  as  to  state  of  accounts 394 

3.  Same:  exception  based  on  election 397 

4.  Same:  exception  as  to  sealed  instruments 410 

5.  Same:  exception  as  to  negotiable  instruments 418 

6.  Rights  of  undisclosed  principal :  general  rule 422 

7.  Same :  exception  as  to  state  of  accounts 427 

8.  Same :  exception  as  to  exclusive  credit  to  agent 435 

9.  Same :  exception  as  to  varying  written  instrument     ....  437 

XI.  Admissions  and  Declarations  of  Agent 441 

XII.  Notice  to  Agent 451 

XIII.  Liability  op  Principal  for  Torts  op  Agent 470 

1.  LiabiUty  for  torts  generally 470 

2.  Fraud  for  benefit  of  principal 472 

3.  Fraud  for  benefit  of  agent 480 

XIV.  LlABILFTY   OF   ThIRD    PeRSON   TO   PRrNCIPAL 496 

1.  Liability  upon  contracts 496 

2.  Liability  for  money  paid  under  duress,  mistake,  etc 496 

3.  Liability  for  property  diverted  by  agent .  497 

a.  General  rule 497 

b.  Exception :  Indicia  of  ownership 505 

c.  Exception:  Factors  Acts 507 

4.  Liability  for  collusive  fraud      519 

6.   Liability  in  equity  for  trust  funds  diverted  by  agent  ....  524 


TABLE  OF   CONTENTS. 


a 


PART  IV. 

LEGAL  EFFECT  AS   BETWEEN  AGENT  AND  THIRD   PARTIES. 

XV.   Contract  Relations  between  Agent  and  Third  Party     .    .  529 

1.  Liability  of  agent  upon  an  unauthorized  contract 529 

2.  Liability  of  agent  who  acts  for  incompetent  principal     .    .    .  535 

3.  Liability  of  agent  who  acts  for  fictitious  principal 538 

4.  Liability  of  agent  to  whom  exclusive  credit  is  given    ....  539 

5.  Liability  of  agent  who  acts  for  a  foreign  principal 542 

6.  Liability  of  agent  who  executes  sealed  contract  in  his  own  name  543 

7.  Liability  of  agent  who  executes  negotiable  instrument  in  his 

own  name 543 

a.  Construction  from  signature  alone 543 

b.  Construction  from  signature  and  recitals      550 

c.  Construction  from  signature  and  marginal  headings   .    .    .  554 

d.  Indorsers  of  bills  and  notes 560 

8.  Liability  of  agent  who  executes  contract  in  his  own  name  for 

undisclosed  principal 562 

9.  Liability  of  agent  who  executes  simple  contract  in  his  own 

name 564 

10.    Liability  of  agent  arising  from  interest  in  subject-matter.    .    .  565 

IL   Where  neither  principal  nor  agent  is  bound 566 

12.  Liability  of  agent  for  money  received  through  mistake  or 

fraud 567 

13.  Liability  of  third  person  to  agent 569 

XVL   Torts  between  Agent  and  Third  Party 570 

1.  Liability  of  agent  for  non-feasance 570 

2.  Liability  of  agent  for  misfeasance 578 


BOOK   II. 
Master  and  Servant. 

PART  I. 

WHO   IS   A   SERVANT? 

XVII.   Independent  Contractors ^ 583 

XVIII.   Transfer  of  Service 615 

XIX.   Compulsory  Employment  or  Service 631 

XX.  Sub-Servants  and  Volunteers     635 

PART   II. 
liability  of  master  for  torts  and  crimes  of  servant. 

XXI.  Liability    of    Master   to   Third    Persons    for  Torts    of 

Servant 646 


Z  TABLE  OF  CONTENTS. 

XXII.  LiABiLiTT  OF  Public  Agencies  or   PublJc   Charities   for 

Torts  of  Servants 660 

XXIII.   Liability  of  Master  for  Penalties  and  Crimes 693 

PART   III. 
liability  of  master  for  injuries  to  servant. 

XXIV.     LLA.BILITY    OF    MaSTER    TO    OnE    SERVANT    FOR    TORTS    OF    AN- 
OTHER Servant 705 

1.  The  fellow  servant  nile 705 

2.  Vice-principal  doctrines 725 

XXV.   Liability  of  Master  to  Servant  for  his  own  Torts     .    .    .  737 

1.  The  non-assignable  duties 737 

2.  Assumption  of  risk      ....  773 

3.  Assumption  of  risk  as  affected  by  statute       789 

4.  Distinction  between  assumption  of  risk  and  contributoiy 

negligence 815 

PART   IV. 

liability    of   SERVANT   FOR   TORTS. 

XXVI.   Servant's  Liability  for  Torts 816 


Index 825 


TABLE  OF  CASES. 


[Where  n.  Is  prefixed  to  the  page  number,  the  case  Is  referred  to  by  the  editor  In 
a  note.] 


Page 
Abbott  V.  Atlantic  Refining  Co.  438 
Abel  V.  President,  etc.,  D.  &  H. 

C.  Co.  765 

Adama  v.  University  Hospital  677 
Ahem  v.  Baker  171 

V.  Goodspeed  n.  334 

Alexander  v.  Barker  n.  273 

Allen  V.  Bryson  15,  210 

Alsever  v.  Minneapolis  &  St.  L. 

R.  Co.  654 

Amans  v.  Campbell  n.  563 

Amato  V.  Dreyfus  n.  249 

American  Loan  and  Trust  Co. 

V.  Billings  n.  204 

Amerieus  Oil  Co.  v.  Gurr  318 

Anderson  v.  Adams  n.  533 

Andrews  v.  -^tna  L.  Ins.  Co.  n.  103 
V.  Ramsay  &  Co.  245 

Armitage  v.  Widoe  n.  17 

Atchison,  etc.,  R.  v.  Reecher  n.  154 

Atlantic,  etc.,  R.  v.  Reisner  n.  154 

Atlantic  Transport  Co.  v.  Coneys  583 
Atlas  S.  S.  Co.  V.  Columbian 

Land  Co.  n.  542 

Atlec  V.  Bartholomew  n.  108 

Baker  v.  N.  Y.  Nat.  Exch.  Bk.  524 
Baldwin  Bros.  v.  Potter  271 

Baldwin  et  al.  i\  Burrows  et  al.  n.  479 
Baltzen  v.  Nicolay  533,  n.  553,  567 

Bank  of  Batavia  v.  N.  Y.,  L.  E., 

&  W.  R.  Co.  490 

Barkley  v.  Rensselaer  &  Sar.  R. 

Co.  173 

Barren  v.  Newby  403 

Bartlett  v.  Sparkman  n.  261 

Bartram  v.  Lloyd  n.  244 

Barwick  v.  Eng.  Joint  Stock  Bk.  472 
Bass  Dry  Goods  Co.  v.  Granite 

City  Mfg.  Co.  n.  314 

Bauman  v.  Jaffray  n.  406 

Baxter  v.  Sherman  n.  363,  432 

Baxter  &  Co.  v.  Jones  n.  294 

Beach  v.  Ficke  n.  407 

Beattie  v.  Butler  n.  203 

Bel  field  v.  National  Supply  Co.  430 
Bell  V.  Balls  369 

Benjamin  v.  Dockham  147 

Bennett  v.  Judson  477 

Bennett  v.  Lathrop  n.  38 


Bentley  v.  Doggett 
Berg  V.  Parsons 
Bergh  v.  Warner 
Berry  v.  Skinner 
Beymer  v.  Bonsall 


Page 
315 
603 
147 
n.  203 
397 


Biggs  V.  Evans  n.  127,  n.  312,  516 

Bishop   V.   American   Preserves 

Co.  n.  274 

Blackman  v.  West  Jersey  &  Sea- 
shore R.  Co.  447 
Blackstone  v.  Buttermore  191 
Bolton  Partners  v.  Lambert  101 
Boomer  v.  Wilbur  600 
Booth  V.  Barron  n.  406 
Boswell  V.  Barnhart  633 
Bovine  v.  Dent  n.  235 
Bradford  v.  Hanover  Fire  Ins. 

Co.  n.  283 

Bradish  v.  Belknap  146,  172 

Bradlee  v.  Boston  Glass  Manuf'y     550 
Brady  v.  Horvath  n.  273 

Bray  v.  Gunn  124,  n.  126 

Briggs  V.  Partridge    410,  543,  565,  509 
Brill  V.  Eddy  691 

Bristor  v.  Smith  n.  10 

British  Mut.  Bk.  Co.  v.  Cham- 
wood  Forest  R.  Co.  480 
Brittain  v.  Westall  353 
Britton  v.  Ferris                              n.  270 
Broderip  v.  Salomon                         n.  15 
Brookhouse  v.  Union  Pub.  Co.      n.  463 
Brookshire  v.  Brookshire  168 
Broughton  v.  Silloway                        377 
Brown  v.  Andrew                             n.  43 
V.  Reiman                                       401 
V.  Tainter  and  Lanpher             407 
V.  Travellers'  Life  Ins.  Co.    n.  385 
Brxice     v.     Central     Methodist 

Episcopal  Church  686 

Bryee  v.  Clark  80 

Buckley  v.  Humason  n.  249 

Bunker  v.  Miles  266 

Busch  V.  Wilcox  n.  94 

Butler  V.  Dorman  n.  346 

Byrne  v.  Massasoit  Packing  Co.      317 

Cadigan  v.  Crabtree  230 

Cairo,  etc.,  R.  v.  Mahoney  n.  154 

Cammeyer  v.  The  Churches  n.  48 

Campbell  v.  Cothran  n.  384 


XII 


TABLE  OP  CASES. 


Page 
Cannell  v.  Smith  237 

Cannon  v.  Henry  322 

Carpenter  v.  German  Am.  Ins. 

Co.  464 

Carroll  v.  State  697 

Carstens  v.  McReavy  334 

Casco  Nat.  Bk.  v.  Clark  558 

Cassiday  v.  McKenzie  n.  184 

Cedar     Rapids,     etc.,     Co.     v. 

Stewart  n.  43 

Central  Trust  Co.  v.  Bridges  11 

V.  Folsom  n.  142 

Chambers  v.  Seay  192 

Chase  v.  Swift  n.  162 

Chastain  v.  Zaeh  40 

Chicago  &  A.  Ry.  Co.  v.  Swan      n.  725 
Chicago  and  Eastern  111.  R.  R. 

Co.  V.  White  721 

Chipman  v.  Foster  557 

Church  V.  Chicago,  M.  &  St.  P. 

Ry.  Co.  639 

City  of  Erie  v.  Caulkins  n.  591 

City    Trust,    etc.,    Co.    v.    Am. 

Brewing  Co.  393 

Clark  V.  Dillman  133 

V.  Jones  n.  255 

Clarkson  Home  v.  Mo.,  K.  &  J. 

R.  Co.  n.  486 

Cleveland  v.  Pearl  &  Co.  541 

Cochran  v.  Baker  n.  533 

Codd  Co.  V.  Parker  403 

Cohen  v.  Dry  Dock  &  C.  R.  R. 

Co.  647 

Cole  V.  N.  W.  Bank  n.  509 

Coleman  v.  Bank  n.  542 

CoUen  V.  Wright  n.  532 

Collins  V.  Cooper  n.  320 

Columbia  Mill  Co.  v.  Nat.  Bk. 

of  Com.  130 

Combs  V.  Scott  93 

Comfort  V.  Graham  538 

Com.  Bank  of  Lake  Erie  v.  Norton  275 
Commonwealth  ex  rel.  Hall  v. 

Canal  Commissioners  45 

Commonwealth  v.  Kelley  696 

V.  Morgan  702 

V.  Nichols  693 

V.  Wachendorf  696 

Cone  V.  Delaware,  L.  &  W.  Rail- 
road Co.  755 
Congar    v.    Chicago    &    North- 
western R.  Co.                                 451 
Conkey  v.  Bond                                    265 
Constant  v.  Rector                           n.  48 
V.  Univ.  of  Rochester                  458 
Cooley  V.  O'Connor                           n.  48 
V.  Perrine                                     330 
Coon  V.  The  Syracuse  &  Utica 

Railroad  Co.  711 

Cooper  V.  N.  Y.  C,  etc.,  R.  n.  158 

Cosgrove  v.  Ogden  645 

Coursolle  v.  Weyerhauser       17,  n.  126 


Cowan  V.  Sargent  Mfg.  Co. 

319 

Cox  V.  Bowling 

175 

Craft  V.  S.  Boston  R.  Co. 

461 

Crane  v.  Gruenewald 

139 

Crawford  v.  Whittaker 

n.  346 

Cregan  v.  Marston 

758 

Cribben  v.  Deal 

n.54 

Crisp  V.  United  States  &  Aus- 

tralasia S.  S.  Co. 

n.  633 

Crispin  v.  Babbitt 

731 

Culver  V.  City  of  Streator 

662 

Curtis  V.  Williamson 

n.400 

Cutter  V.  Gillette 

222 

D'Arcy  v.  Lyle 

253 

Davis  V.  Maxwell 

236 

Davis  Coal  Co.  v.  PoUand 

804,  815 

Davison  v.  Holden 

n.  38 

Davol  V.  Quimby 

169 

Daylight  Burner  Co.  v.  Odlin 

350,  n.  363 
Deakin  v.  Underwood  43,  n.  190 

Decell   V.    Hazlehurst  Oil,   etc., 

Co.  n.  270,  271 

Delafield  v.  Smith  n.  255 

Delano  v.  Case  295 

Deming  v.  The  Terminal  Rail- 
way of  BuflFalo  608 
Dempsey  v.  Chambers  119,  472,  645 
V.  Sawyer  n.  815 
Denike  v.  De  Graaf  413 
De  Reraer  v.  Brown  563 
Deweese  v.  Muff  n.  184 
Dexter  v.  Hall  20 
Dibbins  v.  Dibbins  n.  1 1 1 
Dick  V.  Page  &  Bacon  n.  184 
Dickson  v.  Waldron  n.  692 
Distilled  Spirits,  The  453 
Dodge  V.  Hatchett  n.  270 
V.  Hopkins  106 
Doe  V.  Goldwin  n.  Ill 
Donnan  v.  Adams  n.  337 
Donovan  v.  Laing,  etc.,  Syndicate  615 
V.  Weed  219 
Doty  V.  Miller  n.  214 
Dowd  V.  N.  Y.,  O.  &  W.  Ry.  Co.  n.  815 
Drew  V.  Nunn  22,  145,  187 
Driscoll  V.  Towle  618 
Drummond  v.  Humphrey  n.  25 1 
Durbrow  v.  Eppens  n.  205 
Dusar  v.  Perit  n.  261 
Dutton  V.  Amesbury  Nat.  Bank        591 

Eastwood  V.  Retsof  Mining  Co.  767 

Eberts  v.  Selover  91 

Edgerton  v.  Thomas  127 

Eiehbaum  v.  Irons  32 

Eldridge  *.  Holway  278 

Elledge  v.  R.  Co.  450 

Ellis  V.  Southern  Ry.  Co.  n.  822 

Ely  V.  Parsons  661 

Emery's  Sons  v.  Traders'  Bank  ».  406 


TABLE   OF   CASES. 


XUl 


Page 

Engel  V. 

Eureka  Club 

n.599 

English 

V.  Amidon 

743 

Euting 

V.  Chicago  & 

N. 

W. 

R. 

Co. 

n.  fio7 

Evans  v 

.  Fearne 

n.  208 

V.  Root 

25  S 

Evers  v. 

Krouse 

651 

n.  533 
187 

n.  270 

498 

705 

483 

670 

n.  50 

773 


Fairly  v.  Wappos  Mills  n.  249 

Falksen  v.  Falls  City  State  Bank  n.  200 
Farmers',    etc.,    Trust    Co.    v. 

Floyd 
Farmers'  Loan  &  Trust  Co.  v. 

Wilson 
Farmers'    Warehouse    Ass'n    v. 

Montgomery 
Farquharson    Bros.    &    Co.    v. 

King  &  Co. 
Farwell  v.  The  Boston  and  Wor- 
cester Railroad  Corporation 
Fifth  Ave.  Bk.  v.  Forty-Second 

St.  &  G.  St.  F.  Co. 
Fire  Insurance  Patrol  v.  Boyd 
Fitch  V.  Steam  Mill  Co. 
Fitzgerald  v.  Connecticut  River 

Paper  Co. 
Flesh  V.  Lindsay  n.  30,  31 

Flike  V.  The  Boston  and  Albany 

Railroad  Company  737 

Floyd  V.  Patterson  n.  274 

Foerderer  v.  Tradesmen's  Nat. 

Bk.  of  N.  Y.  512 

Forrestier  v.  Bordman  260 

Fowler  v.  Bowery  Savings  Bank  n.  407 
V.  Trull  94 

Fradley  v.  Hyland  n.  397 

Frankland  v.  Johnson  552 

Franklin  Fire  Ins.  Co.  v.  Bradford  280 
Friedlander  v.  Tex.  &  Pac.  R. 

Co.  487 

Fuller  V.  Jewett  749 

Gardner  v.  Gardner  53 

Garvey  v.  Jarvis  72 

Gates  V.  Brower                  n.  150,  n.  542 

Geisinger  v.  Beyl  264 

Gelatt  V.  Ridge  123 

Gilbert  v.  American  Surety  Co.  n.  274 

Gilliam  v.  Brown  n.  272 

Glover  v.  Henderson  226 

Godshaw  v.  J.  W.  Struck  &  Bro.  n.l6l 

Goodrich  v.  Houghton  n.  272 

Goodwin  v.  Bowden  206 

Gordon  v.  Bulkeley  51 

Gower  v.  Emery  n.  25 1 

Grandin  v.  Emmons  n.  203 

Grant  V.  Beard  117 

V.  Gold,  etc.,  Syndicate  n.  523 

V.  Ludlow's  Adm'r  n.  295 

Green  v.  Hugo  n.  266 

V.  Miller  n.  43 


Page 
Greenberg  v.  Whitcomb  Lumber 

Co.  et  al.  819 

Greenburg  v.  Palmieri  n.  400 

Greenfield  Bank  v.  Crafts  115 

Grcenleaf  v.  Moody  n.  261 

Guelich  v.  Nat.  State  Bk.  285 

Guerney  v.  St.  Paul,  etc.,  Ry.       n.  251 
Gunning  System  v.  Lapointe  779 

Gunter  v.  Stuart  441 

Guthrie  v.  Armstrong  n.  43 

Gwilliam  v.  T^vist  102 

Haines  v.  Starkey  467 

Halbot  V.  Lens  n.  532 

Halbronn  v.  International  Horse 


Agency 

n.  255 

Hall  V.  Bliss 

n.  20  { 

Haluptzok    V.    Great   Northern 

Railway  Company                   635,  645 

Hambro  v.  Burnand 

307 

Hand  v.  Cole 

n.9 

Handley  v.  Company 

n.  742 

Hanford  v.  McNair 

50 

Hannan's,  etc.,  Co.,  In  re 

n.201 

Hannon  v.  Siegel-Cooper  Co. 

146i  470,  645 

Harding  v.  Boston 

n.591 

Hardy  v.  Jones 

W.274 

V.  Waters 

n.  19 

Harper  v.  Bank 

420 

Harris  v.  Simmerman 

3  9 

Haskell  v.  Starbird 

475 

Hastings  v.  Dollarhide 

n.  19 

Hawke  v.  Brown                 n.  589, 

n.  608 

Hawley  v.  Keeler 

n.43 

Haydock  v.  Stow 

n.  338 

Hayward  v.  Langmaid 

69 

Hearns  v.  The  Waterbury  Hos- 

pital 

683 

Heath  v.  Goslin 

n.  35 

V.  Nutter 

108 

V.  Stoddard 

310 

HeflFron  v.  Pollard 

n.541 

Hegenmyer  v.  Marks              n.  269,  523 

Heinemann  v.  Heard 

261 

Helber  v.  Schantz 

275 

Henry  v.  Heeb 

».  115 

Herring  v.  Skaggs 

325 

Hertzler  v.  Geigley 

n.272 

Hess  V.  Rau 

204 

Hibbard  v.  Stein 

».  347 

Higgins  V.  Moore 

363 

V.  Senior 

564 

Hippisley  v.  Knee  Brothers 

246 

Hirshfield  v.  Waldron 

n.  342 

Hitchcock  V.  Buchanan 

556 

Holden  v.  Starks 

221 

Holmes  v.  Cathcart 

267 

V.  McAllister 

160 

Homer     Ramsdell     Transporta- 

tion Company  v.  La  Compag- 

nie  G6n6rale  Transatlantique 

631 

XIV 


TABLE   OF   CASES. 


Page 
Horaii  V.  Hughea  562 

Houseman  v.  Gerard  Mut.  Bldg. 

&  L.  Ass'n  455 

Hovenden  r.  Millhoff  n.  523 

Howe  V.  Buflalo,  N.  Y.  &  E.  R. 

Co.  252 

Hubbard  v.  Matthews  188 

V.  Tenbrook  390 

Humble  f.  Hunter  437 

Humphrey  v.  Eddy  Transporta- 
tion Co.  n.  246 
Hunt  V.  Rousmanier's  Adm'rs  195 
Huntington  v.  Knox                    422,  496 
Hyatt  V.  Clark                             76,  n.  97 

Indianapolis,  etc.,  R.  v.  Morris    n.  154 
Irvine  v.  Watson  394 

Irwin  V.  Currie  n.  274 

Ish  V.  Crane  n.  184,  n.  337 

Ishara  V.  Post  296 


Jackson  v.  Norfolk  and  W. 

R. 

Co. 

n.  736 

Jackson  Paper  Co.  v.  Commer- 

cial Bank 

n.  340 

Jansen  v.  Williams 

n.246 

John  ^Matthews  Apparatus 

Co. 

V.  Renz 

n.  346 

Johnson  v.  Briscoe 

n.  150 

V.  Dodge 

48 

V.  Hulings 

n.249 

V.  Johnson 

n.  203 

V.  N.  Y.  C.  R. 

».260 

V.  Williams 

».249 

Johnston  v.  Milwaukee  &  Wyo. 

Inv.  Co.  . 

135 

Jones  V.  Atkinson 

74 

V.  Avery 

n.  9 

V.  Harrell 

444 

V.  Scullard 

617 

Judson  V.  Gray 

n.  384 

V.  Sturges 

n.261 

Kalley  v.  Baker 

212 

Kansas  Nat.  Bk.  v.  Bay 

549 

Kaulback  v.  Churchill 

542 

Kaye  v.  Brett 

n.342 

Kayton  v.  Barnett 

389 

Keenan  v.  Southworth 

660 

Keidan  v.  Winegar 

546 

Keighley,    Maxsted    &    Co.    v, 

Durant  04,  394 

Kelley  v.  Newburyport  Horse  R. 

Co.  97 

Kelly  V.  Bowerman  n.  201 

V.  The  Mayor,  etc.,  of  New 

York  589 

V.  Thuey  539,  569 

Kilpatrick  v.  Grand  Trunk  Ry. 

Co.  797,  815 

Kindig  v.  March  207 

Kingan  &  Co.  v.  Silvers         1,  9,  n.  278 


Page 

Ivingsley  v.  Davis  398,  n.  40(5 

Kinnard  r.  Willmore  «.  263 

Knapp  V.  Alvord  199 

Koehler  v.  N.  Y.  Steam  Co.  n.  764 

Kozel  V.  Dearlove  109 

Kroeger  v.  Pitcairn  529 


Lacy  V.  Getman 

170 

La  Farge  v.  Kneeland 

567 

Laing  v.  Butler 

396 

Law  V.  Stokes 

340 

Lawall  V.  Groman 

444 

Lawrence  v.  Shipman 

596 

I^emon  v.  Grosskopf 

n 

272 

Leonard  v.  Poole 

n 

274 

Levy  V.  Spencer 

n 

248 

Levy,  Simon  &  Co.  v.  Brown 

379 

Lewis  V.  Denison 

n 

248 

Lindquist  v.  Dickson 

399 

Linnehan  v.  Rollins 

587 

Lister  v.  Stubbs 

n 

267 

Loeb  &  Bro.  v.  Drake  ford 

42 

Long  V.  Thayer  185,  566 

Lough  V.  John  Davis  &  Co.  570 

Louisville  &  N.  R.  Co.  v.  Dillard  n.  720 
V.  Miller  770 

Louisville,  etc.,  Ry.  v.  Smith  158 

Lyon  V.  Pollock  7i.  337 

McArthur  v.  Times  Printing  Co. 

59,  n.  538 
McCabe  v.  Goodfellow  35 

McCarthy  v.  Ritch  n.  743 

MeCauley  v.  Brown  505 

McClintock  v.  South  Penn  Oil 

Co.  103 

M'Cord  V.  W.  U.  Tel.  Co.  492,  645 

McCormick  v.  Joseph  457 

McCrary  v.  Ruddick  209 

McCroskey  v.  Hamilton  277 

McCullough  V.  Hitchcock  *    337 

McEntyre  v.  Levi  Cotton  Mills  n.  441 
McFarlan  Carriage  Co.  v.  Potter  783 
Mclntyre  v.  Park  109 

McKay  v.  Williams  n.  206 

McKindley  v.  Dunham  344 

McKinley  v.  Williams  n.  246 

McLean  v.  Ficke  n.  407 

MeMuUen  v.  Hoffman  n.  274 

McNeil  V.   Boston  Chamber  of 

Commerce  n.  48 

McNitt  V.  Dix  n.  266 

McTaggart    v.    The    Eastman's 

Company  716 

Macfarland  v.  Heim  n.  30 

Mackenzie  v.  Johnston  270 

Madigan  v.  Oceanic  Steam  Nav. 

Co.  746 

Maguire  v.  Selden  133 

Mahoney  v.  Dore  n.  11^ 

Malay    v.    The    Mount   Morris 

Electric  Light  Company  740 


TABLE  OF   CASES. 


xr 


Page 
Manker  v.  W.  U.  Tel.  Co.  426 

Manufacturers    &    T.    Bk.    v. 

Love  418 

Marquette,  etc.,  R.  v.  Taft  n.  154 

Martin  v.  Chicago,  R.  I.  &  P. 

R.  Co.  809 

]Martine  v.  International  L,  Ins. 

Soc.  189 

Marvin  v.  Brooks  n.  270 

Mast  V.  Kern  733 

Mayor,  etc.,  of  Salford  v.  Lever  519 
Mechanics'    Bk.    of   Alexandria 

V.  Bk.  of  Columbia  554 

Meinhardt  v.  Newman  n.  184 

Melvin  v.  Pabst  BrcAving  Co.  n.  461 
Merchants'  Bank  v.  State  Bank  386 
Merchants',    etc.,    Nat.    Bk.    v.  « 

Ohio  Valley  Furniture  Co.  n.  306 
Slerrell  v.  Witherby  n.  542 

Merritt  v.  Merritt  25,  187 

^lexican  Banking  Co.  v.  Lich- 

tenstein  n.  272 

Mej'er,  etc.,  Co.  v.  Stone  &  Co.  n.  350 
Jliiford     Borough     v.     Milford 

Water  Co.  Ill 

IMiller  v.  McDonald  n.  203 

Montague  v.  Forwood  "  427 

Montross  v.  Eddy  242 

Moore  v.  Appleton  250 

V.  Weston  n.  185 

Morse  v.  State  696 

Moulton  V.  Bowker  377 

Murphy  v.  Boston  and  Albany 

R.  Co.  752 

Murray  v.  Dwight  620 

V.  Usher  n.  823 

Muth  V.  Goddard  n.  204 


Narramore  v.  Cleveland,  C,  C. 

&  St.  L.  Ry.  Co.  789,  815 

National  Bank  v.  Mt.  Tabor  n.  47 

Navulshaw  v.  Brownrigg  n.  509 

Neagle  v.  Syracuse,  etc.,  R.  n.  755 

Neale  v.  Gordon-Lennox  n.  379 

Nelson  v.  Cowing  n.  333 

New  Eng.  R.  R.  Co.  v.  Conroy  n.  734 
New   Omaha  Tliomson-Houston 

Electric  Light  Co.  v.  Baldwin  725 
N.  Y.  Iron  Mine  v.  First  Nat. 

Bk.  of  Negaunee  298,  n.  340 

Nixon  V.  Brown  n.  506 

Noecker  v.  People  701 

Norfolk  and  Western  R.  Co.  v. 

Hoover  n.  742,  n.  743 

Norman  v.  Roseman  n.  248 

North  Carolina  Ry.  v.  Swep- 

son  .  n.  43 

Northern  Central  Ry.  v.  State  n.  154 
Northumberland  Ave.  Hotel  Co., 

In  re  57,  n.  538 

Norton  v.  Blinn  273 


Page 
Norwalk  Gaslight  Co.  v.  Borough 

of  Norwalk  n.  591 

Norwicli  University  v.  Denny       n.  277 

Obertoni    v.    Boston    &    Maine 

Railroad  658 

Ohlquest  v.  Farwell  &  Co.  378 

O'Neill  V.  Sinclair  n.  249 

Osborne  v.  Morgan  816 

Pacific  Coast  Co.  v.  Anderson       n.  201 
Pack  V.  The  Mayor,  etc.  n.  590 

Packard  v.  Stephani  n.  385 

Paige  V.  Stone  n.  542 

Park  V.  N.  Y.  C.  and  H.  R.  R. 

R.  Co.  n.  742 

Parks  V.  Northwestern  Univer- 
sity 674 
Patterson  v.  Lippincott  '  n.  19,  535 
Payne  v.  Lord  Leconfield  367 
V.  Potter  352 
Pennsylvania  R.  Co.  v.  Gary  n.  158 
People  V.  Globe  Mut.  L.  Ins.  Co.  232 
People's  Bank  v.  St.  Anthony's 

Church  n.  48 

Petrel,  Tlie  713 

Phila.,  W.  &  B.  R.  Co.  v.  Cowell         86 
Philpot  V.  Bingham  15 

Pickering  v.  Busk  361,  507 

Pickert  v.  Marston  323 

Pinckney  v.  Hagadom  375 

Pittsburgh,  etc.-,  R.  v.  Sullivan     n.  158 
Powell  V.  Evena  n.  267 

V.  Wade  425 

Power  V.  First  Nat.  Bk.  283 

Price  V.  The  Wisconsin  Marine 

and  Fire  Ins.  Co.  n.  512 

Prince    v.   Eighth    St.    Baptist 
Church  n.  249 

Quinn  v.  Dresbach  143 

Raney  v.  Weed  ».  162 
Ranger  v.  Thalmann  n.  419 
Read  v.  Anderson  n.  205,  n.  206 
Reilly  v.  Phillips  n.  203 
Rendell  v.  Harriman  422,  543 
Rice  V.  Wood  239 
Richardson  v.  Brix  248 
V.  Carbon  Hill  Coal  Co.  n.  685 
Riehl  V.  Evansville  Foundry  Ass'n  526 
Right  d.  Fisher  v.  Cuthell  110 
Rincicotti  v.  O'Brien  Contract- 
ing Co.  761 
Ripley  v.  Cochran  312 
Rippe  V.  Stodgill  n.  270 
Robinson    Machine    Works  v. 

Vorse  n.  263 

Roche  V.  Smith  214 

Rogers,  ex  parte  n.  43 

Roland  v.  Coleman  203 

Rollins  V.  Phelps  n.  43 


rvi 


TABLE  OF  CASES. 


Page 
Roselle  v.  Becksmeier  n.  272 

Rowe  V.  Rand  166,  569 

Rundle  v.  Cutting  n.  43 

Rutland   &   Burlington   R.   Co. 

V.  Lincoln  76 


Salisbury  tJ.  Brisbane  n.  43 

Samonset  v.  Mesnager  n.  263 

Sanger  v.  Warren  n.  417 
Saugerties,  etc.,  Co,  v.  Miller        n.  319 

Sawyer  v.  Mayhew  n.  2b3 

Schmidt  v.  Vanderveer  650 
School    District   v.    ^tna   Ins. 

Co.  n.  126 

Scott  V.  Lloyd  n.  248 

V.  McGrath  ».  333 

Sessions  v.  Block  n.  406 

Sharp  V.  Erie  R.  Co.  n.  692 

Shiells  V.  Blackbume  294 

Shoninger  v.  Peabody  >  l   n.  92 

Short  V.  Millard  '      241 

Silver  v.  Jordan  n.  406 

Simon  v.  Johnson  n.  348 

Simonton  v.  First  N.  Bk.  n.  207 

Singer  Mfg.  Co.  v.  Rahn  7,  472 

Sizer  v.  Daniels  n.  35 

Smith  V.  Blackley  ».  274 

V.  Gibson  n.  340 

V.  Kerr  n.  50 

V.  Milwaukee  Builders',  etc., 

Exchange        -  n.  591 

V.  Tracy  328 
Souhegan   Nat.    Bk.    v.   Board- 
man  560 
Spelman  v.  Grold  Coin  Mining, 

etc.,  Co.  n.  162 

Spencer  v.  Huntington  n.  413 

Stainer  v.  Tysen  304 

Stanton  v.  Bell  n.  295 
Star    Brewery    Co.    v.    United 

Brewery  Co.  n.  274 

State  V.  McCance  697 

State  of  Minn.  v.  Young  53 

SteflFens  v.  Nelson  128 
Stephenson  v.  N.  Y.  &,  Harlem 

R.  n.  158 

Stevens  v.  Sessa  n.  201 

V.  Wilson  507 

Stevenson  v.  Ewing  n.  249 

V.  Mortimer  496,  569 

Stewart  v.  Stone  n.  178 

V.  Woodward  n.  92,  321 

Stikeman  v.  Flack  n.  39 

Strasser  v.  Conklin  82 

Street    Railway     Company  v. 

Bolton  641 

Streeter,  Jr.,  Co.  v.  Janu  416 

Strother  v.  Law  201 

Stuart  V.  Hayden  n.  406 

Sutherland  v.  Wyer  224 

Swazey  v.  Union  Mfg.  Co.  n.  154 


Page 

Sweeting  v.  Pearce 

359 

Swim  V.  Wilson 

679 

Talbot  V.  Bowen 

40 

Talmage  v.  Bierhause            n.  328,  329 

Taylor  v.  Starkey 

350 

Terre  Haute   &  Ind.  R.  Co.  v. 

McMurray 

152 

Terry  v.  Birmingham  Nat.  Bk. 

244 

V.  Munger 

n.  407 

Terwilliger  v.  Ontario,  etc.,  R. 

Co. 

199 

Thilmany    v.    Iowa    Paper-Bag 

Co. 

n.535 

Thomas  v.  Funkhouser 

263 

Thompson  v.  Bamum 

497 

Thorne  v.  Deas 

289 

Tice  V.  Gallup 

333 

Tiedemann    and    Ledermann 

Fr&res,  In  re 

n.  103 

Toledo,  etc.,  Ry.  v.  Prince 

n.  154 

V.  Rodrigues 

«.  154 

Tompkins  v.  Machine  Co. 

n.772 

Towle  V.  Dresser 

n.  19 

Trainer  v.  Morison 

347 

Triggs  V.  Jones 

124 

Trueblood  v.  Trueblood 

n.  17 

Trustees,  etc.,  of  Easthampton 

V.  Bowman 

96 

Turner  v.  Bondalier 

n.  17 

V.  Goldsmith 

176 

Tuttle  V.  Tuttle  Co. 

n.62 

Tyler  v.  Sanborn 

n.266 

T^rrel  v.  Hammerstein 

384 

Tyson  v.  Bauland  Co. 

n.692 

Union  Pacific  Railroad  Company 

V.  Erickson  717 

Union  Trust  Co.  v.  McKeon        n.  145 
Uppington  v.  City  of  New  York  n.  691 


Vail  V.  Meyer 

30 

Valentine  v.  Piper 

n.337 

Van  Antwerp  v.  Linton 

821 

Van  Dyke  v.  Van  Dyke 

415 

Van  Praagh  v.  Everidge 

n.373 

Van  Sickle  v.  Keith 

n.446 

Vamum  v.  Meserve 

n.  203 

Vennum  v.  Gregory 

n.246 

Vicksburg,  etc.,  R.  v.  O'Brien 

n.450 

Vogel  V.  American  Bridge  Co. 

n.  749 

Wadsworth  v.  Adams 

n.246 

Wainwright  v.  Wilkinson 

n.  17 

Wait  V.  Borne 

n.334 

Walker  v.  Barrington 

170 

V.  Great  Western  Ry. 

n.  154 

Walsh  V.  Curley 

151 

Walter  v.  James 

99 

Walton  V.  Clark 

211 

Wambole  v.  Foote 

n.  17 

Wamsley  v.  Darragh 

n.43 

TABLE  OF   CASES. 


XVU 


Page 
Wanamaker  v.  Weaver  n.  150 

Waples  V.  Hastings  n.  17 

Ward  V.  Smith  357 

Warren  v.  Holbrook  n.  270 

Watteau  v.  Fenwick  391 

Watts  V.  Howard  313 

Weaver  v.  Cornell  n.  277 

V.  Fisher  n.  270 

Weber  v.  Bridgman  181 

V.  Weber  578 

Welsh  V.  Village  of  Rutland  664 

Western  Publ.  House  v.  Dist. 

Tp.  of  Rock  62,  n.  638 

Western  Stone  Co.  v.  Whalen  n.  742 
Western  Wheeled  Scraper  Co.  v. 

McMillen  548 

Wheatland  v.  Pryor  465 

Wheeler  v.  Northwestern  Sleigh 

Co.  80 

Wheeler  &  Wilson  Mfg.  Co.  v. 

Aughey  84,  480 

Whitcomb  v.  Bacon  217 

White  V.  Dahlquist  Mfg.  Co.  373 

V.  Miller  442 

Whitfield  v.  City  of  Paris  n.  664 

V.  Huling  n.  249 


Page 
Whitley  v.  James  n.  91 

Whitney  v.  Dutch  n,  19 

V.  Martine  n.  263 

17.  Merchants'  Union  Exp. 

Co.  256 

Wicktorwitz  v.  Farmers'  Ins.  Co.  445 
Wildberger  v.  Hartford  Ins.  Co.  n.  266 
William  Deering  &  Co.  v.  Kelso  338 
Williams  v.  Higgins  n.  295 

V.  School  District  n.  48 

Williamson  v.  Cambridge  R.  Co.     449 

V.  Richardson  ji.  170 

Willingham  v.  Rushing  n.  205 

Wilson  V.  Mason  n.  222 

V,  Smales  566 

Wilts  V.  Morrell  n.  260 

Winchester  v.  Howard  435 

Winter  v.  McMillan  n.  266 

Wood  V.  McCain  122 

Woolfe  V.  Home  377,  565 

Workman  v.  Wright  112 

Worrall  v.  Munn  n.  5 1 

Wycoflf  V.  Davis  70 

Yordy  v.  Marshall  County  n.  4o0 

Yount  V.  Denning  n.  249 


CASES  ON  AGENCY. 
BOOK   I. 

PEIXCIPAL    AND    AGENT. 

CHAPTER    I. 

Preliminary   Topics. 

1.  Distinction  between  Agent  and  Servant. 

KINGAN  &   CO.  V.   SILVEKS. 

13  Ind.  App.  80.     1895. 

LoTZ,  J.  The  appellant  was  the  plaintiff  and  the  appellees  the 
defendants  in  the  court  below.  The  complaint  is  in  one  paragraph, 
and  alleges  that  on  September  25,  1888,  the  defendants,  at  Lebanon, 
Ind.,  executed  to  the  plaintiff  the  following  note : 

$388.03,  Lebanon,  Ind.,  Sept.  25,  1888. 

Ninety  days  after  date  we  promise  to  pay  to  the  order  of  Kingan  and  Co., 
at  the  Meridian  National  Bank  of  Indianapolis,  Ind.,  three  hundred  and 
eighty-eight  and  03-100  dollars,  with  eight  per  cent,  interest  after  maturity 
until  paid,  and  five  (5)  per  cent  attorney's  fees;  value  received;  without  any 
relief  from  valuation  or  appraisement  laws.  And  it  is  hereby  understood 
that  the  drawers  and  indorsers  severally  waive  presentment  for  payment,  pro- 
test, and  notice  of  protest,  and  nonpayment  of  this  note. 

W.  F.  Silvers. 
Jakes  Silvejw. 

Due  Dec.  24,  1888. 

The  complaint  further  alleges  that  the  note  was  procured  from 
defendants  by  the  plaintiff's  travelling  salesman,  one  W.  H.  Nichols ; 
that  said  salesman  was  not  a  general  agent,  and  had  no  general 
authority  to  make  settlements  or  take  notes  on  plaintiff's  account,  nor 
was  that  a  part  of  his  duties ;  that,  being  about  to  go  to  Lebanon  in 
the  course  of  his  duties  as  such  travelling  salesman,  the  plaintiff 
instructed  him  to  procure  for  plaintiff  from  defendants  a  note  on 
account  of  an  indebtedness  to  plaintiff  amounting  to  $388.03;  that 
this  agent  accordingly  procured  the  note  sued  upon ;  that,  after  the 
execution  of  the  note,  the  agent  took  it  to  another  part  of  Lebanon, 
entirely  away  from  and  out  of  communication  with  defendants,  or 
either  of  them,  and  there,  while  he  was  in  the  process  of  conveying 

1 


2  KINGAX   &    CO.   V.    SILVERS.  [CHAP.   I. 

the  note  to  plaintifiF,  and  without  the  authority  or  knowledge  or  con- 
cent of  the  plaintiff  or  of  the  defendants  or  either  of  them,  he  altered 
the  note  by  striking  out  the  words  "  after  maturity  "  and  inserting  the 
words  "from  date,"  so  as  to  make  the  note  read,  "with  eight  (8) 
per  cent  interest  from  date ; "  that  the  agent  then  transmitted  the 
note  to  plaintiff,  but  did  not  inform  plaintiff'  of  the  alteration,  nor  did 
plaintiff  have  any  knowledge  of  it  until  after  the  note  became  due, 
and  was  sent  to  I^ebanon  for  collection ;  that  the  plaintiff  has  never 
in  any  way  ratified  or  approved  the  agent's  act  in  changing  said  note, 
but,  since  learning  of  the  same,  has  only  demanded,  and  now  only 
demands,  payment  of  the  note  as  originally  executed ;  that  the  agent 
believed  that  he  had  the  right  to  make  the  alteration ;  that  the  note 
was  written  on  a  printed  blank ;  and  that  in  commerce  it  is  the  con- 
stant practice,  if  the  instrument  is  to  bear  interest  from  date,  to  make 
a  change  exactly  similar  to  this  change,  and  that  there  was  nothing 
in  the  appearance  of  the  note  to  put  plaintiff  upon  inquiry. 

The  defendants  separately  demurred  to  the  complaint  for  want  of 
sufficient  facts.  The  demurrers  were  sustained,  to  which  ruling  the 
plaintiff  excepted,  and,  electing  to  abide  by  its  complaint,  final  judg- 
ment on  demurrer  was  rendered  for  the  defendants. 

The  errors  assigned  are  the  rulings  of  the  court  in  sustaining  the 
separate  demurrers  to  the  complaint.  According  to  the  allegations 
of  the  complaint,  the  note,  as  originally  executed,  provided  for  "  eight 
per  cent  interest  after  maturity  until  paid."  It  was  altered  or  changed 
by  striking  out  the  words  "  after  maturity  "  and  the  words  "  from 
date  "  inserted,  so  as  to  make  it  read,  "  with  eight  per  cent  interest 
from  date."  This  was  a  material  alteration,  and  so  changed  the  terms 
of  the  note  as  to  increase  the  obligations  of  the  makers.  .  .  .  The 
change  in  the  note  was  not  made  by  the  plaintiff's  order  or  direction, 
but  it  intrusted  certain  business  to  another  as  its  agent,  and  such 
person  made  the  alteration.  If  the  alteration  was  made  by  the  agent 
while  in  the  transaction  of  the  principal's  business,  and  in  the  scope 
of  his  authority,  then  the  act  of  the  agent  is  the  act  of  the  principal, 
—  Qui  facit  per  alinm  facit  per  se. 

The  solution  of  this  case  depends  upon  the  relation  existing  between 
Nichols  and  the  plaintiff  at  the  time  the  alteration  was  made.  If  he 
was  the  plaintiff's  agent,  and  the  act  was  within  the  scope  of  his 
authority,  then  his  act  must  be  deemed  the  act  of  the  plaintiff,  and 
the  law  is  with  the  defendants.  If  his  position  was  that  of  a  mere 
stranger  to  the  note,  then  the  law  is  with  the  plaintiff.  .  .  . 

The  appellees  insist  that  Nichols  was  the  agent  of  the  payee  in 
making  the  alteration ;  that  he  was  acting  in  the  line  of  his  agency, 
and  under  color  of  his  employment;  that  his  wrongful  act  is  imput- 
able to  his  principal.  In  support  of  this  position  appellees'  learned 
counsel  say :  "This  is  upon  the  legal  maxim,  '"WTiatever  a  man  sui  juris 
may  do  of  himself,  he  may  do  by  another,*  and,  as  a  correlative,  what- 


CHAP.    I.]       DISTINCTION   BETWEEN    AGENT   AND    SERVANT.  3 

ever  is  done  by  such  other  in  the  course  of  his  employment  is  deemed 
to  be  done  by  the  party  himself.  On  this  principle  the  liability  of  one 
person  for  the  acts  of  another  who  is  employed  in  the  capacity  of  an 
agent  is  extended  to  the  wrongful  and  tortious  acts  of  the  latter  com- 
mitted in  the  line  and  under  color  of  the  agency,  although  such  un- 
lawful acts  were  not  contemplated  by  the  employment,  and  were  done 
by  the  agent  in  good  faith,  and  by  mistake.  In  other  words,  where  a 
principal  directs  an  act  to  be  done  by  an  agent  in  a  lawful  manner, 
but  the  agent  errs  in  the  mode  of  executing  his  authority  to  the  preju- 
dice of  another  person,  the  principal  will  be  held  responsible."  This  is 
a  correct  statement  of  the  law.  The  same  principles  extend  to  the 
relations  existing  betw^een  a  master  and  his  servant.  Thus,  if  the 
engineer  of  a  railway  company  negligently  run  a  train  of  cars  over  a 
person  who  is  without  fault,  the  company  is  liable  for  the  injury 
caused.  The  same  doctrine  is  applied  to  the  wilful  acts  and  the  mis- 
takes of  agents  and  servants,  committed  by  them  while  acting  within 
the  scope  of  the  agency  or  line  of  the  employment.  May  v.  Bliss,  22 
Vt.  477;  Luttrell  v.  Hazen,  3  Sneed,  20 ;  Pennsylvania  Co.  v.  Weddle, 
100  Ind.  138;  Railroad  Co.  v.  McKee,  99  Ind.  519;  Crockett  v.  Cal- 
vert, 8  Ind.  127. 

At  the  time  Nichols  made  the  alteration  of  the  note,  was  he  the 
agent  or  servant  of  the  plaintiff  in  respect  to  his  duties  pertaining  to 
said  note  ?  It  is  averred  that  he  was  the  travelling  salesman,  but  that 
he  was  not  a  general  agent,  and  had  no  authority  to  make  settlements 
or  take  notes  on  plaintiff's  accounts,  nor  was  that  any  part  of  his 
duties ;  that,  being  about  to  go  to  Lebanon  in  the  course  of  his  duties 
as  such  travelling  salesman,  the  plaintiff  instructed  him  to  procure  for 
plaintiff  from  the  defendants  a  note  on  account  of  an  indebtedness 
due  from  them  to  the  plaintiff.  But  the  averments  of  the  complaint 
negativing  the  fact  of  agency  will  not  control  if  it  appear  from  all  the 
averments  that  the  legal  relation  of  agency  exists.  The  same  person 
may  be  a  special  agent  for  the  same  principal  in  several  different 
matters.  Nichols  was  the  agent  of  the  plaintiff  to  sell  goods.  He  was 
also  its  agent  to  procure  the  note.  We  are  here  concerned  with  the 
latter  agency  only.  Did  his  relation  as  agent  cease  when  he  obtained 
the  note,  or  did  it  continue  until  the  note  was  delivered  to  the  plain- 
tiff? If  the  agency  ceased  when  the  note  was  obtained  by  him,  what 
relation  did  he  sustain  to  the  plaintiff  in  the  interval  of  time  between 
the  delivery  to  him  and  the  delivery  to  the  plaintiff? 

This  leads  to  the  inquiry,  who  are  agents,  and  who  are  servants? 
In  the  primitive  conditions  of  society,  the  things  which  were  the 
subjects  of  sale  and  trade  were  few  in  number.  There  was  little  occa- 
sion for  any  one  to  engage  in  commercial  transactions,  and  when  it 
did  become  necessary  the  business  was  generally  transacted  by  the 
parties  thereto  in  person.  But  the  strong  and  powerful  had  many 
servants,  who  were  usually  slaves.     The  servants  performed  menial 


4  KINGAN   &    CO.   V.   SILTEBS.  [CHAP.   I. 

and  manual  services  for  the  master.  As  civilization  advanced,  the 
things  which  are  the  subjects  of  commerce  increased,  and  it  became 
necessary  to  perform  commercial  transactions  through  the  medium  of 
other  persons.  The  relation  of  principal  and  agent  is  but  an  out- 
growth or  expansion  of  the  relation  of  master  and  servant.  The  same 
rules  that  appi)'  to  the  one  generally  apply  to  the  other.  There  is  a 
marked  similarity  in  the  legal  consequences  flowing  from  the  two  rela- 
tions. It  is  often  difficult  to  distinguish  the  difference  between  an 
agent  and  a  servant.  This  difficulty  is  increased  by  the  fact  that  the 
same  individual  often  combines  in  his  own  person  the  functions  of 
both  agent  and  servant.  Agents  are  often  denominated  servants,  and 
sen'ants  are  often  called  agents.  The  word  "  servant,"  in  its  broadest 
meaning,  includes  an  agent.  There  is,  however,  in  legal  contempla- 
tion, a  difference  between  an  agent  and  a  servant.  The  Romans,  to 
whom  we  are  indebted  for  many  of  the  principles  of  agency,  in  the 
early  stages  of  their  laws  used  the  terms  mandatum  (to  put  into 
one's  hand,  or  confide  to  the  discretion  of  another)  and  negotium 
(to  transact  business,  or  to  treat  concerning  purchases)  in  describing 
this  relation.  Stor}%  Ag.  §  4.  Agency,  properly  speaking,  relates  to 
commercial  or  business  transactions,  while  service  has  reference  to 
actions  upon  or  concerning  things.  Service  deals  with  matters  of 
manual  or  mechanical  execution.  An  agent  is  the  more  direct  repre- 
sentative of  the  master,  and  clothed  with  higher  powers  and  broader 
discretion  than  a  servant.    Mechem,  Ag.  §§  1,  2. 

The  terms  "  agent "  and  "  servant "  are  so  frequently  used  inter- 
changeably in  the  adjudications  that  the  reader  is  apt  to  conclude 
they  mean  the  same  thing.  We  think,  however,  that  the  histor}^  of  the 
law  bearing  on  this  subject  shows  that  there  is  a  difference  between 
them.  Agency,  in  its  legal  sense,  always  imports  commercial  dealings 
between  two  parties  by  and  through  the  medium  of  another.  An 
agent  negotiates  or  treats  with  third  parties  in  commercial  matters 
for  another.  When  Nichols  was  engaged  in  treating  with  the  defend- 
ants concerning  the  note,  he  was  an  agent.  WTien  the  note  was  deliv- 
ered to  him,  it  was  in  law  delivered  to  the  plaintiff,  and  he  ceased  to 
treat  or  deal  with  the  defendants.  All  his  duties  concerning  the  note 
then  related  to  the  plaintiff.  It  was  his  duty  to  carry  and  deliver  it  to 
the  plaintiff.  In  doing  this  he  owed  no  duty  to  the  defendants.  He 
ceased  to  be  an  agent,  because  he  was  not  required  to  deal  further  with 
third  parties.  He  was  then  a  mere  servant  of  the  plaintiff,  charged 
with  the  duty  of  faithfully  carrying  and  delivering  the  note  to  his 
master.  When  Nichols  made  the  alteration  in  the  note  he  was  the 
servant,  and  not  the  agent,  of  the  plaintiff.  .  .  . 

Appellees'  learned  counsel  further  contend  that  if  it  be  true  that  the 
master  is  liable  for  the  wrongful  and  tortious  acts  of  his  servant,  it 
can  make  but  little  difference  whether  Nichols  was  agent  or  servant 
when  he  made  the  change.    Upon  what  principle  is  the  master  liable 


CHAP,    I.]      DISTINCTION   BETWEEN   AGENT  AND   SERVANT.  5 

for  the  wrongful  acts  of  his  servant  ?  This  inquiry  carries  us  back  to 
the  very  dawn  of  jurisprudence. 

The  principle  involved  in  this  case  is  that  of  the  master's  liability 
for  the  tort  of  his  servant.  Let  us  take  a  common  illustration :  The 
driver  of  a  grocer's  cart  negligently  runs  over  another  in  the  street, 
the  person  injured  being  without  fault.  The  grocer  is  liable  for  the 
negligence  of  his  servant,  the  driver.  But  why,  or  upon  what  prin- 
ciple? It  is  sometimes  said  that  the  reason  for  the  master's  liability 
in  such  cases  is  his  negligence  in  employing  an  unskilful  servant.  If 
this  were  really  the  true  reason,  the  logical  result  would  be  that,  if  the 
master  was  guilty  of  no  negligence  in  employing  the  servant,  he  would 
not  be  liable.  This,  however,  we  know  does  not  follow.  It  is  no 
defence  that  the  master  used  the  greatest  care  in  employing  his  ser- 
vant. Again,  suppose  an  engineer  or  servant  of  a  railroad  company 
wilfully  run  a  train  of  cars  over  another  person,  we  know  the  company 
is  liable  for  the  wrongful  act  of  its  servant,  and  that  it  is  no  excuse 
for  the  company  to  say  it  did  not  authorize  the  act,  and  that  it  was 
done  without  the  knowledge  or  consent  of  the  company,  or  against  its 
express  will  or  order. 

It  is  difficult  to  understand  this  principle  of  liability  unless  we 
approach  it  from  the  side  of  history.  It  is,  in  reality,  a  survival  of  the 
ancient  doctrine  that  the  master  or  owner  was  liable  for  the  act  of  his 
slave,  and  for  injuries  committed  by  animals  in  his  possession.  The 
ancient  idea  was  that  the  family  of  the  master,  including  his  slaves, 
his  animals,  and  all  other  property,  was  a  unity;  and  that  the  per- 
sonality of  the  master  affected  all  of  his  property;  that,  as  he  was 
entitled  to  all  the  benefits  of  ownership,  he  must  accept  the  conse- 
quences flowing  from  injuries  caused  by  his  property.  He  might  buy 
off  the  vengeance  of  the  injured  person,  or  he  might  appease  it  by  sur- 
rendering the  offending  property  to  the  person  aggrieved.  In  Koman 
law  there  was  a  class  of  actions  known  as  noxal  actions  which  pro- 
vided for  this  vicarious  liability.  The  defendant  had  the  option  of 
surrendering  the  delinquent,  instead  of  paying  damages.  In  ancient 
times  the  masses  were  slaves;  in  modem  times  the  masses  are  free- 
men. When  slaves  became  freemen,  the  master  was  shorn  of  his  power 
to  surrender  the  delinquent  servant ;  but  he  still  continues  to  be  liable 
for  the  acts  of  this  servant  done  in  the  line  of  the  employment.  This 
principle  of  liability  originates  in  slavery,  and  in  the  power  and 
dominion  that  the  master  exercised  over  the  members  of  his  family. 
But  it  may  be  said  that,  as  the  master  has  ceased  to  have  any  property 
in  his  sen'ants,  and  as  he  is  shorn  of  his  power  to  surrender  a  delin- 
quent, the  reason  for  the  rule  fails,  and  that  the  law  must  fall  with  the 
reason,  and  that  this  would  result  in  exonerating  the  master  from  all 
liability  in  all  such  cases.  It  is  true  that  the  power  of  surrendering 
the  delinquent  has  ceased,  but  it  is  not  true  that  the  personality  of  the 
master  has  ceased  to  affect  his  servants.    The  will  of  the  master  domi- 


6  KINGAX   &   CO.   V.   SILVERS.  [CHAP.   I. 

nates  any  given  enterprise.  He  calls  to  his  aid  servants  and  appli- 
ances. The  servant  surrenders  his  time,  and  in  a  measure  permits  the 
will  of  the  master  to  dominate  and  control  his  actions.  He  is  the 
instrument  of  his  master  in  accomplishing  certain  ends.  The  servant 
is  placed  in  the  position  and  given  the  opportunity  to  commit  the 
wrong  by  the  will  of  the  master.  In  a  qualified  sense,  the  servant  is 
the  representative  of  the  master.  Without  the  controlling,  dominat- 
ing influence  of  the  master's  will,  there  is  but  the  remotest  probability 
that  the  servant  would  have  been  placed  in  the  position  or  given  the 
opportunity  to  commit  the  particular  wrong.  Anciently,  the  liability 
of  the  master  was  not  limited  by  the  duties  imposed  upon  his  slave. 
When  a  servant  became  a  freeman  he  was  no  longer  a  member  of  the 
master's  family,  and  he  could  not  properly  be  said  to  be  the  represen- 
tative of  his  master,  except  in  the  line  of  the  employment.  Modem 
jurisprudence  properly  and  justly  limits  the  liability  of  the  master 
to  the  acts  of  his  servant  done  within  the  scope  of  his  employment. 
There  are  still  substantial  and  just  grounds  for  the  principle  that  the 
master  is  liable  for  the  wrongful  acts  of  his  servant.  No  liability 
arises  against  the  master  for  the  wrongful  acts  of  his  servant  unless 
the  servant  has  perpetrated  an  injury  either  upon  the  person  or  prop- 
erty of  another. 

Nichols  was  the  servant  of  the  plaintiff  when  he  made  the  alteration 
of  the  note.  But  did  he  inflict  any  injury  upon  the  property  of  the 
defendants?  Certainly  not.  The  injury,  if  any,  was  inflicted  by  the 
servant  upon  the  property  of  his  own  master,  and  not  upon  the  prop- 
erty of  the  defendants.  If  appellees'  contention  be  true,  Nichols  de- 
stroyed the  plaintiff's  note,  and  no  recovery  can  be  had  upon  it,  nor 
upon  the  original  consideration.  The  principle  that  the  master  is 
liable  for  the  tortious  acts  of  his  servant  committed  in  the  line  of  hia 
employment  has  no  application  to  the  facts  of  this  case,  for  no  injury 
was  done  the  defendants'  property. 

Even  if  it  be  conceded  that  Nichols  was  the  agent  of  the  plaintiff 
when  he  made  the  alteration,  there  is  high  authority  sustaining  the 
position  that  in  doing  so  he  exceeded  his  authority,  and  that  his  act 
would  not  be  binding  on  his  principal.  An  agent  to  transact  the  busi- 
ness of  the  principal  is  not  clothed  with  authority  to  destroy  the  prop- 
erty of  the  principal,  or  to  violate  a  rule  of  public  policy.  Nickerson 
f.  Swett,  135  Mass.  514;  Gleason  v.  Hamilton,  138  N.  Y.  353,  34 
N.  E.  283 ;  Hunt  v.  Gray,  35  N.  J.  Law,  227 ;  Yeager  v.  Musgrave, 
28  W.  Va.  90;  Bigelow  v.  Stilphen,  35  Vt.  521.  As  announcing  a 
contrary  rule,  the  appellees  cite  and  rely  upon  Hollingsworth  v.  Hol- 
brook,  80  Iowa,  151 ;  Reynolds  v.  Witte,  13  S.  C.  5 ;  Bowser  v.  Cole, 
74  Tex.  212,  11  S.  W.  1131.  These  cases  seem  to  support  appellees' 
contention.  We  think  the  first  rule  is  more  in  accordance  with  justice 
and  right. 

The  change  made  in  the  note  in  this  case  was  not  only  a  material 


CHAP.  I,]     COMBINATION  OF  FUNCTIONS  IN  SAME  REPRESENTATIVE.      7 

one,  but,  as  it  seems,  one  that  could  have  been  made  only  for  a  fraud- 
ulent purpose,  —  that  of  increasing  the  obligations  of  the  makers  and 
inuring  to  the  benefit  of  the  holder.  If  the  alteration  was  made  for  a 
fraudulent  purpose,  and  the  act  of  Nichols  be  construed  as  the  act  of 
the  plaintiff,  then  it  would  result  in  the  plaintiff  losing  its  debt  en- 
tirely, for  there  can  be  no  recovery  upon  the  note  in  either  its  original 
or  altered  state,  nor  upon  the  original  consideration,  and  the  defend- 
ants would  be  forever  released  from  paying  the  debt.  No  direct  injury 
was  done  the  defendants  by  the  alteration  of  the  note.  The  utmost  that 
can  be  said  is  that  a  rule  of  public  policy  was  violated.  The  doctrine 
of  public  policy,  like  the  Statute  of  Frauds,  should  be  invoked  to  pre- 
vent, and  not  to  perpetrate,  a  fraud.  A  clear  and  unmistakable  case 
of  the  violation  of  a  rule  of  public  policy  should  be  made  before  the 
law  will  lend  its  aid  to  depriving  one  person  of  his  property  for  the 
benefit  of  another. 

Our  conclusion  is  that  Nichols,  when  he  made  the  alteration  of  the 
note,  stood  in  the  relation  to  it  of  a  stranger,  and  that  his  act  was  a 
mere  spoliation.  In  the  consideration  of  this  case  we  have  been  mate- 
rially assisted  by  the  oral  argument  and  briefs  of  able  counsel.  Judg- 
ment reversed,  at  the  costs  of  appellees,  with  instructions  to  overrule 
the  demurrers  to  the  complaint. 

Davis,  C.  J.,  and  Gavin,  J.,  dissent. 


2.  Combination  of  Functions  of  Agent  and  Servant  in  the 
same  Representative. 

SINGEE   MANUFACTURING    CO.   v.   RAHN. 

132  U.  S.  518.     1889. 

Action  for  damages  for  personal  injury.  Verdict  and  judgment 
for  plaintiff.    Writ  of  error  by  defendant. 

The  complaint  alleged  that  the  driver  of  the  wagon  which  caused 
the  injury  was  a  servant  of  defendant  company.  Defendant  denied 
this,  and  on  the  trial  put  in  evidence  the  contract  between  itself  and 
the  driver.    The  terms  of  this  contract  appear  in  the  opinion. 

Gray,  J.  The  general  rules  that  must  govern  this  case  are  undis- 
puted, and  the  only  controversy  is  as  to  their  application  to  the  con- 
tract between  the  defendant  company  and  Corbett,  the  driver,  by 
whose  negligence  the  plaintiff  was  injured. 

A  master  is  liable  to  third  persons  injured  by  negligent  acts  done  by 
his  servant  in  the  course  of  liis  employment,  although  the  master  did 
not  authorize  or  know  of  the  servant's  act  or  neglect,  or  even  if  he  dis- 


8  SINGER   MANUFACTURING    CO.    V.    RAHN.  [CHAP.   I. 

approved  or  forbade  it.  Philadelphia  &  Reading  Eailroad  v.  Derby, 
14  How.  (U.  S.)  468,  486.  And  the  relation  of  master  and  servant 
exists  whenever  the  employer  retains  the  right  to  direct  the  manner 
in  which  the  business  shall  be  done,  as  well  as  the  result  to  be  accom- 
plished, or,  in  other  words,  "  not  only  what  shall  be  done,  but  how  it 
shall  be  done."    Eailroad  Co.  v.  Hanning,  15  Wall.  (U.  S.)  649,  656. 

The  contract  between  the  defendant  and  Corbett,  upon  the  con- 
struction and  effect  of  which  this  case  turns,  is  entitled,  "  Canvasser's 
Salary  and  Commission  Contract."  The  compensation  to  be  paid  by 
the  company  to  Corbett,  for  selling  its  machines,  consisting  of  "  a 
selling  commission  "  on  the  price  of  machines  sold  by  him,  and  "  a 
collecting  commission"  on  the  sums  collected  of  the  purchasers,  is 
uniformly  and  repeatedly  spoken  of  as  made  for  his  "  services."  The 
company  may  discharge  him  by  terminating  the  contract  at  any  time, 
whereas  he  can  terminate  it  only  upon  ten  days'  notice.  The  company 
is  to  furnish  him  with  a  wagon ;  and  the  horse  and  harness  to  be  fur- 
nished by  him  are  "  to  be  used  exclusively  in  canvassing  for  the  sale 
of  said  machines  and  the  general  prosecution  of  said  business." 

But  what  is  more  significant,  Corbett  "  agrees  to  give  his  exclusive 
time  and  best  energies  to  said  business,"  and  is  to  forfeit  all  his  com- 
missions under  the  contract,  if,  while  it  is  in  force,  he  sells  any  ma- 
chines other  than  those  furnished  to  him  by  the  company;  and  he 
"  further  agrees  to  employ  himself  under  the  direction  of  the  said 
Singer  Manufacturing  Company,  and  under  such  rules  and  instruc- 
tions as  it  or  its  manager  at  Minneapolis  shall  prescribe." 

In  short,  Corbett,  for  the  commissions  to  be  paid  him,  agrees  to  give 
his  whole  time  and  services  to  the  business  of  the  company ;  and  the 
company  reserves  to  itself  the  right  of  prescribing  and  regulating  not 
only  what  business  he  shall  do,  but  the  manner  in  which  he  shall  do 
it ;  and  might,  if  it  saw  fit,  instruct  him  what  route  to  take,  or  even 
at  what  speed  to  drive. 

The  provision  of  the  contract,  that  Corbett  shall  not  use  the  name 
of  the  company  in  any  manner  whereby  the  public  or  any  individual 
may  be  led  to  believe  that  it  is  responsible  for  his  actions,  does  not  and 
cannot  affect  its  responsibility  to  third  persons  injured  by  his  negli- 
gence in  the  course  of  his  employment. 

The  circuit  court  therefore  rightly  held  that  Corbett  was  the  defend- 
ant's servant,  for  whose  negligence  in  the  course  of  his  emplo}Tnent, 
the  defendant  was  responsible  to  the  plaintiff.  Eailroad  Co.  v.  Han- 
ning, above  cited;  Linnehan  v.  Eollins,  137  Mass.  123;  Eegina  v. 
Turner,  11  Cox  Crim.  Cas.  551.  Affirmed. 


CHAP.   I.]      CONSTRUCTION   OF   WORDS   DESCRIPTIVE  OF   SERVICE.  9 

KINGAX   &    CO.   V.    SILVEES. 

13  Ind.  App.  80.     1895. 

[Reported  herein  at  p.  1.] 

3.  Construction  of  Words  Descriptive  of  Service  in  Statutes. 

The  rights  of  employees  have  sometimes,  by  statute,  been  made  to  depend  upon  the 
character  of  the  services  they  perform,  and  the  courts  have,  by  reason  of  this  fact, 
been  forced,  in  construing  these  statutes,  to  distinguish  carefully  between  various 
words  descriptive  of  employees  performing  different  kinds  of  service. 

Thus,  in  Hand  v.  Cole,  88  Tenn.  400,  a  travelling  salesman  or  drummer  brought 
an  action  against  the  stockholders  of  the  corporation  employing  him  to  recover  hl» 
salary  under  a  statute  providing  that  "  The  stockholders  are  jointly  and  severally 
liable,  individually,  at  all  times,  for  all  moneys  due  and  owing  to  the  laborers,  ser- 
vants, clerks,  and  operatives  of  the  company,  In  case  the  corporation  becomes  insol- 
vent."   The  court,  in  holding  the  defendants  liable,  said,  in  part : 

"  We  are  to  ascertain,  as  each  case  arises,  what  employ^  is  or  is  not  within  the  lan- 
guage of  the  act.  In  arriving  at  a  satisfactory  conclusion  we  find  but  little  aid  and 
comfort  from  the  adjudged  cases  from  the  courts  of  other  States,  the  same  language  re- 
ceiving very  different  construction  at  the  hands  of  different  courts  of  equally  high  au- 
thority, as  a  citation  of  some  of  them  will  show.  The  following  persons  have  been 
held  not  to  fall  within  the  terms  '  servants  or  laborers ' :  The  secretary  of  a  manu- 
facturing company,  37  N.  Y.  640 ;  a  civil  engineer,  84  Pa.  St.  168  ;  a  consulting 
engineer,  38  Barb.  390 ;  an  assistant  engineer,  39  Mich.  47  ;  an  overseer  on  a  plan- 
tation, 84  N.  C.  340 ;  a  bookkeeper  and  general  manager,  90  N.  Y.  213.  These  cases 
seem  to  rest  upon  the  idea  that  the  terms  named  have  reference  only  to  persons  who 
perform  menial  or  manual  labor,  or,  rather,  to  persons  whose  chief  employment  is  to 
perform  such  labor,  and  not  to  embrace  the  higher  class  named  in  the  authorities 
just  cited,  although  each  of  the  persons  named  did  perform  more  or  less  of  manual 
labor  as  incident  to  their  employment. 

•'  On  the  other  hand,  a  master  mechanic  or  machinist  employed  by  the  year  was 
held  to  be  embraced  under  a  statute  protecting  '  clerks,  servants,  or  laborers,'  67 
Wis.  590. 

"  But,  without  further  naming  the  cases,  we  refer  the  curious  to  note  1,  sec.  215, 
Cook  on  Stock,  where  a  number  of  cases  are  to  be  found. 

■'  The  statute  under  consideration,  as  we  have  seen,  uses  the  words  '  laborers,  ser- 
vants, clerks,  and  operatives.'  We  do  not  deem  it  necessary  to  define  the  terms  '  la- 
borer '  or  '  operative,'  as  It  may  be  said  to  be  clear,  under  the  principles  of  construc- 
tion that  are  to  govern  us,  that  they  do  not  include  the  travelling  salesman  on  a 
salary  of  $100  per  month.  Whether  he  would  be  embraced  under  the  term  '  ser- 
vants '  It  would  be  difficult  to  say.  He  would  be,  if  we  were  at  liberty  to  accept  the 
term  in  its  broadest  sense,  as  defined  by  Mr.  Wood  in  his  work  on  Master  and  Ser- 
vant, viz.  :  '  The  word  servant,  in  our  legal  nomenclature,  has  a  broad  significance 
and  embraces  all  persons,  of  whatever  rank  or  position,  who  are  in  the  employ  and 
subject  to  the  direction  and  control  of  another  in  any  department  of  labor  or  busi- 
ness. Indeed,  it  may  in  most  cases  be  said  to  be  synonymous  with  employ^.'  That 
it  is,  however,  not  used  in  that  sense  in  the  statute  is  shown  by  the  fact  that  other 
terms  are  used  which  would  be  altogether  unnecessary  and  idle  If  It  were  meant  to 
be  synonymous  with  employ^.  We  would  have  no  room  for  the  words  '  laborers,' 
'  clerks,'  or  '  operatives.' 

"  We  are  of  opinion,  and  so  decide,  that  the  plaintiff  is  embraced  within  the  term 
'  clerk  '  as  used  in  the  statute.  Webster  defines  clerk  as,  '  An  assistant  In  a  shop  or 
store,  who  sells  goods  or  keeps  accounts.'  Bouvler  says  he  is,  '  A  person  in  the  em- 
ploy of  a  merchant,  who  attends  to  only  part  of  his  business,  while  the  merchant 
himself  superintends  the  whole :  or,  a  person  employed  in  an  office  to  keep  accounts 
or  records.'  Rapalje  says,  in  Business  Law  :  '  An  assistant,  employed  to  aid  In 
any  business,  mercantile  or  otherwise,  subject  to  the  advice  and  direction  of  his 
employer.' 

"  That  '  clerk  '  embraces  and  includes  '  salesman  '  seems  beyond  all  doubt.  If 
the  term  Includes  the  salesman  who  remains  in  the  shop  or  store,  we  can  see  no 
reason  why  it  does  not  Include  the  salesman  on  the  road,  under  like  terms  of  em- 
ployment. Each  makes  sales,  collects  accounts,  handles  goods,  and  acts  under  the 
instructions  of  the  employer." 

In  Jones  v.  Avery,  50  Mich.  326,  the  plaintiff  brought  an  action  against  a  stock- 


10         CONSTRUCTION  OP  WORDS  DESCRIPTIVE  OF   SERVICE.     [CHAP.   I. 

holder  to  recover  salary  due  him  from  the  corporation  under  a  statute  making  the 
stockholders  personally  liable  "  for  all  labor  performed  "  for  corporations.  The  court 
in  sustaining  a  judgment  for  defendant,  said,  in  part : 

"  The  plaintiff's  connection  with  the  company  and  the  nature  of  his  occupation 
were  fully  explained  by  him  as  a  witness.  He  said :  '  The  kind  of  labor  I  rendered 
to  the  said  company  was  that  of  travelling  salesman  or  agent,  selling  their  goods. 
My  duties  consisted  in  soliciting  orders  for  the  sale  of  the  company's  goods  from 
customers,  who  were  using  those  or  similar  goods  in  different  towns  through  the 
country.  I  carried  samples  with  me  always ;  I  carried  this  assortment  of  samples 
with  me  to  each  customer  or  man  I  solicited.  I  was  to  receive  a  salary  or  compen- 
sation at  the  rate  of  $1,000  per  year  ;   that  was  my  agreement.' 

"  Prom  this  It  seems  evident  to  the  court  that  he  was  not  a  labor-performer  for 
the  corporation  in  the  sense  contemplated  in  the  provisions  for  holding  stockholders 
liable.  He  had  no  part  in  carrying  on  the  establishment,  nor  in  the  manufacture. 
He  was  a  mere  outside  agent  or  representative  of  the  company  to  bring  business  to 
it,  upon  a  salary.  As  regards  the  present  question,  his  position  was  nearer  the  posi- 
tion of  an  oflScer  of  the  corporation  than  that  of  a  laborer." 

The  descriptive  words  in  the  New  York  Stock  Corporation  Law,  S  54,  are  "  la- 
borers, servants,  or  employees  other  than  contractors."  In  Brlstor  v.  Smith,  158 
N.  Y.  157,  the  court  in  holding  that  an  attorney  and  counselor-at-law,  regularly 
employed  at  a  fixed  salary,  is  not  an  employee  under  the  statute,  said : 

"  The  statute  was  a  continuation  of  previous  legislation,  which  had  for  its  object 
the  protection  of  those  who  earned  their  living  by  manual  labor,  and  not  by  pro- 
fessional services,  and  who  were  supposed  to  be  the  least  able  to  protect  themselves. 
To  such  persons,  and  to  all  who  become  employed  in  subordinate  and  humble  ca- 
pacities and  to  whom  the  hardship  would  be  great,  if  their  wages  or  salaries  were 
not  promptly  paid,  the  legislative  policy  is  to  afford  the  protection  of  a  recourse  to 
the  stockholders  of  a  company,  upon  the  latter's  default.  (Cofl5n  v.  Reynolds,  37 
N.  Y.  640 ;  Gurney  v.  Atl.  &  Gt.  W.  Railway  Co.,  58  lb.  .358  :  Wakefield  v.  Fargo,  90 
ib.  213.)  When,  In  section  54  of  the  Stock  Corporation  Law,  the  general  word  'em- 
ployees '  was  added  after  the  words  '  laborers '  and  '  servants,'  it  could  not  have 
been  intended,  from  the  collocation  of  words  and  for  the  want  of  reason  in  the  thing, 
to  include  persons  performing  services  to  the  corporation  of  a  higher  dignity,  such 
as  its  legal  adviser." 


CHAP.    II.]  AGBEEMENT   BY    CONTRACT   OR   CONDUCT.  11 


PART  I. 

FORMATION   OF   THE   RELATION   OF   PRINCIPAL 
AND   AGENT. 

CHAPTER   II. 

FOEMATION    OF    THE    RELATION    BY    AGREEMENT. 

1.  Agreement  by  Contract  or  Conduct. 

CENTRAL   TRUST    COMPANY    OF   NEW 
YORK    V.    BRIDGES. 

16  U.  S.  App.  115.     1893. 

Bill  in  Equity  for  a  receiver  and  intervening  petitions  to  deter- 
mine the  priority  of  lien  claimants  and  mortgagees.  Decree  for  lien 
claimants. 

The  lien  claimants  contracted  with  one  Eager,  who  had  taken  a 
contract  to  construct  the  railway  against  which  the  liens  were  filed. 
The  trial  court  found  that  the  lien  claimants  had  no  contract  directly 
with  the  railway ;  that  nothing  was  due  Eager  from  the  railway ;  but 
that  Eager  was  the  principal  stockholder  and  the  company  merely 
another  name  under  which  he  did  business,  and  that  therefore  the  lien 
claimants  in  contracting  with  Eager  had  contracted  with  the  railway. 

Taft,  Circuit  Judge  (after  stating  the  facts  and  the  provisions  of 
the  statute  of  Tennessee  relating  to  liens) .  Under  this  law,  the  con- 
tractor must  deal  directly  with  the  company  to  secure  a  lien  for  hia 
work  or  material,  or,  if  a  sub-contractor,  then  he  can  have  no  lien  on 
the  railroad  unless  at  the  time  that  or  after  he  serves  notice  of  his 
claims  upon  the  company,  the  company  shall  owe  money  to  his  prin- 
cipal on  the  contract  which  his  sub-contract  has  helped  to  perform; 
and  his  lien  is  limited  to  the  amount  so  due  and  owing  to  his  prin- 
cipal. In  other  words,  the  security  of  the  sub-contractor  is  the  balance 
due  the  principal  contractor  from  the  company  when  the  company 
receives  notice  of  the  sub-contractor's  claim,  and  after  notice  is  given 
the  lien  of  the  sub-contractor  is  transferred  from  the  balance  due  on 
the  contract  to  the  corpus  of  the  railroad,  pro  tanto.  But  if  there  ia 
no  balance  due  at  the  time  of  service  of  the  notice,  there  can  be  no 
lien. 

In  the  consideration  of  the  liens  adjudicated  below,  two  questions, 
therefore,  arise.    First,  did  the  lien  claimant  deal  directly  with  the 


12  CENTEAL  TRUST   CO.   OF   N.   Y.    V.   BRIDGES.        [CHAP.   11. 

company,  as  principal  contractor?  Second,  if  the  lien  claimants  were 
Bub-contractors  under  Eager  as  principal  contractor,  was  there  any 
sum  due  Eager  as  such  principal  contractor  from  the  Knoxville  South- 
em  Eailroad  Company  after  the  company  was  notified  by  the  sub- 
contractors of  their  intention  to  claim  liens  ? 

First.  The  theory  upon  which  the  master  and  the  learned  court 
below  held  that  all  the  intervening  petitioners  dealt  directly  with  the 
Knoxville  Southern  Eailroad  Company  as  principal  contractors,  was 
that  Eager  was  an  agent  of  the  railroad  company  in  making  the  con- 
tracts. One  may  be  liable  for  the  acts  of  another  as  his  agent  on  one 
of  two  grounds :  first,  because  by  his  conduct  or  statements  he  has  held 
the  other  out  as  his  agent;  or,  second,  because  he  has  actually  con- 
ferred authority  on  the  other  to  act  as  such.  The  master  reported  to 
the  court  below  that  in  no  case  did  Eager,  under  or  in  the  name  of 
the  Knoxville  Southern  Eailroad  Company,  make  any  contract  with 
any  one  doing  work  or  furnishing  material  for  the  road;  that  the 
men  who  contracted  with  Eager  knew  very  little  of  Eager,  saw  hira 
only  occasionally,  made  no  inquiry  into  the  real  relation  of  Eager  to 
the  company,  what  interest  he  had  in  it,  or  how  he  obtained  money  to 
carry  on  the  work. 

In  substance,  the  master  reported  that  the  intervening  petitioners 
believed  that  they  were  dealing  with  Eager  as  principal  contractor. 
The  proof  fully  sustains  this  conclusion.  All  the  estimates  introduced 
in  evidence  upon  which  payments  were  made  bear  the  name  of  Eager 
as  principal  contractor,  and  every  circumstance  in  the  case  rebuts  the 
idea  that  the  intervening  petitioners  either  believed  or  had  reason  to 
believe  that  they  were  doing  their  work  for,  or  furnishing  their  mate- 
rial to,  the  company  instead  of  to  Eager.  The  most  conclusive  evi- 
dence on  this  point  is  that  nearly  every  one  of  the  intervening  peti- 
tioners subsequently  brought  suit  and  recovered  judgment  on  his 
claim  in  the  state  court,  against  Eager  as  principal  contractor  and 
against  the  company  as  garnishee.  It  is  said  that  this  does  not  estop 
the  lienholders  from  showing  that  Eager  was  actually  the  agent  of  the 
company,  because  Eager  and  the  company  had  fraudulently  misled 
them  into  thinking  that  there  was  no  such  relation  of  agency  between 
him  and  the  company.  Conceding  that  no  estoppel  arises  from  the 
judgments,  they  have  great  probative  force  in  establishing  that  neither 
Eager  nor  the  company  did  anything  or  said  anything  from  which 
the  petitioners  could  infer  the  existence  of  the  agency.  Indeed,  the 
very  argument  upon  which  the  effect  of  the  judgments  as  an  estoppel 
against  the  present  contention  of  the  petitioners  that  Eager  was  the 
agent  of  the  company  is  sought  to  be  explained  away,  has  for  its 
premise  that  the  petitioners  had  no  reason  to  suppose  that  Eager  was 
anything  but  the  principal  contractor,  and  were  led  to  believe,  both 
by  him  and  the  company,  that  no  such  agency  existed. 

It  follows  necessarily  that  Eager  was  not  the  agent  of  the  com- 


CHAP.    II.]  AGREEMENT   BY    COXTRACT   OR   CONDUCT.  13 

pan}'  in  contracting  with  the  petitioners  for  the  construction  of  the 
road,  unless  the  compan)-  had  in  fact  conferred  authority  upon  him 
to  act  as  its  agent  in  the  matter.  An  agency  is  created  —  authority 
is  actually  conferred  —  very  much  as  a  contract  is  made,  i.  e.  by  an 
agreement  between  tlie  principal  and  agent  that  such  a  relation  shall 
exist.  The  minds  of  the  parties  must  meet  in  establishing  the  agency. 
The  principal  must  intend  that  the  agent  shall  act  for  him,  and  the 
agent  must  intend  to  accept  the  authority  and  act  on  it,  and  the 
intention  of  the  parties  must  find  expression  either  in  words  or  con- 
duct between  them. 

Xow,  did  the  relation  in  fact  exist?  There  certainly  was  a  con- 
tract between  Eager  as  an  individual  and  the  Knoxville  Southern 
Railroad  Company  as  a  corporation,  entered  into  before  May,  1890, 
and  probably  much  earlier,  —  certainly  before  any  of  the  construction, 
lien  claims  for  which  are  here  involved,  was  contracted  for,  —  in  which 
Eager  agreed  to  construct  the  road  at  a  price  of  $20,000  in  bonds 
and  $20,000  in  stock  per  mile,  and  other  considerations.  It  is  said 
that  this  contract  M'as  a  sham  and  a  fraud,  dated  back  nearly  three 
years  to  save  the  bondholders  of  the  Marietta  and  North  Georgia 
Railway  Companj^  and  to  cheat  the  petitioners  out  of  their  claims. 
The  fact  that  the  contract  was  signed  by  Arthur  as  vice-president 
shows  that  it  must  have  been  executed  some  months  after  its  date, 
because  the  date  is  Aug,  20,  1887,  and  Arthur  was  not  elected  vice- 
president  until  1888.  Moreover,  it  was  during  1888  that  the  president 
reported  to  the  stockholders  that  the  work  was  progressing  under  the 
North  Georgia  Construction  Company  as  contractor,  instead  of  Eager. 
But  the  contract  was  spread  on  the  minutes  of  the  company  in  May, 
1890,  so  that  it  must  have  been  executed  before  that  time.  The  evi- 
dence of  one  or  two  witnesses  points  to  its  existence  before  March  or 
April  of  that  year.  All  of  the  work  and  labor  sued  for  below  was 
contracted  for  by  Eager  after  ]\Iarch  and  substantially  after  May, 
1890.  Even  if  the  reduction  of  the  contract  to  writing  was  delayed 
imtil  1890,  this  by  no  means  shows  that  there  had  not  been  before 
that  time  a  verbal  contract,  the  terms  of  which  had  been  fully  under- 
stood between  the  parties.  All  the  circumstances  point  to  the  exist- 
ence of  such  a  contract.  Eager  was  principal  stockholder  and  presi- 
dent of  the  North  Georgia  Construction  Company,  which  was  referred 
to  on  the  company's  minutes  as  contractor  in  1888,  and  Eager  says 
that  this  company  transferred  its  contract  liabilities  and  rights  to 
him.  This  is  entirely  consistent  with  the  probabilities,  and  there  is 
nothing  in  conflict  with  it.  Now,  whether  the  contract  of  the  com- 
pany was  originally  made  with  the  North  Georgia  Construction 
Company  or  with  Eager  is  immaterial  in  this  discussion,  if  neither 
was  the  agent  of  the  company  but  was  an  independent  contractor. 
The  delay  in  the  execution  of  the  formal  contract  with  Eager  was 
doubtless  due  to  the  fact  that,  in  the  minds  of  the  individuals  whose 


14  CEXTRAL   TRUST    CO.    OF    N.    Y.    V.    BRIDGES.         [CIIAP.    11. 

duty  it  was  to  attend  to  it,  the  Marietta  and  North  Georgia  Railway 
Company  and  the  Knoxville  Southern  Railroad  Company  were  the 
same  enterprise,  and  Eager's  contract  with  the  former  was  supposed 
to  cover  his  work  on  the  latter  road,  just  as  the  bonds  and  mortgage  of 
the  former  were  evidently  supposed  to  be  in  effect  the  bonds  and 
mortgage  of  the  latter.  There  is  not,  however,  anywhere  in  the 
proof  a  single  circumstance  or  statement  that  either  the  company  or 
its  directors  intended,  or  that  Eager  intended,  his  relation  to  the 
company  in  constructing  the  road  to  be  anything  other  than  what 
he  always  said  it  was,  and  what  the  petitioners  understood  it  to  be, 
—  that  of  principal  contractor. 

The  proof  is  undisputed  that  Eager  received  the  bonds  at  the  rate 
of  $20,000  per  mile  of  completed  road  from  the  trust  company,  as 
contractor,  and  that  he  sold  them  as  contractor,  and  this  during  the 
years  from  1887  to  1890.  He  never  accounted  to  either  railroad  com- 
pany for  the  proceeds  of  the  bonds.  N'either  company  ever  demanded 
such  an  account  from  him.  He  took  them  as  his  property,  —  as  his 
compensation  under  a  contract  for  work  done.  Such  conduct,  is  not 
to  be  reconciled  with  his  being  an  agent  either  in  the  work  or  in  the 
negotiation  of  bonds. 

We  are  clearly  of  the  opinion,  therefore,  that  the  contract  of  August, 
1887,  whenever  executed,  correctly  represents  Eager's  actual  relation 
to  the  company  in  constructing  its  road.  The  contract  was  one  out 
of  which  Eager  hoped  to  make  profit  for  himself.  .  .  . 

The  reasoning  by  which  the  master,  and  presumably  the  court  be- 
low, reached  the  conclusion  that  Eager  was  the  agent  of  the  company, 
may  be  seen  from  the  following  passage  in  his  report :  — 

"  Above  it  was  said  that  the  Knox^^lle  Southern  Railroad  Company  had 
only  a  formal  existence,  because  of  Eager's  ownership  and  control  and  direc- 
tion of  all  its  affairs  and  its  officers  and  agents.  This  is  true;  but  still  in 
trying  to  discover  and  enforce  the  rights  of  the  parties  who  may  have  dealt 
with  said  company  and  with  Eager,  it  is  impossible  to  ignore  the  legal  exist- 
ence of  said  company.  Eager's  omnipotence  was  exercised  through  formal 
legal  methods,  and  his  power  was  derived  from  and  based  upon  the  large 
stock  he  held  in  the  company,  which  he  received  as  part  pay  for  the  building 
of  the  road.  But  this  interest  of  Eager  in  the  road,  and  his  control  of  the 
company  and  all  its  officers  and  agents,  made  him  its  general  agent,  —  its 
plenipotentiary ;  and  whatsoever  he  did  in  the  building  of  the  road,  whatever 
contracts  he  made,  or  were  made  by  agents  of  his,  for  material  or  work,  for 
and  upon  said  road,  must  be  regarded  as  acts  and  contracts  of  the  company 
itself,  and  binding  upon  it.  He  could  not,  by  hiding  his  true  relation  to  the 
company,  shield  the  company  from  liability  to  those  he  dealt  with;  as  soon 
as  the  facts  were  known  that  liability  might  be  asserted." 

We  are  wholly  unable  to  concur  with  the  foregoing.  Whether 
Eager  hid  his  true  relation  to  the  company  depends  on  whether  he 
was  its  contractor  or  its  agent.  He  said  he  was  its  contractor,  and 
nothing  stated  by  the  master  shows  otherwise.    The  corporation  was 


CHAP.   II,]  COMPETENCY  OF   PARTIES.  15 

a  legal  entity  different  from  Eager,  having  its  existence  under  the 
statutes  of  Tennessee,  and  governed  by  its  directors  in  accordance 
with  the  lavi^  of  its  creation.  Its  directors  made  a  contract  with  Eager. 
They  intended  that  to  be  a  binding  contract  on  the  company.  Eager 
intended  it  to  be.  The  company,  through  its  legal  and  authorized 
governors  and  agents,  therefore,  made  a  contract  with  Eager. 

There  is  no  law  which  makes  it  impossible  for  a  majority  stock- 
holder to  enter  into  a  contract  with  his  company.  Wright  v.  Kentucky 
&  Great  Eastern  Eailway  Company,  117  U.  S.  72,  95. 

As  already  explained,  the  company  may  appeal  to  a  court  of  equily 
to  set  such  contract  aside,  if  it  is  unfair  or  unconscionable,  for  fraud 
or  undue  influence,  but  until  this  is  done  the  contract  expresses  the 
true  relation  between  the  parties.  The  fact  that  a  man  has  controlling 
influence  with  another  does  not  make  him  that  other's  agent,  unless 
the  other  intends  such  relation  to  exist,  or  so  acts  as  to  lead  third 
persons  to  believe  that  it  exists.  What  is  true  between  individuals 
is  true  between  an  individual  and  a  corporation.  In  the  case  at  bar,, 
the  master  fully  admits  that  there  was  no  holding  out  of  agency  in 
Eager  by  the  company.  His  finding  that  an  agency  in  fact  existed 
rests  simply  on  the  influence  which  Eager  had  over  the  company, 
and  not  in  any  intention  of  either  that  Eager  should  act  as  its  agent 
in  the  construction  of  the  road,  and  his  conclusion  is  reached  in  the 
face  of  the  fact,  which  he  fully  admits,  that  they  both  intended  Eager 
to  be  an  independent  contractor.  The  master's  conclusion  cannot  be 
supported.^ 

(The  court  then  decides  that  on  the  second  question,  whether  any- 
thing was  owing  Eager  from  the  company,  the  case  must  go  back  for 
a  rehearing.) 

Decree  reversed. 


ALLEN   V.   BEYSOIT. 

67  Iowa,  591.     1885. 
[Keported  herein  at  p.  210.] 

2.    Competency  of  Parties. 
PHILPOT    V.    BIXGHAM. 

55  Ala.  435.     1876. 

Action  to  recover  an  undivided  half  interest  in  land.    Judgment 
for  defendant. 

•  On  this  point  of  "on«-man  companies,"  see  Broderip  v.  Salomon,  [1897]  A.  C. 
22,  reversing  [1895]  2  Ch.  323. 


16  PHILPOT   V.   BINGHAM.  [CHAP.    II. 

Plaintiff,  a  minor,  and  his  older  brother,  executed  a  power  of 
attorney  to  their  father,  authorizing  him  to  sell  and  convey  the  land 
in  controvers}'.  Under  this  power  the  land  was  conveyed  to  one 
Stringfellow,  who  conveyed  to  defendant.  Defendant  was  ignorant 
of  plaintiff's  infancy.  The  trial  court  charged  that  the  power  of 
attorney  and  the  deed  executed  under  it  were  voidable  and  not  void. 

Stone,  J.  Ever  since  the  leading  case  of  Zouch  v.  Parsons,  3 
Burr.  1794,  there  has  been  a  growing  disposition  to  treat  almost  all 
contracts  made  by  infants  as  voidable  rather  than  void.  The  prin- 
ciples of  that  decision  have  received  a  very  steady  and  cheerful  support 
on  this  side  of  the  Atlantic.  The  declared  rule  is,  that  contracts  of 
an  infant,  caused  by  his  necessities,  or  manifestly  for  his  advantage, 
are  valid  and  binding,  while  those  manifestly  to  his  hurt  are  void. 
Contracts  falling  between  these  classes  are  voidable.  Relaxation  of 
ancient  rigor  has  had  the  effect  of  placing  many  transactions,  formerly 
adjudged  void,  in  the  more  conservative  category  of  voidable.  See 
3  Washb.  Eeal  Prop.  559  et  seq.;  2  Kent's  Com.  234,  in  margin; 
1  Amer.  Leading  Cases,  5th  ed.  242  et  seq.,  in  margin ;  2  Greenl.  Ev. 
§  365  et  seq.;  Tyler  on  Infancy,  41;  Tucker  v.  Moreland,  10  Pet.  58, 
65;  Boody  v.  McKenney,  (10  Shep.)  23  Maine,  517.  This  question 
has  been  several  times  before  this  court,  and  we  have  uniformly  fol- 
lowed the  modem  rule  above  expressed.  Pant  v.  Cathcart,  8  Ala. 
725 ;  Elliott  v.  Horn,  10  Ala.  348 ;  Thomason  v.  Boyd,  13  Ala.  419 ; 
West  V.  Penny,  16  Ala.  186;  Weaver  v.  Jones,  24  Ala.  420;  Manning 
V.  Johnson,  26  Ala.  446;  Freeman  v.  Bradford,  5  Por.  270;  Slaugh- 
ter V.  Cunningham,  24  Ala.  260;  Derrick  v.  Kennedy,  4  Por.  41; 
Clark  V.  Goddard,  39  Ala.  164. 

It  is  declared  in  the  adjudged  cases,  and  in  the  elementarv'  books, 
that  a  power  of  attorney  to  sell  lands,  a  warrant  of  attorney,  or  any 
other  creation  of  an  attorney,  by  an  infant,  is  absolutely  void.  Law- 
rence V.  IVIcArter,  10  Ohio,  38,  42  ;  Pyle  v.  Cravens,  4  Littell,  17,  21 ; 
Bennett  v.  Davis,  6  Cow.  393 ;  Fonda  v.  Van  Home,  15  Wend.  636 ; 
Knox  V.  Flack,  22  Penn.  33;  Tyler  on  Infancy,  46-47;  1  Amer. 
Leading  Cases,  5th  ed.  247,  in  margin;  Saunderson  v.  Marr,  1  H. 
Bla.  76 ;  Tucker  v.  Moreland,  10  Pet.  58,  68 ;  2  Kent's  Com.,  m.  p. 
235.  So,  in  Alabama,  it  has  been  said,  "  an  infant  cannot  appoint  an 
agent."  Ware  v.  Cartledge,  24  Ala.  628.  In  Weaver  v.  Jones,  24 
Ala.  424,  C.  J.  Chilton  said,  "  The  better  opinion,  as  maintained  by 
the  modem  decisions,  is,  that  an  infant's  contracts  are  none  of  them 
{with,  perhaps,  one  exception)  absolutely  void  by  reason  of  non-age; 
that  is  to  say,  the  infant  may  ratify  them,  after  he  arrives  at  the  age 
of  legal  majority."  C.  J.  Chilton  refers  to  Parsons  on  Contracts  in 
support  of  this  proposition.  Looking  into  that  work,  *244,  it  is  clear 
that  he  means  to  except  from  the  operation  of  the  general  rule,  laid 
down  by  him,  those  contracts  of  an  infant  by  which  he  attempts  to 
create  an  attorney  or  agency. 


CHAP.   II.]  COMPETENCY  OF  PARTIES.  17 

From  such  an  array  of  authorities,  sanctioned  as  the  principle  haa 
been  by  this  court,  we  do  not  feel  at  liberty  to  depart,  although  the 
argument  in  favor  of  the  exception  is  rather  specious  than  solid. 
We  therefore  hold,  that  the  power  of  attorney,  under  which  the  plain- 
tiff's land  was  sold,  made,  as  it  appears  to  have  been,  while  he  was  an 
-infant,  was  and  is  what  the  law  denominates  void.  If  void,  then  no 
title,  even  inchoate,  passed  thereby;  and  the  defence  to  the  action 
must  rest  entirely  on  grounds  other  than  and  independent  of  the 
power  of  attorney  and  deed.  Thus  circumscribed,  the  defendant 
(appellee  here)  has  failed  to  show  any  defence  to  the  plaintiff's  claim 
to  an  undivided  half  interest  in  the  land  sued  for.  See  Boody  v. 
McKenney,  23  Maine,  517;  Haney  v.  Hobson,  53  Maine,  451; 
Cresinger  v.  Welch,  15  Ohio,  156. 

(The  court  then  decides  that  defendant  is  holding  adversely  to 
plaintiff's  interest.) 

Judgment  reversed.^ 


COUKSOLLE   V.   WEYEEHAUSEK. 
69  Minn.  328.     1897. 

Appeal  by  plaintiff  from  a  judgment  for  defendant  in  an  action 
to  determine  adverse  claims  to  land. 

Under  an  act  of  Congress  there  was  issued  to  plaintiff  in  1856 
scrip  for  320  acres  of  land.  In  1870,  when  20  years  old,  plaintiff 
sold  the  scrip  to  Dorr  and  executed  two  powers  of  attorney,  one 
authorizing  Dorr  to  locate  the  land,  and  one  authorizing  him  to  sell 
and  convey  any  land  to  which  plaintiff  might  be  entitled  by  virtue  of 
the  scrip.  Dorr,  in  the  name  of  plaintiff,  sold  and  conveyed  the  land 
in  controversy  to  Brown,  and  afterward  located  the  scrip  on  the  lands 
so  sold  and  conveyed.  The  entry  was  later  cancelled  by  the  land 
office  on  the  ground  that  plaintiff  was  not  of  age  when  he  executed 
the  power  of  attorney  under  which  the  entry  was  made.  In  1878, 
when  plaintiff  was  28,  he  executed  another  power  of  attorney  author- 
izing Brown  to  locate  the  land,  and  under  this  Brown  relocated  the 
scrip  on  the  same  land,  but,  of  course,  in  plaintiff's  name.  On  this 
entry,  patents  to  the  land  were  issued  in  plaintiff's  name  and  de- 
livered to  Brown.  Defendants  hold  under  mesne  conveyances  from 
Brown,  taken  without  knowledge  of  any  claim  in  plaintiff.  In  1895 
plaintiff  began  this  action. 

Mitchell,  J.  .  .  .  We  are  of  the  opinion  that  the  doctrine  of  rati- 

*  Accord  (In  addition  to  cases  cited  in  tlie  opinion  above)  :  Waples  v.  Hastings. 
3  Harr.  (Del.)  403:  Trueblood  v.  Truebiood,  8  Ind.  195;  Armltage  v.  Wldoe,  36 
Mich.  124  ;  Wambole  v.  Foote,  2  Dali.  1  (statutory).  The  acts  of  an  attorney-at-law 
appointed  by  an  infant  were  held  to  be  void  in  Wainwrlght  v.  Williinson,  62  Md. 
146 ;  see  also  Turner  v.  Bondalier,  31  Mo.  App.  582. 

2 


18  COURSOLLE   V.   WEYERHADSEB.  [CHAP.   II. 

fication  is  applicable.  Two  defects  in  the  Brown  title  were:  First, 
that  plaintiff  was  a  minor  when  he  executed  to  Dorr  the  power  of 
attorney  to  sell  and  convey  the  land;  and,  second,  that  the  con- 
veyance was  not  authorized  by  the  power,  because  the  land  had  not 
then  been  entered  with  the  scrip.  We  are  of  the  opinion  that  plaintiff, 
by  his  conduct,  had  fully  ratified  both  the  power  of  attorney  and  the 
deed  assumed  to  be  executed  under  it,  —  at  least,  as  to  both  these 
defects.  As  respects  the  fact  that  the  conveyance  before  the  entry  of 
the  land  was  unauthorized  by  the  power,  there  is  no  difficulty  in  hold- 
ing that  the  conveyance  was  subsequently  ratified  by  plaintiff's 
conduct. 

We  are  not  unmindful  of  the  general  rule  that  the  form  of  rati- 
fication should  be  the  same  as  required  for  the  original  appointment; 
but  until  the  amendment  of  G.  S.  1878,  c.  41,  §  12,  in  1887  (see  G. 
S.  1894,  §  4215),  the  authority  of  an  agent  to  make  a  contract  for 
the  sale  of  land  was  not  required  to  be  in  writing.  Dickerman  v. 
Ashton  21  Minn.  538;  Brown  v.  Eaton,  id.  409.  And,  where  an 
agent  authorized  to  contract  to  sell  conveys  under  a  defective  power, 
the  deed  will  be  treated  as  a  good  contract  to  sell.  Minor  v. 
Willoughby,  3  Minn.  154  (225) ;  Hersey  v.  Lambert,  50  Minn.  373, 
52  N.  W.  963.  Eatification  may  be  implied  from  the  principal's 
acts,  and  from  silence  and  nonaction  as  well  as  from  affirmative 
words  and  acts.  The  execution  of  the  power  of  attorney  in  1878  to 
relocate  the  scrip  for  the  purpose  of  protecting  Brown's  title,  after 
being  fully  advised  of  all  the  facts,  followed  by  an  entire  omission 
for  17  years  to  assert  by  word  or  act  any  claim  to  the  land,  or  to  re- 
pudiate what  had  been  done  in  his  name,  constituted  a  ratification 
on  plaintiff's  part  of  what  had  been  done,  as  far  as  those  things  were 
capable  of  ratification. 

The  rule  is  that  the  act  to  be  ratified  must  be  voidable  merely,  and 
not  absolutely  void ;  and  the  question  remains  —  which  to  our  minds 
is  the  most  important  one  in  the  case  —  whether  the  act  of  a  minor 
in  appointing  an  agent  or  attorney  is  wholly  void,  or  merely  voidable. 
Formerly  the  acts  and  contracts  of  infants  were  held  either  void,  or 
merely  voidable,  depending  on  whether  they  were  necessarily  pre- 
judicial to  their  interests,  or  were  or  might  be  beneficial  to  them. 
This  threw  upon  the  courts  the  burden  of  deciding  in  each  particu- 
lar case  whether  the  act  in  question  was  necessarily  prejudicial  to  the 
infant.  Latterly  the  courts  have  refused  to  take  this  responsibility, 
on  the  ground  that,  if  the  infant  wishes  to  determine  the  question 
for  himself  on  arriving  at  his  majority,  he  should  be  allowed  to  do 
so,  and  that  he  is  sufficiently  protected  by  his  right  of  avoidance. 
Hence  the  almost  universal  modern  doctrine  is  that  all  the  acts  and 
contracts  of  an  infant  are  merely  voidable.  Upon  this  rule  there 
seems  to  have  been  ingrafted  the  exception  that  the  act  of  an  infant 
in  appointing  an  agent  or  attorney,  and  consequently  all  acts  and 


CHAP,    II.]  COMPETENCY  OF  PARTIES.  19 

contracts  of  the  agent  or  attorney  under  such  appointment,  are  ab- 
solutely void.  This  exception  does  not  seem  to  be  founded  on  any 
sound  principle,  and  all  the  text  writers  and  courts  who  have  dis- 
cussed the  subject  have,  so  far  as  we  can  discover,  conceded  such  to 
be  the  fact. 

On  principle,  we  think  the  power  of  attorney  of  an  infant,  and 
the  acts  and  contracts  made  under  it,  should  stand  on  the  same  foot- 
ing as  any  other  act  or  contract,  and  should  be  considered  voidable 
in  the  same  manner  as  his  personal  acts  and  contracts  are  considered 
voidable.  If  the  conveyance  of  land  by  an  infant  personally,  who  is 
of  imperfect  capacity,  is  only  voidable,  as  is  the  law,  it  is  difficult  to 
see  why  his  conveyance  made  through  an  attorney  of  perfect  capac- 
ity- should  be  held  absolutely  void.  It  is  a  noticeable  fact  that 
nearly  all  the  old  cases  cited  in  support  of  this  exception  to  the 
general  rule  are  cases  of  technical  warrants  of  attorney  to  appear  in 
court  and  confess  judgment.  In  these  cases  the  courts  hold  that 
they  would  always  set  aside  the  judgment  at  the  instance  of  the 
infant,  but  we  do  not  find  that  any  of  them  go  as  far  as  to  hold  that 
the  judgment  is  good  for  no  purpose  and  at  no  time. 

The  courts  have  from  time  to  time  made  so  many  exceptions  to 
the  exception  itself  that  there  seems  to  be  very  little  left  of  it,  unless 
it  be  in  cases  of  powers  of  attorney  required  to  be  under  seal,  and 
warrants  of  attorney  to  appear  and  confess  judgment  in  court.  See 
Freeman's  note  to  Craig  v.  Van  Bebber,  18  Am.  St.  Rep.  629  (s.c, 
100  Mo.  584,  13  S.  W.  906)  ;  Schouler,  Dom.  Eel.  §  406 ;  Ewell's 
Lead.  Cas.  44,  45,  and  note;  Bishop,  Cont.  §  930;  Metcalf,  Cont. 
(2d  ed.)  48;  Whitney  v.  Dutch,  14  Mass.  457-463;  Bool  v.  Mix, 
17  Wend.  119-131. 

Hence,  notwithstanding  numerous  general  statements  in  the  books 
to  the  contrary,  we  feel  at  liberty  to  hold,  in  accordance  with  what 
we  deem  sound  principle,  that  the  power  of  attorney  from  plaintiff 
to  Dorr,  and  the  deed  to  Brown  under  that  power,  were  not  absolutely 
void  because  of  plaintiff's  infancy,  but  merely  voidable,  and  that 
they  were  ratified  by  him  after  attaining  his  majority.  .  .  . 

Judgment  afjirmed} 

Buck,  J.  dissents. 

'  An  Infant  partner  may  authorize  the  adult  partner  to  execute  a  Joint  promis- 
Bory  note  which  will  be  good  against  the  Infant  until  avoided,  and  which  the  Infant 
may  ratify.  Whitney  r.  Dutch,  14  Mass.  457.  An  Infant  payee  of  a  promissory  note 
may  authorize  an  agent  to  Indorse  and  transfer  It.  Hastings  v.  Dollarhlde,  24  Calif. 
195 ;  Hardy  v.  Waters,  38  Me.  450.  An  Infant  may  authorize  an  agent  to  rescind 
a  contract  for  him.  Towle  v.  Dresser,  73  Me.  252.  See  also  Patterson  v.  Llppin- 
cott,  47  N.  J.  L.  457,  post,  p.  535,  where  a  contract  of  purchase  by  an  Infant,  through 
an  agent,  was  held  Toldable  but  not  void. 


20  DEXTER   V.   HALL.  [CHAP.    II. 

DEXTEE   V.   HALL. 

15  Wall.   (U.  S.)  9.     1872. 

Ejectment  by  heirs  of  John  Hall  against  defendant.  John  Hall 
while  insane  executed  a  power  of  attorney  to  one  Hams  to  sell  the 
lands  in  question.  Harris  conveyed  under  the  power  to  defendant's 
grantors.  Hall  died  while  still  insane.  Verdict  and  judgment  for 
plaintiff. 

Mr.  Justice  Strong  delivered  the  opinion  of  the  court. 

The  prominent  question  in  this  case  is,  whether  a  power  of  at- 
torney executed  by  a  lunatic  is  void,  or  whether  it  is  only  voidable. 
The  Circuit  Court  instructed  the  jury  that  a  lunatic,  or  insane  per- 
son, being  of  unsound  mind,  was  incapable  of  executing  a  contract, 
deed,  power  of  attorney,  or  other  instrument  requiring  volition  and 
understanding,  and  that  a  power  of  attorney  executed  by  an  insane 
person,  or  one  of  unsound  mind,  was  absolutely  void.  To  this  in- 
struction the  defendant  below  excepted,  and  he  has  now  assigned  it 
for  error. 

Looking  at  the  subject  in  the  light  of  reason,  it  is  difficult  to  per- 
ceive how  one  incapable  of  understanding,  and  of  acting  in  the  or- 
dinary affairs  of  life,  can  make  an  instrument  the  efficacy  of  which 
consists  in  the  fact  that  it  expresses  his  intention,  or  more  properly, 
his  mental  conclusions.  The  fundamental  idea  of  a  contract  is  that 
it  requires  the  assent  of  two  minds.  But  a  lunatic,  or  a  person  non 
compos  mentis,  has  nothing  which  the  law  recognizes  as  a  mind,  and 
it  would  seem,  therefore,  upon  principle,  that  he  cannot  make  a 
contract  which  may  have  any  efficacj'^  as  such.  He  is  not  amenable 
to  the  criminal  laws,  because  he  is  incapable  of  discriminating  be- 
tween that  which  is  right  and  that  which  is  wrong.  The  govern- 
ment does  not  hold  him  responsible  for  acts  injurious  to  itself.  Why, 
then,  should  one  who  has  obtained  from  him  that  which  purports  to 
be  a  contract  be  permitted  to  hold  him  bound  by  its  provisions,  even 
until  he  may  choose  to  avoid  it?  If  this  may  be,  efficacy  is  given  to  a 
form  to  which  there  has  been  no  mental  assent.  A  contract  is  made 
without  any  agreement  of  minds.  And  as  it  plainly  requires  the 
possession  and  exercise  of  reason  quite  as  much  to  avoid  a  contract 
as  to  make  it,  the  contract  of  a  person  without  mind  has  the  same 
effect  as  it  would  have  had  he  been  in  full  possession  of  ordinary 
understanding.  While  he  continues  insane  he  cannot  avoid  it;  and 
if,  therefore,  it  is  operative  until  avoided,  the  law  affords  a  lunatic 
no  protection  against  himself.  Yet  a  lunatic,  equally  with  an  infant, 
is  confessedly  under  the  protection  of  courts  of  law  as  well  as  courts 
of  equity.     The  contracts  of  the  latter,  it  is  true,  are  generally 


CHAP.   II.]  COMPETENCY  OF   PARTIES.  21 

held  to  be  only  voidable  (his  power  of  attorney  being  an  exception). 
Unlike  a  lunatic,  he  is  not  destitute  of  reason.  He  has  a  mind,  but 
it  is  immature,  insufficient  to  justify  his  assuming  a  binding  obliga- 
tion. And  he  may  deny  or  avoid  his  contract  at  any  time,  either 
during  his  minority  or  after  he  comes  of  age.  This  is  for  him  a 
sufficient  protection.  But  as  a  lunatic  cannot  avoid  a  contract,  for 
want  of  mental  capacity,  he  has  no  protection  if  his  contract  is  only 
voidable. 

It  must  be  admitted,  however,  that  there  are  decisions  which  have 
treated  deeds  and  conveyances  of  idiots  and  lunatics  as  merely  void- 
able, and  not  void.  .  .  . 

(The  court  then  discusses  various  English  authorities  upon  the 
subject  of  lunatics'  deeds  and  conveyances.) 

In  this  country  there  has  been  inconsistency  of  decision.  Some 
courts  have  followed  Mr.  Justice  Blackstone,  and  Beverly's  Case,  4 
Eeports,  123  b,  without  noticing  the  distinction  made  in  Leach  v. 
Thompson,  Carthew,  435 ;  Yates  v.  Boen,  2  Strange,  1104,  and  other 
English  cases.  Such  are  the  decisions  cited  from  New  York,  be- 
ginning with  Jackson  v.  Gumaer,  2  Cowen,  552,  and  those  relied  upon 
made  in  other  states.  Nowhere,  however,  is  it  held  that  the  power  of 
attorney  of  a  lunatic,  or  any  deed  of  his  which  delegates  authority 
but  conveys  no  interest,  is  not  wholly  void.  And  in  Pennsylvania, 
in  the  Estate  of  Sarah  De  Silver,  5  Kawle,  111,  it  was  directly  ruled 
that  a  lunatic's  deed  of  bargain  and  sale  is  absolutely  null  and  void, 
and  the  distinction  between  his  feoffment  and  his  deed  was  recognized. 
So  also  in  Eogers  v.  Walker,  6  Penn.  St.  371,  which  was  an  ejectment 
by  a  lunatic,  it  was  held  that  a  purchaser  from  her  had  no  equity  to 
be  reimbursed  his  purchase-money,  or  the  cost  of  improvements,  and 
Chief  Justice  Gibson  said :  "  Since  the  time  of  Thompson  v.  Leach, 
Carthew,  435,  it  has  been  held  that  a  lunatic's  conveyance  executed 
by  sealing  and  delivery  only  is  absolutely  void  as  to  third  parties,  and 
why  not  void  as  to  the  grantor?  It  was  said  to  be  so  for  the  very 
unphilosophical  reason,  that  the  law  does  not  allow  him  to  stultify 
himself,  —  an  early  absurdity  of  the  common  law,  which  was  exploded 
with  us  by  Bensell  v.  Chancellor,  5  Wharton,  371." 

The  doctrine  that  a  lunatic's  power  of  attorney  is  void  finds  con- 
firmation in  the  analogy  there  is  between  the  situation  and  acts 
of  infants  and  lunatics.  Both  such  classes  of  persons  are  regarded 
as  under  the  protection  of  the  law.  But,  as  already  remarked,  a 
lunatic  needs  more  protection  than  a  minor.  The  latter  is  presumed 
to  lack  sufficient  discretion.  Eeason  is  wanting  in  degree.  With  a 
lunatic  it  is  wanting  altogether.  Yet  it  is  universally  held,  as  laid 
down  by  Lord  Mansfield,  in  Zouch  v.  Parsons,  3  Burrow,  1805,  that 
deeds  of  an  infant  which  do  not  take  effect  by  delivery  of  his  hand 
(in  which  class  he  places  a  letter  of  attorney),  are  void.  We  are  not 
aware  that  any  different  rule  exists  in  England  or  in  this  country. 


22  DREW   V.   NUNN.  [CHAP.    II. 

It  has  repeatedly  been  determined  that  a  power  of  attorney  made  by 
an  infant  is  void.  Saunderson  v.  Marr,  1  Henr}'  Blackstone,  76; 
2  Lilly,  Abridgment,  69;  1  American  Leading  Cases,  248-9.  So  it 
has  been  decided  in  Ohio,  Lawrence  v.  McArter,  10  Ohio,  37,  in  Ken- 
tucky, Pyle  V.  Cravens,  4  Littell,  17,  in  Massachusetts,  WTiitney  v. 
Dutch,  14  Mass.  462,  and  in  New  York,  Fonda  v.  Van  Home,  15 
Wendell,  636.  In  fact  we  know  no  case  of  authority  in  which  the 
letter  of  attorney  of  either  an  infant  or  a  lunatic  has  been  held 
merely  voidable. 

It  must,  therefore,  be  concluded  that  the  Circuit  Court  was  not 
in  error  in  instructing  the  jury  that  a  power  of  attorney  executed  by 
an  insane  person,  or  one  of  unsound  mind,  is  absolutely  void.  .  .  . 

Judgment  affirmed. 


DREW   V.   NIJNN. 
4Q.  B.  D.  (C.  A.)  661.     1879. 

Action  to  recover  for  goods  supplied  defendant's  wife  upon  her 
order  while  defendant  was  insane.  Verdict  and  judgment  for  plain- 
tiff.    Defendant  appeals.     The  opinion  states  the  facts. 

Brett,  L.  J.  This  appeal  has  stood  over  for  a  long  time,  prin- 
cipally on  my  account,  in  order  to  ascertain  whether  it  can  be  de- 
termined upon  some  clear  principle.  I  have  found,  however,  that 
the  law  upon  this  subject  stands  upon  a  very  unsatisfactory  footing. 

The  action  was  tried  before  Mellor,  J,,  and  was  brought  to  recover 
the  price  of  boots  and  shoes  supplied  by  the  plaintiff  to  the  defendant's 
wife  whilst  the  defendant  was  insane.  It  is  beyond  dispute  that  the 
defendant,  when  sane,  had  given  his  wife  absolute  authority  to  act 
for  him,  and  held  her  out  to  the  plaintiff  as  clothed  with  that  author- 
ity. Afterwards  the  defendant  became  insane  so  as  to  be  unable  to 
act  upon  his  own  behalf,  and  his  insanity  was  such  as  to  be  apparent 
to  any  one  with  whom  he  might  attempt  to  enter  into  a  contract. 
Whilst  he  was  in  this  state  of  mental  derangement,  his  wife  ordered 
the  goods  from  the  plaintiff,  who  had  no  notice  of  the  defendant's 
insanity,  and  was  supplied  with  them  by  him.  The  defendant  was 
for  some  time  confined  in  a  lunatic  asylum;  but  he  afterwards  re- 
covered his  reason,  and  he  has  defended  the  action  upon  the  ground 
that  by  his  insanity  the  authority  which  he  gave  to  his  wife  was  ter- 
minated, and  that  he  is  not  liable  for  the  price  of  the  goods  supplied 
pursuant  to  her  order.  Mellor,  J.,  left  no  question  to  the  jury  as  to 
the  extent  of  the  defendant's  insanity,  but  in  effect  directed  them  as 
matter  of  law  that  the  plaintiff  was  entitled  to  recover.    I  think  it 


CHAP.    II.]  COMPETENCY  OF   PARTIES.  23 

must  be  taken  that  the  defendant's  insanity  existed  to  the  extent 
which  I  have  indicated. 

Upon  this  state  of  facts,  two  questions  arise.  Does  insanity  put 
an  end  to  the  authority  of  the  agent  ?  One  would  expect  to  find  that 
this  question  had  been  long  decided  on  clear  principles ;  but  on  look- 
ing into  Story  on  Agency,  Scotch  authorities,  Pothier,  and  other 
French  authorities,  I  find  that  no  satisfactory  conclusion  has  been 
arrived  at.  If  such  insanity  as  existed  here  did  not  put  an  end  to  the 
agent's  authority,  it  would  be  clear  that  the  plaintiff  is  entitled  to 
succeed;  but  in  my  opinion  insanity  of  this  kind  does  put  an  end  to 
the  agent's  authority.  It  cannot  be  disputed  that  some  cases  of 
change  of  status  in  the  principal  put  an  end  to  the  authority  of  the 
agent :  thus,  the  bankruptcy  and  death  of  the  principal,  the  marriage 
of  a  female  principal,  all  put  an  end  to  the  authority  of  the  agent. 
It  may  be  argued  that  this  result  follows  from  the  circumstance  that  a 
different  principal  is  created.  Upon  bankruptcy,  the  trustee  becomes 
the  principal ;  upon  death,  the  heir  or  devisee  as  to  realty,  the  execu- 
tor or  administrator  as  to  personalty;  and  upon  the  marriage  of  a 
female  principal  her  husband  takes  her  place.  And  it  has  been 
argued  that  by  analogy  the  lunatic  continues  liable  until  a  fresh 
principal,  namely,  his  committee,  is  appointed.  But  I  cannot  think 
that  this  is  the  true  ground,  for  executors  are,  at  least  in  some  in- 
stances, bound  to  carry  out  the  contracts  entered  into  by  their  testa- 
tors. I  think  that  the  satisfactory  principle  to  be  adopted  is,  that 
where  such  a  change  occurs  as  to  the  principal  that  he  can  no  longer 
act  for  himself,  the  agent  whom  he  has  appointed  can  no  longer  act 
for  him.  In  the  present  case  a  great  change  had  occurred  in  the 
condition  of  the  principal :  he  was  so  far  afflicted  with  insanity  as  to 
be  disabled  from  acting  for  himself;  therefore  his  wife,  who  was  his 
agent,  could  no  longer  act  for  him.  Upon  the  ground  which  I  have 
pointed  out,  I  think  that  her  authority  was  terminated.  It  seems  to 
me  that  an  agent  is  liable  to  be  sued  by  a  third  person,  if  he  assumes 
to  act  on  his  principal's  behalf  after  he  had  knowledge  of  his  prin- 
cipal's incompetency  to  act.  In  a  case  of  that  kind  he  is  acting  wrong- 
fully. The  defendant's  wife  must  be  taken  to  have  been  aware  of 
her  husband's  lunacy;  and  if  she  had  assumed  to  act  on  his  behalf 
with  any  one  to  whom  he  himself  had  not  held  her  out  as  his  agent, 
she  would  have  been  acting  wrongfully,  and,  but  for  the  circumstance 
that  she  is  married,  would  have  been  liable  in  an  action  to  compen- 
sate the  person  with  whom  she  assumed  to  act  on  her  husband's 
behalf.  In  my  opinion,  if  a  person  who  has  not  been  held  out  as  agent 
assumes  to  act  on  behalf  of  a  lunatic,  the  contract  is  void  against  the 
supposed  principal,  and  the  pretended  agent  is  liable  to  an  action  for 
misleading  an  innocent  person. 

The  second  question  then  arises,  what  is  the  consequence  where  a 
principal,  who  has  held  out  another  as  his  agent,  subsequently  becomes 


24  DREW   V.   NUNN.  [CHAP.   II. 

insane,  and  a  third  person  deals  with  the  agent  without  notice  that 
the  principal  is  a  lunatic?  Authority  may  be  given  to  an  agent  in 
two  ways.  First,  it  may  be  given  by  some  instrument,  which  of  itself 
asserts  that  the  authority  is  thereby  created,  such  as  a  power  of  at- 
torney ;  it  is  of  itself  an  assertion  by  the  principal  that  the  agent  may 
act  for  him.  Secondly,  an  authority  may  also  be  created  from  the 
principal  holding  out  the  agent  as  entitled  to  act  generally  for  him. 
The  agency  in  the  present  case  was  created  in  the  manner  last- 
mentioned.  As  between  the  defendant  and  his  wife,  the  agency  expired 
upon  his  becoming  to  her  knowledge  insane ;  but  it  seems  to  me  that 
the  person  dealing  with  the  agent  without  knowledge  of  the  prin- 
cipal's insanity  has  a  right  to  enter  into  a  contract  with  him,  and 
the  principal,  although  a  lunatic,  is  bound  so  that  he  cannot  repu- 
diate the  contract  assumed  to  be  made  upon  his  behalf.  It  is  difficult 
to  assign  the  ground  upon  which  this  doctrine,  which,  however,  seems 
to  me  to  be  the  true  principle,  exists.  It  is  said  that  the  right  to  hold 
the  insane  principal  liable  depends  upon  contract.  I  have  a  difficulty 
in  assenting  to  this.  It  has  been  said  also  that  the  right  depends  upon 
estoppel.  I  cannot  see  that  an  estoppel  is  created.  But  it  has  been 
said  also  that  the  right  depends  upon  representations  made  by  the 
principal  and  entitling  third  persons  to  act  upon  them,  until  they 
hear  that  those  representations  are  withdrawn.  The  authorities  col- 
lected in  Story  on  Agency,  ch.  xviii.  §  481,  p.  610  (7th  ed.),  seem  to 
base  the  right  upon  the  ground  of  public  policy:  it  is  there  said  in 
effect  that  the  existence  of  the  right  goes  in  aid  of  public  business. 
It  is,  however,  a  better  way  of  stating  the  rule  to  say  that  the  holding 
out  of  another  person  as  agent  is  a  representation  upon  which,  at  the 
time  when  it  was  made,  third  parties  had  a  right  to  act,  and  if  no 
insanity  had  supervened  would  still  have  had  a  right  to  act.  In  this 
case  the  wife  was  held  out  as  agent,  and  the  plaintiff  acted  upon  the 
defendant's  representation  as  to  her  authority  without  notice  that  it 
had  been  withdrawn.  The  defendant  cannot  escape  from  the  conse- 
quences of  the  representation  which  he  has  made;  he  cannot  with- 
draw the  agent's  authority  as  to  third  persons  without  giving  them 
notice  of  the  withdrawal.  The  principal  is  bound,  although  he  re- 
tracts the  agent's  authority,  if  he  has  not  given  notice  and  the  latter 
wrongfully  enters  into  a  contract  upon  his  behalf.  The  defendant 
became  insane,  and  was  unable  to  withdraw  the  authority  which  he 
had  conferred  upon  his  wife :  he  may  be  an  innocent  sufferer  by  her 
conduct,  but  the  plaintiff,  who  dealt  with  her  bond  fide,  is  also  inno- 
cent, and  where  one  of  two  persons  both  innocent  must  suffer  by  the 
wrongful  act  of  a  third  person,  that  person  making  the  representa- 
tion which,  as  between  the  two,  was  the  original  cause  of  the  mis- 
chief, must  be  the  sufferer  and  must  bear  the  loss.  Here  it  does  not 
lie  in  the  defendant's  mouth  to  say  that  the  plaintiff  shall  be  the 
sufferer. 


CHAP.   II.]  COMPETENCY  OF  PARTIES.  25 

A  difficulty  may  arise  in  the  application  of  a  general  principle  such 
as  this  is.  Suppose  that  a  person  makes  a  representation  which  after 
his  death  is  acted  upon  by  another  in  ignorance  that  his  death  has 
happened:  in  my  view  the  estate  of  the  deceased  will  be  bound  to 
make  good  any  loss  which  may  have  occurred  through  acting  upon  that 
representation.    It  is,  however,  unnecessary  to  decide  this  point  to-day. 

Upon  the  grounds  above  stated  I  am  of  opinion  that,  although  the 
authority  of  the  defendant's  wife'  was  put  an  end  to  by  his  insanity, 
and  although  she  had  no  authority  to  deal  with  the  plaintiff,  never- 
theless the  latter  is  entitled  to  recover,  because  the  defendant,  whilst 
he  was  sane,  made  representations  to  the  plaintiff,  upon  which  he 
was  entitled  to  act  until  he  had  notice  of  the  defendant's  insanity, 
and  he  had  no  notice  of  the  insanity  until  after  he  had  supplied  the 
goods  for  the  price  of  which  he  now  sues.  The  direction  of  Mellor, 
J.,  was  right. 

Beamwell,  L.  J.,  also  read  for  affirmance. 

Brett,  L.  J.  I  am  requested  by  Cotton,  L.  J.,  to  state  that  he 
agrees  with  the  conclusion  at  which  we  have  arrived,  but  that  he  does 
not  wish  to  decide  whether  the  authority  of  the  defendant's  wife  was 
terminated,  or  whether  the  liability  of  a  contractor  lasts  until  a  com- 
mittee has  been  appointed.  He  bases  his  decision  simply  upon  the 
ground  that  the  defendant,  by  holding  out  his  wife  as  agent,  entered 
into  a  contract  with  the  plaintiff  that  she  had  authority  to  act  upon 
his  behalf,  and  that,  until  the  plaintiff  had  notice  that  this  au- 
thority was  revoked,  he  was  entitled  to  act  upon  the  defendant's 
representations. 

I  wish  to  add  that  if  there  had  been  any  real  question  as  to  the 
extent  of  the  defendant's  insanity,  it  ought  to  have  been  left  to  the 
jury ;  and  that  as  no  question  was  asked  of  the  jury,  I  must  assume 
that  the  defendant  was  insane  to  the  extent  which  I  have  mentioned. 
I  may  remark  that  from  the  mere  fact  of  mental  derangement  it  ought 
not  to  be  assumed  that  a  person  is  incompetent  to  contract;  mere 
weakness  of  mind  or  partial  derangement  is  insufficient  to  exempt  a 
person  from  responsibility  upon  the  engagements  into  which  he  has 
entered. 

Appeal  dismissed. 


MERRITT   v.    MERRITT. 

43  N.  Y.  App.  Div.  68.     1899. 

Appeal  by  the  defendant,  John  Merritt,  as  executor  of  and  trus- 
tee under  the  will  of  Hannah  B.  Merritt,  deceased,  from  a  judgment 
of  the  Supreme  Court  in  favor  of  the  plaintiffs,  entered  in  the  office 
of  the  clerk  of  the  county  of  New  York  on  the  2d  day  of  July,  1898, 


26  MERRITT   V.   MERRITT.  [CHAP.   II. 

upon  the  decision  of  the  court  rendered  after  a  trial  at  the  New  York 
Special  Term. 

This  action  was  brought  to  foreclose  a  mortgage  executed  in  the 
name  of  Hannah  B.  Merritt,  now  deceased,  b}'  George  Merritt,  her 
attorney  in  fact.  The  mortgagee,  John  Post,  assigned  the  bond  and 
mortgage  to  the  plaintiffs.  The  defence  was  that  at  the  time  of  the 
execution  of  the  mortgage  Hannah  B.  Merritt  was  non  compos  mentis 
and  that  she  received  no  consideration  therefor. 

The  nature  of  the  action  and  the  defence  are  stated  in  the  opinion 
upon  a  former  appeal.     (27  App.  Div.  208.) 

Barrett,  J.  What  we  held,  when  this  case  was  before  us  upon  the 
former  appeal  was,  as  correctly  stated  in  the  head  note,  that  "  the 
authority  of  an  agent  acting  under  a  power  of  attorney  ceases  or  is 
suspended  by  the  insanity  of  his  principal;  and  where  the  fact  of 
such  insanity  is  known,  both  to  the  agent  and  to  the  party  dealing  with 
him,  the  contract  entered  into  by  the  agent  on  behalf  of  his  principal 
is  not  binding  upon  the  latter."  This  precise  proposition  was  all 
that  the  exceptions  contained  in  the  record  then  called  upon  us  to 
decide.  A  different  question  is  presented  upon  this  appeal.  Upon 
the  second  trial,  now  under  review,  the  plaintiffs  rested,  as  they  did 
before,  upon  proof  of  the  power  of  attorney  from  Mrs.  Hannah  B. 
Merritt  to  her  son,  George  Merritt,  of  the  bond  and  mortgage  exe- 
cuted by  the  latter  as  such  attorney  to  William  Post,  and  of  the 
assignment  of  the  bond  and  mortgage  by  Post  to  the  plaintiffs.  It 
is  not  disputed  that  upon  this  proof  the  plaintiffs  were  prima  facie 
entitled  to  a  judgment  of  foreclosure  and  sale  as  prayed  for.  The 
defendant  John  Merritt,  as  executor  and  trustee  under  Mrs.  Mer- 
ritt's  will,  then  proceeded  with  his  defence.  He  gave  evidence  tend- 
ing to  show  that,  at  the  time  when  the  bond  and  mortgage  were 
executed,  Mrs.  Merritt  was  non  compos  mentis.  Before  he  had  com- 
pleted his  proofs  on  this  head,  the  learned  trial  justice  asked  his 
counsel  whether  he  intended  to  offer  evidence  showing  knowledge 
on  Mr.  Post's  part  of  Mrs.  Merritt's  insanity  at  the  time  he  took 
the  bond  and  mortgage.  The  counsel's  reply  was  in  the  negative. 
Thereupon  the  court  held  that  Mrs.  Merritt's  insanity,  standing 
alone,  was  no  defence  to  the  action,  and  that  the  defendant  was  bound 
to  prove  the  additional  fact  that  Post  knew  of  her  insanity,  or  had 
reason  to  believe  that  she  was  insane,  when  he  took  the  bond  and 
mortgage.  Acting  upon  this  view,  the  learned  justice  declined  to 
pass  upon  the  question  of  Mrs.  Merritt's  sanity,  and  at  once  gave 
judgment  for  the  plaintiffs.  In  his  decision  he  frankly  and  fairly 
states  that  "  the  defendant  did  not  complete  his  proof  as  to  the  mental 
condition  of  Hannah  B.  Merritt,  and  I  make  no  decision  as  to  what 
her  mental  condition  was  at  the  time  of  the  execution  of  the  bond  and 
mortgage  in  suit." 

We  think  that,  under  the  authorities  in  this  State,  this  was  an 


CHAP.   II.]  COMPETENCY   OF   PARTIES.  27 

inaccurate  view  of  the  burden  of  proof.  It  was  seemingly  in  accord- 
ance with  the  rule  in  England  (Campbell  v.  Hooper,  3  Smale  &  G. 
153),  where  Vice-Chaneellor  Stuart  in  a  similar  case  said  that  you 
must  show  that  the  contracting  party,  claiming  under  the  contract 
(there,  as  here,  a  mortgage),  knew  of  the  lunacy  of  the  other  party 
and  took  advantage  of  it,  before  you  can  deprive  him  of  the  right 
to  recover  under  the  contract  at  law,  and  it  would  be  very  strange 
if  a  court  of  equity  in  dealing  with  contracts  were  to  proceed  upon 
a  different  principle.  So,  in  Imperial  Loan  Co.  v.  Stone  (61  L.  J. 
[Q.  B.]  499),  it  was  held  that  the  burden  of  proving  both  the  insanity 
and  the  knowledge  of  it  by  the  other  contracting  party  lies  upon  the 
party  seeking  to  avoid  the  contract. 

In  this  State,  however,  the  rule  is  the  other  way.  Whatever  ques- 
tion there  may  be  as  to  deeds,  it  is  well  settled  that  a  mortgage  exe- 
cuted by  a  lunatic  is  voidable  only.  (Ingraham  v.  Baldwin,  9  N.  Y. 
■45.)  Being  voidable  at  the  election  of  the  lunatic's  personal  repre- 
sentatives, the  latter  may  in  the  first  instance  rest  upon  proof  of  the 
lunacy,  and  it  thereupon  becomes  incumbent  upon  the  mortgagee  or 
his  assignees  "  to  show  the  facts  necessary  in  equity  to  sustain  "  the 
instrument.  (Goodyear  v.  Adams,  24  N.  Y.  St.  Repr.  31;  affd.,  119 
N.  Y.  650 ;  Riggs  v.  American  Tract  Society,  84  id.  330 ;  Hicks  v. 
Marshall,  8  Hun,  327;  Johnston  v.  Stone,  35  id.  380,  383.)  Our 
rule  seems  to  be  the  more  reasonable  one.  It  is  quite  enough  to  put 
upon  the  lunatic's  representatives  the  burden  of  proving  the  lunacy. 
That  burden  is  by  no  means  light.  They  must  show  that  their  testa- 
tor, when  he  executed  the  instrument,  was  "  so  deprived  of  his  mental 
faculties  as  to  be  wholly,  absolutely  and  completely  unable  to  under- 
stand or  comprehend  the  nature  of  the  transaction."  (Aldrich  v. 
Bailey,  132  N.  Y.  87,  88.)  When  they  have  proved  this,  the  party 
claiming  under  the  instrument  may  well  be  called  upon  to  show  his 
good  faith  and  ignorance  of  the  insanity.  If  the  mortgagor  was 
insane  when  he  signed  the  mortgage,  the  mortgagee's  rights  under 
the  instrument  are  not  prima  facie  sustainable.  Equity,  however, 
will  sustain  them  and  enforce  the  contract  in  a  proper  case;  but  the 
least  that  can  then  be  required  of  the  mortgagee  is  that  he  point  out 
and  establish  the  grounds  upon  which  equity  should  lend  him  its  aid. 
What  are  sufficient  grounds  for  the  enforcement  of  such  contracts  in 
equity  has  been  repeatedly  pointed  out  in  the  cases.  (Mutual  Life 
Ins.  Co.  V.  Hunt,  79  N.  Y.  541 ;  Hicks  v.  Marshall,  supra;  Eiggs  v. 
American  Tract  Society,  supra;  Johnston  v.  Stone,  supra.) 


The  rule  laid  down  in  these  cases  is  not  affected  by  the  incident 
that  the  alleged  lunatic  in  the  case  at  bar  acted  through  an  agent. 
The  equities  between  the  original  parties  must  still  determine  the 
question  of  enforcement.     In  his  opinion  upon  the  former  appeal. 


28  MERRITT   V.   MERRITT.  [CHAP.    II. 

Justice  EuMSEY  thus  summed  up  the  rule  on  that  head :  "  It  must 
be  held  that  when  one  undertakes  to  deal  with  an  agent  having  a  writ- 
ten power  of  attorney,  he,  equally  with  an  agent,  knowing  of  the 
insanity  of  the  principal,  that  the  transaction  thus  made  has  no  more 
weight  than  if  the  transaction  had  been  directly  with  the  insane  prin- 
cipal himself."    We  may  add  that  it  has  no  less  weight. 

In  the  case  from  which  Justice  Rumsey  so  copiously  quotes  (Davis 
V.  Lane,  10  N".  H.  156)  Chief  Justice  Parker  also  said  that  "The 
act  of  the  agent  in  the  execution  of  the  power,  however,  may  not  in 
all  cases  be  avoided  on  account  of  the  incapacity.  If  the  principal 
has  enabled  the  agent  to  hold  himself  out  as  having  authority,  by  a 
written  letter  of  attorney,  or  by  a  previous  employment,  and  the 
incapacity  of  the  principal  is  not  known  to  those  who  deal  with  the 
agent,  within  the  scope  of  the  authority  he  appears  to  possess,  the 
transaction  may  be  held  valid,  and  binding  upon  the  principal.  Such 
case  forms  an  exception  to  the  rule,  and  the  principal  and  those 
claiming  under  him  may  be  precluded  from  setting  up  his  insan- 
ity as  a  revocation,  because  he  had  given  the  agent  power  to  hold 
himself  out  as  having  authority,  and  because  the  other  party  had 
acted  upon  the  faith  of  it,  and  in  ignorance  of  any  termination 
of  it." 

The  same  limitation  upon  the  rule  of  revocation  or  suspension 
resulting  from  the  insanity  of  the  principal  was  laid  down  in  Matt- 
hiessen  &  W.  Refining  Co.  v.  McMahon's  Adm'r.,  38  N.  J.  L.  536 ; 
Hill  V.  Day,  34  N.  J.  Eq.  150,  and  Drew  v.  Nunn,  L.  R.  [4  Q.  B. 
Div.]  661.  In  Hill  v.  Day  it  was  held  that  "  Wliere  a  principal  be- 
comes insane  after  appointing  an  agent,  the  principal's  insanity  oper- 
ates, per  se,  as  a  revocation  or  suspension  of  the  agent's  authority, 
except  .  .  .  where  a  consideration  of  value  is  given  by  a  third  party, 
trusting  to  an  apparent  authority  and  in  ignorance  of  the  principal's 
incapacity." 

In  Drew  v.  Nunn  the  defendant's  wife  had  authority  to  pledge  his 
credit  for  goods.  It  was  held  that  goods  furnished  to  her,  while  he 
was  insane,  by  a  tradesman  acting  in  ignorance  of  the  insanity,  might 
be  recovered  for.  Lord  Justice  Brett  stated  the  ground  of  the  deci- 
sion as  follows :  "  The  principal  is  bound,  although  he  retracts  the 
agenf  s  authority,  if  he  has  not  given  notice  and  the  latter  wrongfully 
enters  into  a  contract  on  his  behalf.  The  defendant  became  insane 
and  was  unable  to  withdraw  the  authority  which  he  had  conferred 
upon  his  wife:  he  may  be  an  innocent  sufferer  by  her  conduct,  but 
the  plaintiff,  who  dealt  with  her  bona  fide,  is  also  innocent;  and 
where  one  of  two  persons,  both  innocent,  must  suffer  by  the  wrongful 
act  of  a  third  person,  that  person  making  the  representation  which, 
as  between  the  two,  was  the  original  cause  of  the  mischief,  must  be 
the  sufferer  and  must  bear  the  loss." 


CHAP.   II.]  COMPETENCY   OF   PARTIES.  29 

If  the  contract  was  thus  enforcible  in  a  case  where  the  agent 
obtained  goods  from  the  tradesman  for  her  own  benefit  upon  the 
faith  of  her  apparent  authority,  a  fortiori  is  it  enforcible  where  the 
contract  is  made  directly  for  the  benefit  of  the  lunatic  to  relieve  his 
property  from  a  lien  thereon  or  to  swell  his  estate. 

We  have  thus  gone  over  the  various  features  of  this  case  more  fully, 
perhaps,  than  was  essential  to  the  decision  of  the  present  appeal.  We 
have  done  this  to  correct  any  possible  misapprehension  upon  another 
trial  of  the  scope  of  our  previous  decision.  Upon  the  first  trial  all 
the  defendant's  evidence  in  support  of  his  defence  was  excluded. 
That  evidence  apparently  embraced  notice  of  the  insanity  as  well  as 
of  the  insanity  itself.  The  precise  question,  therefore,  was  whether 
the  insanity,  plus  the  notice,  constituted  a  defence.  We  held  that  it 
did.  We  were  not  called  upon  to  decide  whether  the  insanity,  minus 
the  notice,  constituted,  prima  facie,  a  defence.  The  defendant  clearly 
had  a  right  to  prove  notice  of  the  insanity,  but  we  did  not  hold  that 
he  was  bound  to  do  so.  If  his  testimony  sufficiently  established  Mrs. 
Merritt's  insanity  within  the  definition  formulated  in  Aldrich  v. 
Bailey,  supra,  he  was,  in  our  judgment,  then  and  now  entitled  to  rest ; 
and,  if  his  testimony  on  that  head  was  not  balanced  by  testimony  sub- 
sequently adduced  by  the  plaintiffs,  he  was  entitled  to  a  finding  to 
that  effect.  If,  upon  all  the  testimony  adduced  by  both  sides,  the 
court  had  found  itself  unable  to  make  such  a  finding,  all  other 
grounds  of  equity  would  have  disappeared,  and  the  plaintiffs  would 
have  been  entitled  to  judgment.  If,  however,  the  court  had  found 
the  fact  of  insanity,  then  the  equitable  considerations  to  which 
we  have  referred  would  have  supervened  and  have  become  entitled 
to  consideration. 

The  plaintiffs  did  not  prove  —  indeed  were  not  called  upon  to 
prove  —  the  facts  upon  which  such  considerations  would  have  become 
material  for  the  reason  that  the  court,  as  we  have  seen,  gave  them 
judgment  precipitately  upon  an  erroneous  view  of  the  burden  of  proof. 

It  is  said  that  there  is  evidence  that  the  plaintiffs,  as  Mr.  Post's 
assignees,  had  notice  of  Mrs.  Merritt's  insanity.  But  the  real  ques- 
tion on  that  head  relates  to  the  transaction  with  Mr.  Post.  If  he 
was  entitled,  owing  to  the  absence  of  notice  and  the  advance  of  the 
full  sum  of  $25,000,  which,  as  is  said,  went  to  pay  off  an  existing 
mortgage  upon  Mrs.  ilerritt's  propierty,  to  enforce  the  security,  his 
assignment  to  the  plaintiffs  carried  the  same  right. 

Our  conclusion  is  that  the  defendant  should  have  been  permitted 
to  complete  his  proof  of  insanity,  with  the  right  on  the  plaintiff's 
part  thereupon  to  put  in  counterproofs  of  sanity,  and  also  to  prove 
any  facts  which  would  have  entitled  Mr.  Post  equitably  to  enforce 
the  mortgage  notwithstanding  Mrs.  Merritt's  insanity. 


30  VAIL  V.   MEYEE.  [CHAP.   II. 

The  judgment  should  be  reversed  and  a  new  trial  ordered,  with 
costs  to  the  appellant  to  abide  the  event. 

Van  Brunt,  P.  J.,  Patterson,  Ingraham,  and  McLaughlin, 
JJ.,  concurred. 

Judgment  reversed,  new  trial  ordered,  costs  to 
appellant  to  abide  event} 


VAIL   V.   MEYER. 

71  Ind.  159.     1880. 

Action  to  establish  a  lien  for  work  and  labor  upon  the  house  of 
defendant,  a  married  woman.    Judgment  for  plaintiff. 

WoRDEN,  J.  .  .  .  We  think  it  clear,  also,  that,  under  the  enlarged 
rights  of  married  women  in  reference  to  their  property,  they  may 
make  contracts  for  the  improvement  of  their  real  estate,  not  such  as 
will  bind  them  personally,  but  such  as  will  clearly  authorize  the 
mechanic,  material-man  or  builder,  to  avail  himself  of  the  law  on  the 
subject  of  liens,  and  thus  acquire  and  enforce  a  lien  upon  the  prop- 
erty. See  Capp  v.  Stewart,  38  Ind.  479 ;  Shilling  v.  Templeton,  66 
Ind.  585.  .  .  . 

There  was  evidence  tending  to  show  that  the  defendant,  Mary  A. 
Vail,  made  the  contract  in  question  through  her  husband,  as  her 
agent;  and  it  is  insisted  that  a  married  woman  cannot  appoint  an 
agent. 

It  may  be  conceded,  as  a  general  rule,  that  a  married  woman  cannot 
appoint  an  agent.  But  a  married  woman  holds  and  enjoys  her  real 
estate  as  if  she  were  sole,  and  it  becomes  essential  to  its  enjoyment 
that  she  have  the  power  to  make  improvemen1;s,  by  building  new  or 
repairing  old  buildings  upon  it.  Contracts  for  this  purpose  we  have 
already  said  she  can  make,  whereby  the  builder,  mechanic  or  material- 
man may  acquire  a  lien  under  the  law.  And  we  think  it  follows  that 
she  may  make  such  contracts  in  person  or  by  an  agent,  whom  she  may 
appoint  for  that  purpose.  So  far  as  she  is  enabled  to  contract,  she 
may  contract  in  person  or  by  agent. 

The  evidence  tends  to  sustain  the  verdict,  and  we  find  no  error  in 
the  record. 

The  judgment  below  is  affirmed,  with  costs.' 

*  On  retrial  plaintiff  prevailed  on  the  ground  that  the  defendant  did  not  show 
total  Incapacity.    32  Misc.  21,  aff'd  62  App.  Div.  617. 

*  A  married  woman  having  no  separate  estate  cannot  in  some  states  have  an 
agent.  See  Flesh  v.  Lindsay,  115  Mo.  1,  post,  p.  31,  and  cases  cited  therein;  also 
Macfarland  v.  Helm,  127  Mo.  327. 


CHAP.   II.]  COMPETENCY   OF   PARTIES.  31 


FLESH   V.   LINDSAY. 

115  Mo.  1.     1893. 

Action  against  Jane  Lindsay  and  her  husband  for  damages  caused 
to  plaintiffs'  building  by  the  negligence  of  Jane  Lindsay  in  the  repair 
of  her  adjoining  building,  whereby  a  party  wall  collapsed  and  fell. 
The  court  instructed  the  jury  that  if  they  found  that  F.  &  Co.  were 
the  agents  of  Jane  Lindsay  for  the  purpose  of  causing  alterations  in 
her  building,  then  their  act  is  her  act,  and  she  is  responsible  for  the 
alterations  and  changes,  as  if  made  without  the  intervention  of  an 
agent.    Verdict  and  judgment  for  plaintiffs  against  Jane  Lindsay. 

Burgess,  J.  ...  It  is  also  contended  by  defendant  that  a  married 
woman  can  have  no  agent  unless  she  is  possessed  of  a  separate  estate, 
and  such  seems  to  be  the  law  as  announced  in  the  case  of  "Wilcox  v. 
Todd,  64  Mo.  390;  Hall  v.  Callahan,  66  Mo.  316;  Hord  v.  Taubman, 
79  Mo.  101 ;  Henry  v.  Sneed,  99  Mo.  407.  But  may  she  not  have  a 
servant  to  repair  her  property  and  preserve  it  from  decay  and  destruc- 
tion? An  agent  is  defined  to  be  a  person  duly  authorized  to  act  on 
behalf  of  another,  or  one  whose  unauthorized  act  has  been  duly  rati- 
fied. 1  American  and  English  Encyclopedia  of  Law,  p.  333;  Evans 
on  Agency  [Ewell's  ed.]  sec.  1 ;  1  Sweet's  Law  Dictionary.  "Servant" 
is  defined  by  Mr.  Webster  as  follows :  "  One  who  serves  or  does  service 
voluntarily  or  involuntarily ;  a  person  who  is  employed  by  another  for 
menial  offices  or  for  other  labor,  and  is  subject  to  his  command;  a 
person  who  labors  or  exerts  himself  for  the  benefit  of  another,  his 
master  or  employer;  a  subordinate  helper."  We  take  it,  then,  that  the 
persons  engaged  in  or  about  the  repairing,  changing,  and  remodelling 
the  building  of  Mrs.  Lindsay  were  her  servants,  even  if  she  could  not 
have  an  agent  in  regard  to  her  fee-simple  property. 

Section  6868,  Eevised  Statutes,  1889,  supra,  provides  that  the 
annual  products  of  the  wife's  realty  may  be  attached  or  levied  upon, 
for  any  debt  or  liability  created  ...  for  the  cultivation  and  improve- 
ment of  such  real  estate.  By  this  it  is  clearly  implied  that  the  wife's 
realty  may  be  improved,  and  who  is  to  do  it  if  she  does  not  ?  The  very 
fact  that  she  is  permitted  by  law  to  hold  property  in  fee,  implies  that 
she  may  improve,  repair,  and  remodel  it  as  the  exigencies  of  the  case 
and  the  advance  of  the  times  may  require,  and  that  for  that  purpose 
she  may  employ  servants,  for  whose  carelessness  and  negligence  in  the 
manner  of  its  doing  she  and  her  husband  should  be  held  jointly  liable. 
As  was  said  in  the  case  of  Merrill  v.  St.  Louis,  83  Mo.  244,  "  The  law 
imposes  upon  every  owner  of  property  the  duty  of  so  using  it  as  not  to 
injure  the  property  or  the  persons  of  others."  Should  a  married 
woman  who  owns  property  worth  thousands  of  dollars,  and  who  may 


S3  EICHBAUM   V.   IRONS.  [CHAP.   II. 

have  an  impecunious  and  insolvent  husband,  be  permitted  to  so  use 
her  property  as  to  destroy  that  of  others,  and  there  be  no  redress  there- 
for? If  she  is  not  in  such  case  answerable  for  negligence  to  any  one 
"who  has  been  injured  by  its  improper  management,  who  is  so  answer- 
able? A  vast  amount  of  property  is  now  held  by  married  women  in 
this  State,  as  it  is  held  in  the  case  at  bar,  and  the  policy  of  the  law  is 
that  those  who  thus  own  it  beneficially  should  answer  for  the  tortious 
or  negligent  management  of  it. 

We  hold  that  both  at  common-law  and  under  the  statute  the  defend- 
ant and  her  husband  are  jointly  liable  for  the  damages  which  accrued 
to  plaintiffs  in  this  case  by  reason  of  the  carelessness  and  negligence 
of  defendant's  servants  (if  such  was  the  case)  in  remodelling  and 
changing  the  building. 

As  Mrs.  Lindsay  could  have  no  agent  in  regard  to  her  property  as 
held  by  this  court,  the  court  committed  error  in  instructing  the  jury 
that  "  If  Farrar  &  Co.,  or  Charles  Farrar,  were  the  agents  of  Jane 
Lindsay  for  the  purpose  of  causing  the  alterations  and  changes  in 
question  to  be  made,  their  act  was  her  act,  and  she  is  responsible  for 
the  alterations  and  changes  in  her  said  building  as  if  she  had  made 
the  contract  for  such  alterations  and  changes  in  person,  without  the 
intervention  of  an  agent."  .  .  . 

In  no  event  is  Mrs.  Lindsay  alone  to  be  held  liable  for  the  damages 
sued  for,  but  she  is  liable  in  conjunction  with  her  husband. 

For  the  error  of  the  court  in  giving  instructions  for  plaintiff  as 
herein  indicated,  and  in  rendering  judgment  against  Mrs.  Lindsay 
and  not  against  her  husband,  the  cause  will  be  reversed  and  remanded 
to  be  proceeded  with  in  accordance  with  the  views  herein  expressed. 

Reversed  and  remanded. 


EICHBAUM   V.   IRON'S. 

6  Watts  &  S.  (Pa.)  67.     1843. 

This  was  an  action  of  assumpsit  brought  in  the  district  court  of 
Allegheny  County  by  John  Irons  against  William  Eichbaum,  John  D. 
Davis,  William  Black,  and  William  D.  Darlington.    The  case  was  this. 

When  the  event  of  the  presidential  election  in  1840  had  been  ascer- 
tained, General  Harrison's  friends  in  Pittsburg  and  Allegheny  met  at 
the  plaintiff's  tavern,  their  late  headquarters,  to  discuss  the  propriety 
of  celebrating  their  success  by  a  public  entertainment.  It  was  resolved 
that  a  free  dinner  should  be  prepared  by  the  plaintiff  to  compensate 
him  for  the  use  of  his  house  as  a  political  rendezvous  during  the  can- 
vass, and  for  the  consequent  wear  of  his  carpets  and  furniture ;  or,  as 
a  witness  expressed  it,  to  give  him  a  benefit.    The  meeting  appointed 


CHAP.    II.]  COMPETENCY  OF   PABTIES.  33 

a  committee  of  thirteen  to  order  the  dinner  and  make  the  arrange- 
ments; and  another  committee,  of  the  same  number,  to  invite  the 
guests.  Mr.  Black  was  a  member  of  the  committee  of  arrangements ; 
and  the  other  defendants  were  members  of  the  committee  of  invita- 
tions. On  the  following  day  these  committees  met  a  concourse  of 
people  of  the  same  political  stamp  at  the  same  place ;  and  the  whole 
being  organized  as  an  original  meeting,  by  placing  Mr.  Eichbaum  in 
the  chair,  the  expediency  of  the  measure  was  warmly  contested,  among 
others,  by  Davis  and  Eichbaum,  who  spoke  and  voted  against  it,  but 
eventually  succumbed  to  the  majority,  by  whom  the  measure  was  car- 
ried anew,  and  a  committee  appointed  to  solicit  subscriptions.  At  the 
conclusion  the  plaintiff  was  called  in  and  directed  to  prepare  a  dinner 
for  one  thousand  persons,  and  serve  it  at  Taaffe's  warehouse,  where 
four  thousand  people,  of  all  political  parties,  subsequently  partook  of 
it  with  wonderful  cordiality.  Mr.  Davis,  who  was  dissatisfied  with 
the  measure,  called  on  the  plaintiff  a  few  days  after  the  dinner  was 
ordered,  stated  to  him  that  it  would  be  very  difficult  to  procure  money, 
and  requested  him  to  give  the  matter  up;  but  the  plaintiff  became 
excited,  and  declared  that  the  dinner  should  go  on  though  he  were  to 
pay  for  it  himself.  At  this  time  the  provisions  had  been  laid  in,  and 
were  in  the  hands  of  the  cook.  The  defendants  alleged  that  payments 
had  incautiously  been  made  to  the  plaintiff  without  taking  receipts; 
but,  as  they  were  unable  to  prove  them,  they  were  compelled  to  insist 
that  they  were  not  personally  liable.  The  plaintiff,  who  had  assigned 
his  claim  in  payment  of  a  debt,  and  was  examined  without  objection, 
testified  that  he  furnished  the  dinner  on  the  order  of  the  whig  party 
and  the  committee  who  employed  him ;  that  the  committee  were  the 
only  persons  he  had  to  look  to ;  that  the  meeting  at  his  house,  when 
the  order  was  given,  was  a  public  and  general  one;  and  that  he 
thought  it  was  the  committee  who  contracted  with  him.  On  these 
facts  the  court  directed  a  verdict  for  the  plaintiff. 

The  opinion  of  the  court  was  delivered  by 

Gibson,  C.  J.  This  case  is  unique,  but  readily  resolvable  on  prin- 
ciple. It  seemed,  at  first,  to  resemble  the  case  of  a  committee  sued  for 
the  price  of  meats  and  wines  furnished  on  its  order  to  a  club;  but 
though  the  defendants  acted  in  obedience  to  a  constituency,  it  was, 
unlike  the  club,  which  is  a  permanent  body,  an  intactible  and  irre- 
sponsible one.  The  plaintiff,  being  examined  without  objection,  testi- 
fied that  he  furnished  the  dinner  on  the  order  of  the  whig  party,  but 
that  it  was  to  the  committee  he  looked  for  payment.  It  is  probable 
that  neither  he  nor  they  spent  a  thought  on  the  subject ;  but  it  is  not, 
therefore,  to  be  concluded  that  he  agreed  to  give  the  dinner  for  nothing ; 
and  the  responsibilities  of  the  parties  concerned  are  to  be  determined 
on  the  ordinary  principles  of  the  law  of  contracts.  The  facts  are,  that 
the  defendants  and  others,  being  a  committee  constituted  by  a  popular 
meeting  to  order  and  manage  a  dinner,  contracted  with  the  plaintiff 

3 


34  EICHBAUM   V.   IRONS.  [CHAP.    II, 

to  furnish  it,  and  directed  the  secretary  of  the  meeting  to  report  the 
proceeding  to  the  Tippecanoe  Club,  an  affiliated  society,  for  •  its 
approbation. 

Now  it  will  not  be  pretended  that  nobody  was  responsible  to  the 
plaintiff  for  the  order ;  and,  if  the  defendants  were  not,  who  else  was  ? 
Were  they  to  be  viewed  as  the  agents  of  the  club,  we  would  have  some- 
thing palpable  to  deal  with.  The  question  would  be,  whether  they 
had  become  personally  liable  by  having  exceeded  their  authority,  or 
whether  they  had  not  contracted  on  the  credit  of  their  constituents. 
But  a  club  is  a  definite  association,  organized  for  indefinite  existence : 
not  an  ephemeral  meeting,  for  a  particular  occasion,  to  be  lost  in  the 
crowd  at  its  dissolution.  It  would  be  unreasonable  to  presume  that 
the  plaintiff  agreed  to  trust  to  a  responsibility  so  desperate,  or  furnish 
a  dinner  on  the  credit  of  a  meeting  which  had  vanished  into  nothing. 
It  was  already  defunct ;  and  we  are  not  to  imagine  that  the  plaintiff 
consented  to  look  to  a  body  which  had  lost  its  individuality  by  the 
dispersion  of  its  members  in  the  general  mass.  But  the  question  would 
not  depend  on  the  law  of  partnership,  even  were  such  a  meeting  to  be 
treated  as  a  club ;  for  though  Lord  Eldon,  in  Beaumont  v.  Meredith, 
3  Vez.  &  Beat.  180,  and  Lord  Abinger,  in  Flemyng  v.  Hector,  2  Mee- 
son  &  Welsh.  179,  seemed  to  have  thought  that  a  member  of  a  club 
is  a  partner,  the  notion  was  exploded  by  Chief  Justice  Tyndal  in  the 
last  trial  of  Todd  v.  Emly,  cited  in  Wordsworth  on  Joint  Stock  Com- 
panies, 183.  Neither  is  it  determinable  on  the  law  of  principal  and 
agent;  for  there  was  no  principal.  At  first  I  thought  the  credit 
might  have  been  given  to  the  primary  meetings  on  the  authority  of 
those  cases  in  which  officers  have  been  held  liable  to  have  contracted 
on  the  credit  of  the  government;  but  the  certainty  of  payment,  in 
those  instances,  was  so  great  as  to  make  the  moral  responsibility  of 
the  government  the  preferable  security.  Not  so  the  moral  responsi- 
bility of  a  populace,  which  is  infinitely  weakened  by  being  infinitely 
divided.  In  a  ease  like  this,  the  usual  presumption  of  credit  is  in- 
verted; and,  in  the  absence  of  evidence  to  the  contrary,  the  vendor  is 
supposed  to  have  relied  on  the  responsibility  of  the  persons  who  gave 
the  order.  What  we  have  to  do,  then,  is  to  determine  how  far  each  of 
the  defendants  was  a  party  to  it. 

When  several  dine  together  at  a  tavern,  each  is  liable  for  the  reck- 
oning. (Collyer  on  Partn.  25,  note  w.)  But,  as  I  take  it,  they  are 
liable  jointly  and  not  severally;  for  though  only  one  should  order, 
those  who  approve  of  it  become  parties,  except  where  credit  is  given 
to  one,  in  exclusion  to  those  who  happen  to  be  his  guests.  This  prin- 
ciple is  deducible  from  Delauney  v.  Strickland,  4  Stark.  E.  366.  Did 
the  defendants,  then,  all  concur  in  the  order  given  for  the  dinner  in 
question  ?    If  they  did  not,  the  plaintiff  cannot  recover. 

It  is  not  disputed  that  they  were  present  when  the  measure  was 
definitely  adopted ;  but  it  is  proved  that  Davis  and  Eichbaum  opposed 


CHAP.   II.]  COMPETENCY  OF   PARTIES.  35 

it  while  it  was  under  consideration.  What  then?  They  at  last  sub- 
mitted to  the  majority,  and  made  the  resolution  their  own.  In 
Braithwaite  v.  Skofield,  9  B.  &  C.  401,  a  member  of  a  committee  who 
was  present  at  the  adoption  of  a  resolution  to  have  certain  work  done 
was  held  liable  to  the  tradesmen.  Every  member  present  assents  be- 
forehand to  whatever  the  majority  may  do,  and  becomes  a  party  to 
acts  done,  it  may  be,  directly  against  his  will.  If  he  would  escape 
responsibility  for  them,  he  ought  to  protest  and  throw  up  his  member- 
ship on  the  spot;  and  there  was  no  evidence  that  any  of  the  defend- 
ants did  so.  On  the  contrary,  they  all  remained  till  the  meeting  was 
dissolved  and  the  order  given.  It  is  true  that  Mr.  Davis  afterwards 
desired  the  plaintiff  to  give  the  matter  up;  but  the  dinner  was  in 
preparation,  and  it  was  too  late  to  retract.  Of  what  importance,  then, 
is  the  disputed  fact  of  his  having  partook  of  the  repast  with  the  rest  ? 
Had  he  done  so,  his  final  accession  would,  according  to  Delauney  v. 
Strickland,  have  made  him  liable  despite  of  other  considerations ;  but 
he  liad  become  irrevocably  liable  by  the  order  of  the  committee,  given 
in  his  presence,  and  apparently  with  his  approbation.  The  defend- 
ants have  not  pleaded  the  non-joinder  of  the  other  members  in  abate- 
ment; and  the  evidence  showed  such  a  joint  liability  of  those  who 
have  been  sued  as  warranted  the  direction. 

Judgment  affirmed.^ 


McCABE   V.    GOODFELLOW. 

133  N.  Y.  89.     1892. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme  Court 
in  the  fourth  judicial  department,  entered  upon  an  order  made  July  7, 
1891,  which  aflSrmed  a  judgment  in  favor  of  plaintiff  entered  upon 
the  report  of  a  referee. 

This  action  was  brought  to  recover  for  services  alleged  to  have  been 

»  Accord  :  ITeath  v.  GosUn,  80  Mo.  310.  In  Slzer  v.  Daniels,  66  Barb.  (N.  Y.)  426. 
the  members  of  a  county  political  committee  were  sued  by  an  agent  employed  to 
organize  the  party  In  the  county.  The  court  said,  In  part  (page  432)  :  "  The  plain- 
tiff's contract  is  in  terms  with  the  county  committee,  but  only  such  of  the  members 
as  voted  for  the  resolutions  under  which  the  plaintiff  was  employed  are  liable ;  unless 
those  not  voting  had  authorized  the  others  to  pass  the  resolutions,  and  agreed  to  be 
bound  thereby.  A  part  of  the  members  of  a  voluntary  organization  cannot  bind  the 
others  without  their  consent  before  the  act  which  it  is  claimed  binds  them  Is  done, 
or  they,  with  full  knowledge  of  the  facts,  ratify  and  adopt  It.  There  are  cases,  doubt- 
less. In  which  the  act  done  Is  so  clearly  in  furtherance  of  the  objects  for  which  the 
association  was  organized  that  all  will  be  presumptively  bound  by  it.  When  such  Is 
not  the  case,  consent  or  ratification  must  be  proved.  The  termination  of  the  term 
of  office  of  the  committee  will  not  relieve  them  from  liability.  Those  who  made  the 
contract  were  bound  to  see  It  performed.  The  committee  that  was  appointed  to  suc- 
ceed the  defendants  never  assumed  any  obligation  to  pay  the  plaintiff  for  hip  services, 
and  they  were  not  the  successors  of  the  defendants  In  that  sense  that  rendered  them 
liable  on  the  contracts  of  their  predecessors.  Flemyng  v.  Hector,  2  Mees.  &  Welsh, 
172.    Reynell  v.  Lewis,  15  id.  519." 


36  MCCABE   V.   GOODFELLOW.  [CHAP.   II. 

rendered  by  plaintiff,  as  attorney  for  the  Law  and  Order  League  of  the 
town  of  Kirkland,  of  which  defendant  was  treasurer. 

Maynard,  J.  This  action  must  be  upheld,  if  at  all,  under  section 
1919  of  the  Code  of  Civil  Procedure,  which  provides  that  an  action 
may  be  maintained  against  the  president  or  treasurer  of  an  unincor- 
porated association  consisting  of  seven  or  more  persons,  upon  any 
cause  of  action  for  which  the  plaintiff  might  maintain  such  an  action 
against  all  the  associates  by  reason  of  their  liability  therefor,  either 
jointly  or  severally.  Under  the  subsequent  sections  of  the  Code  (1921, 
1922),  the  judgment  recovered  does  not  bind  the  property  of  the 
officer,  and  the  execution  issued  must  require  the  sheriff  to  satisfy  it 
out  of  any  personal  property  belonging  to  the  association  or  owned 
jointly  or  in  common  by  all  the  members  thereof,  but  must  omit  any 
direction  respecting  real  property. 

Where  such  an  action  has  been  brought,  another  action  for  the  same 
cause  shall  not  be  brought  against  the  members  of  the  association  until 
the  return  unsatisfied,  wholly  or  in  part,  of  an  execution  upon  a  judg- 
ment against  the  officer.  The  plaintiff,  however,  is  not  bound  to  sue 
the  officer,  for  section  1983  provides  that  he  may,  in  the  first  instance, 
bring  his  action  against  all  the  members  of  the  association.  It  will 
thus  be  seen  that  the  right  to  maintain  the  action  against  the  officer  is 
conferred  upon  the  plaintiff  for  his  convenience  and  in  order  that  he 
may  more  speedily  reach  the  personal  property  of  the  association  for 
the  satisfaction  of  any  judgment  which  he  may  recover.  But  the 
plaintiff  cannot,  in  any  case,  maintain  such  an  action  against  the 
officer,  unless  the  debt,  which  he  seeks  to  recover,  is  one  upon  which 
he  could  maintain  an  action  against  all  the  associates  by  reason  of 
their  liability  therefor,  either  jointly  or  severally.  This,  therefore, 
is  the  test  to  be  applied  to  the  present  case.  The  plaintiff  must  allege 
and  prove,  and  the  court  must  find  that  all  the  members  of  the  asso- 
ciation were  liable,  either  jointly  or  severally,  to  pay  the  plaintiff  the 
amount  of  his  claim,  or  the  judgment  in  this  action  cannot  stand. 

The  defendant  was  the  treasurer  of  a  Law  and  Order  League,  an' 
association  organized  in  and  for  the  town  of  Kirkland,  Oneida  County, 
in  December,  1886.  It  eventually  consisted  of  two  hundred  and  sev- 
enty members,  of  whom  the  plaintiff  was  one.  It  was  formed  pursu- 
ant to  a  resolution  adopted  at  a  public  meeting  of  citizens,  which  de- 
clared that  they  voluntarily  associated  themselves  together  for  the 
purpose  of  forming  such  a  league,  the  object  of  which  should  be  to 
give  their  personal  and  united  influence,  and,  if  need  be,  their  material 
aid  to  assist  the  town  and  village  officers  in  enforcing  the  excise  and 
corporate  laws.  A  constitution  was  at  the  same  time  adopted,  to  which 
each  member  subscribed  his  name,  which  stated  that  the  object  of 
the  league  should  be  to  unite,  as  far  as  possible,  all  the  orderly  and 
law-abiding  citizens  of  the  town  in  giving  moral  support  and  aid  in 
all  proper  ways  to  the  village  and  town  officers  while  in  the  discharge 


CHAP.   II.]  COMPETENCY  OF   PARTIES.  37 

of  their  official  duties,  and  to  see  that  they  were  faithful  in  enforcing 
all  village  and  town  laws,  and  especially  those  intended  to  regulate  the 
traffic  in  intoxicating  drinks;  and  that  the  members  of  the  league 
should  consist,  first,  of  all  the  members  of  the  special  or  central  com- 
mittee composed  of  three  persons  appointed  by  each  church  and  tem- 
perance society  in  the  town,  and  three  members  appointed  by  the 
league  itself,  and,  second,  all  other  persons  willing  to  pledge  them- 
selves individually  by  signing  the  constitution,  that  they  will  give 
personal  or  material  aid  when  needed  to  make  effective  the  object  of 
the  league. 

A  president,  two  vice-presidents,  and  a  secretary  were  provided  for, 
whose  duties  were  defined  to  be  the  same  as  of  those  chosen  in  similar 
associations,  and  they  were  to  constitute  the  executive  committee  of 
the  special  or  central  committee  and  also  of  the  league.  Kegular 
meetings  of  the  executive  and  special  committees  were  to  be  held  on 
the  third  Tuesday  evening  of  each  month,  for  the  purpose  of  hearing 
reports  and  adopting  such  measures  as  their  united  counsel  and  wis- 
dom might  decide  upon  as  necessary  to  carry  out  the  letter  and  spirit 
of  the  league. 

The  method  of  raising  funds  for  the  prosecution  of  their  work  seems 
to  have  been  in  part  by  collections  at  meetings,  but  mainly  by  sub- 
scriptions to  what  was  known  as  the  guarantee  fund,  by  which  each 
subscriber  pledged  himself  to  pay  a  specific  sum  in  such  instalments 
as  might  be  needed  to  carry  out  the  work  of  the  enforcement  of  the 
excise  laws.  The  plaintiff  was  one  of  the  subscribers  to  this  fund, 
which  amounted  to  over  $1200.  Whether  all  of  the  subscribers  were 
members  of  the  league  does  not  appear. 

The  plaintiff,  who  is  an  attorney,  sues  for  services  rendered,  as  he 
alleges,  in  the  prosecution  of  actions  for  penalties  and  in  other  legal 
proceedings  brought  and  instituted  by  the  association  and  under  an 
employment  by  them.  The  referee  has  found  that  the  league,  through 
its  officers,  duly  authorized  agents  and  committees,  retained  him  to 
perform  these  services  and  to  bring  these  actions,  and  that  his  services 
were  of  the  value  of  $1850,  including  necessary  disbursements;  that 
he  has  received  on  account  thereof  $175,  leaving  $1680  due  and  pay- 
able, for  which  Judgment  is  ordered. 

So  far  as  this  is  to  be  considered  as  a  finding  that  the  individual 
members  of  the  league  became  bound  under  any  agreement,  express  or 
implied,  to  pay  plaintiff  for  his  services,  we  think  it  is  a  finding  not 
supported  by  the  evidence.  We  fail  to  discover  anything  in  the  organi- 
zation of  this  association,  or  in  its  constitution,  or  professed  objects, 
or  in  the  methods  which  it  adopted  for  the  conduct  of  its  affairs,  which 
indicates  an  intention  on  the  part  of  these  members  to  become  per- 
sonally bound  for  any  debts  contracted  by  its  officers  and  committees 
beyond  what  might  be  necessary  for  the  maintenance  of  its  existence. 
The  scheme  of  its  operations  seems  to  have  contemplated  the  raising 


38  MoCABE  V.   GOODFELLOW.  -  [CHAP.   II. 

of  money  by  collections  and  voluntary  subscriptions  to  be  placed  at 
the  disposal  of  its  committees  for  the  purpose  of  defraying  any  proper 
expenses  which  they  might  incur,  and  no  authority  was  given  to  any 
officer,  agent,  or  committee  of  the  association,  to  pledge  without  limit 
the  personal  credit  of  its  members. 

The  transitory  character  of  the  organization  also  renders  it  improb- 
able that  the  people  who  joined  it  ever  intended  to  authorize  the  trans- 
action of  business  upon  their  individual  credit. 

It  was  one  of  those  spasmodic  moral  movements  which  have  their 
origin  because  of  the  laxity  of  the  administration  of  the  police  regu- 
lations of  the  communitj',  and  which  inevitably  subside  when  the  exi- 
gency for  their  creation  has  ceased,  or  when  the  zeal  of  their  members 
has  spent  its  force.  The  plaintiff  belonged  to  the  order,  subscribed  to 
its  funds,  and  must  be  charged  with  full  knowledge  of  its  scope  and 
powers.  It  was  not  in  any  sense  a  partnership.  In  Lindley  on  Part- 
nerships, 2d  Am.  ed.  p.  50,  it  is  said :  "  It  is  a  mere  misuse  of  words 
to  call  such  associations  partnerships;  and  if  liabilities  are  to  be 
fastened  on  any  of  their  members  it  must  be  by  reason  of  the  acts  of 
those  members  themselves,  or  by  reason  of  the  acts  of  their  agents, 
and  the  agency  must  be  made  out  by  the  person  who  relies  on  it,  for 
none  is  implied  by  the  mere  fact  of  association." 

In  this  respect  there  is  a  plain  distinction  between  associations 
formed  for  the  purpose  of  pecuniary  profit  and  those  formed  for 
other  objects. 

In  Natl.  Bank  v.  Van  Derwerker,  74  N.  Y.  234,  the  association  be- 
longed to  the  former  class,  and  was  engaged  in  a  commercial  enter- 
prise, and  it  was  shown  that  the  officer  contracting  the  debt  had  au- 
thority to  bind  its  members.  Such  associations  have,  in  fact,  all  the 
powers  and  incidents  of  a  partnership,  and  their  transactions  are 
governed  by  the  law  relating  to  such  adventures ;  ^  but  associations 
formed  for  moral,  benevolent,  social,  or  political  purposes,  rest  upon 
a  different  basis.  The  individual  liability  of  the  members  for  con- 
tracts made  by  the  association  or  its  officers  or  committees  depend 
upon  the  application  of  the  principles  of  the  law  of  agency,  and 
authority  to  create  such  liability  will  not  be  presumed  or  implied  from 
the  existence  of  a  general  power  to  attend  to  or  transact  the  business, 
or  promote  the  objects  for  which  the  association  was  formed,  except 
where  the  debt  contracted  is  necessary  for  its  preservation. 

In  Flemyng  v.  Hector,  2  M.  &  W.  172,  the  committee  had  authority 

^  In  Davison  v.  Holden,  55  Conn.  103,  the  defendants  with  sundry  others  asso- 
ciated themselves,  without  Incorporation,  under  the  name  of  the  Bridgeport  Co- 
operative Association,  for  the  purpose  of  procuring  provisions  at  a  lower  rate  for 
the  members.  Sales  were  made  to  non-members  at  a  higher  rate,  but  no  profits  were 
expected  beyond  the  payment  of  the  expenses  of  manauement.  The  members  held 
meetings  and  elected  oflBcers.  and  the  oflScers  employed  the  defendants  as  managers 
to  conduct  the  business.  The  defendants  as  such  managers  bought  and  sold  goods, 
paying  the  receipts  to  the  treasurer.  Held  that  the  individuals  composing  the  asso- 
ciation were  liable  for  goods  purchased  by  the  managers  for  the  benefit  of  the  associ- 
ation.    See,  also,  Bennett  v.  Lathrop,  71  Conn.  613. 


CHAP.   II.]  COMPETENCY   OF   PARTIES.  39 

to  "  manage  the  affairs  of  the  club,"  and  it  was  held  that  the  members 
were  not  individually  liable  for  debts  incurred  by  a  committee  for 
work  done  or  goods  furnished,  as  the  committee  had  no  authority  to 
pledge  the  personal  credit  of  its  members. 

In  Todd  V.  Emly,  7  M.  &  W.  427,  a  fund  was  subscribed  to  be  ad- 
ministered by  a  committee,  and  it  was  held  that  the  authority  of  the 
committee  was  confined  to  the  administration  of  the  fund,  and  that 
they  were  not  empowered  to  deal  upon  credit  except  for  such  articles 
as  it  might  be  immediately  necessary  for  them  to  have  purchased  on 
credit.  So  it  has  been  held  that  the  general  regulation  of  a  club  vest- 
ing the  conduct  of  aH  its  concerns  in  a  committee  does  not  authorize 
the  committee  to  raise  money  by  debentures,  or  otherwise  to  pledge  the 
credit  of  its  members.  In  re  St.  James  Club,  2  DeG.,  M.  &  G.  383. 
Other  English  cases  to  the  same  effect  are  Caldicott  v.  Griflfiths,  8 
Exeh.  898 ;  Wood  v.  Finch,  2  F.  &  F.  447 ;  Bailey  v.  Macaulay,  19 
L.  J.  (Q.  B.)  73.  These  decisions  have  been  followed  by  the  Ameri- 
can cases.  Ash  v.  Guie,  97  Pa.  St.  493;  Ferris  v.  Thaw,  5  Mo.  App. 
279;  Eichmond  v.  Judy,  6  id.  465;  Devoss  v.  Gray,  22  Ohio  St.  159. 

Granting  that  the  members  of  the  league  had  knowledge  of  the 
plaintiff's  employment  by  their  president,  or  by  the  general  or  exec- 
utive committee,  and  of  the  rendition  of  these  services,  and  ratified 
and  approved  of  his  retainer,  it  does  not  follow  that  they  became  per- 
sonally obligated  to  pay  them. 

The  record,  we  think,  very  clearly  shows  that  they  had  no  reason 
to  suppose  that  the  committee  so  employed  the  plaintiff  upon  their 
individual  credit.  On  the  contrary,  it  fairly  appears  that  they  ex- 
pected that  his  compensation,  as  well  as  the  other  expenses  incurred 
by  the  officers  and  committees,  were  to  be  met  by  the  funds  voluntarily- 
contributed  for  that  purpose  and  placed  at  the  disposal  of  the  com- 
mittees, and  that  they  did  not  intend  there  should  be  any  debts  con- 
tracted in  excess  of  those  funds. 

The  plaintiff,  as  a  member  of  the  organization,  must  have  so  under- 
stood it.  His  conversations  with  the  president  and  the  letters  put  in 
evidence  upon  the  subject,  all  refer  to  the  moneys  subscribed  or  con- 
tributed, as  affording  the  means  out  of  which  he  was  to  be  paid.  Hav- 
ing, therefore,  failed  to  establish  the  liability  of  his  associates  for  the 
debt,  upon  which  he  brought  his  suit,  the  plaintiff  was  not  entitled  to 
recover. 

The  order  and  judgment  appealed  from  should  be  reversed  and  a 
new  trial  granted,  with  costs  to  abide  the  event. 

All  concur.  '  Judgment  reversed.^ 

'  Accord  :  Stlkeman  v.  Flack.  175  N.  Y.  512,  reversing  Judgment  for  plaintiff  and 
granting  a  new  trial  on  the  dissenting  opinion  In  58  App.  DIt.  277. 


40  CHASTAIN   V.   ZACH.  [CHAP.   II. 

TALBOT   V.   BOWEN. 

1  A.  K.  Marsh.  (Ky.)  436.     1819. 

Judge  Owsley  delivered  the  opinion  of  the  court. 

This  suit  was  brought  in  chancery  by  Bowen,  to  obtain  a  title  to 
a  moiety  of  a  lot  of  ground  in  the  town  of  Henderson,  the  equity 
whereof  is  asserted  by  him  through  a  certain  William  Featherston, 
who,  it  is  alleged,  purchased  it  from  the  son  and  agent  of  Talbot. 

The  purchase  of  Featherston  is  admitted  by  the  answer  of  Talbot, 
but  the  authority  of  his  son  to  sell  the  land  is  denied ;  and  if  author- 
ized, it  is  contended  that,  owing  to  his  son's  infancy  and  the  inade- 
quacy of  the  consideration  for  which  the  sale  was  made,  a  specific 
execution  of  the  contract  ought  not  to  be  inferred.  .  .  . 

But  as  the  authority  of  Talbot's  son  is  expressly  denied,  it  is  also 
contended  that  evidence  of  his  authority  should  not  only  have  been 
introduced,  but  it  is,  moreover,  urged  that  the  authoriiy  should  be 
shown  to  have  been  in  writing.  That  to  make  the  sale  obligatory 
upon  Talbot,  his  son  must  have  been  clothed  with  power  to  sell,  is  a 
proposition  not  to  be  controverted ;  but  as  respects  the  justice  of  the 
case,  it  cannot  be  material  whether  the  authority  was  created  either 
by  writing  or  parol,  and  the  statute  against  frauds  and  perjuries  has 
never  been  held  to  require  it  to  be  in  writing. 

And  that  the  son  was  authorized  either  verbally  or  in  writing  to 
make  the  sale,  from  the  circumstances  detailed  in  the  evidence,  there 
is  no  room  for  a  moment  to  doubt. 
,  And  if  authorized,  according  to  the  settled  doctrine  of  the  law,  his 
being  an  infant  can  afford  no  objection  against  the  liability  of  Talbot ; 
for  although  the  contracts  of  infants  are  not,  in  all  cases,  binding 
upon  them,  there  is  no  doubt  but,  as  they  may  act  as  agents,  their 
contracts,  made  in  that  character,  if  otherwise  unexceptionable,  will 
be  binding  upon  their  principal.  .  .  . 

[Reversed  on  a  point  of  procedure.^ 


CHASTAIN   V.   ZACH. 

1  Hill  (S.  C.)  270.     1833. 

This  was  an  action  on  the  case  against  the  defendants  as  common 
carriers  on  the  Savannah  river,  for  a  loss  sustained  by  the  burning  of 
the  plaintiff's  cotton  on  board  their  boat.  The  boat  was  passing  down 
the  river,  when  the  plaintiff  came  to  a  landing  and  asked  if  it  could 


CHAP.    II.]  COMPETENCY   OF   PARTIES.  41 

carry  his  cotton.  The  patroon  (a  slave  belonging  to  one  of  the  de- 
fendants) answered  that  it  could.  The  cotton  was  received  and  was 
burnt  on  board  the  boat  before  it  reached  Augusta.  It  was  proved 
that  the  defendants  had  given  general  instructions  to  their  patroons 
to  take  in  freight  whenever  it  could  be  had,  and  that  in  one  instance 
one  of  the  defendants  had  received  pay  for  freight  engaged  by  his 
patroon. 

The  presiding  judge  charged  the  Jury  that  the  defendants  were  not 
liable,  unless  the  patroon  was  his  master's  agent,  and  authorized  to 
take  in  freight.  That  the  authority  might  be  proved  by  showing  that 
such  was  the  custom  of  boat  owners,  or  by  proving  that  the  defendants 
had  given  such  authority ;  that  to  establish  a  custom  it  must  be  proved 
to  be  universal ;  that  a  slave  might  be  the  agent  of  his  master,  and  if 
his  agency  was  established  the  master  was  bound;  and  whether  the 
agency  of  the  slave  was  established  in  this  case  was  a  question  sub- 
mitted to  their  decision.  The  jury  found  for  the  plaintiff  and  the 
defendants  appealed,  and  move  for  a  new  trial,  on  the  ground  of  error 
in  the  charge  of  the  presiding  judge. 

Johnson,  J.,  delivered  the  opinion  of  the  court. 

From  the  instructions  given  to  the  jury  it  is  more  than  probable 
that  they  found  the  verdict  on  the  ground  that  the  defendants  had 
constituted  their  patroon,  the  slave  Jack,  their  agent,  to  contract  with 
the  plaintiff  for  carrying  his  cotton,  and  on  that  ground  it  can  be  well 
sustained. 

It  is  not  questioned  that  a  master  may  constitute  his  slave  his  agents 
and  I  cannot  conceive  of  any  distinction  between  the  circumstances 
which  constitute  a  slave  and  a  freeman  an  agent  —  they  are  both  the 
creatures  of  the  principal,  and  act  upon  his  authority.  There  is  no 
condition,  however  degraded,  which  deprives  one  of  the  right  to  act 
as  a  private  agent  —  the  master  is  liable  even  for  the  act  of  his  dog,, 
done  in  pursuance  of  his  command.  Two  witnesses.  Beck  and  Eaton,, 
prove  that  defendants  had  given  general  instructions  to  their  patroons 
to  procure  freight  wherever  they  could;  and  in  one  instance  it  is 
shown  that  one  of  the  defendants  received  the  price  of  freight  on 
produce  so  received  and  carried  by  the  patroon,  a  distinct  recognition 
of  their  authority  to  contract  for  them;  and  there  is  not  a  tittle  of 
evidence  that  this  authority  was  ever  rescinded.  The  authority  was 
general  as  to  that  particular  business,  and  the  contract  to  carry  was 
directly  in  pursuance  of  it.    The  defendants  were  therefore  bound. 

The  proof  of  the  custom  appears  to  me  to  have  been  too  equivocal 
to  have  supported  the  verdict  on  that  ground  alone.  To  make  a  good 
custom  it  must  be  proved  to  be  general,  and  if  the  proof  had  been  that 
those  concerned  in  the  navigation  of  the  Savannah  river  had  from 
time  immemorial  authorized  and  permitted  their  slave  patroons  to 
contract  for  carrying  freight,  the  defendants  would  have  unques- 
tionably been  bound  by  it;  but  the  proof  here,  with  the  exception  of 


42  LOEB   A   BRO.    V.   DRAKEFORD.  [CHAP.   II. 

one  witness,  is  confined  to  particular  instances,  and  it  is  not  very 
obvious  that  that  witness  clearly  understood  what  is  meant  by  a 
general  custom. 

Motion  dismissed. 


3.    Joint  Agents. 
LOEB   &   BEO.    V.    DKAKEFOED. 

75  Ala.  464.     1883. 

Bill  in  equity  against  executors  of  Thomas  B.  Dryer.  From  a 
decree  dismissing  the  bill  complainants  appeal. 

SoMERViLLE,  J.  The  purpose  of  the  present  bill  is  to  claim  the 
benefit  of  certain  mortgages  and  other  collateral  securities  placed 
in  the  hands  of  Lehman,  Durr  &  Co.  by  one  Thomas  B.  Dryer,  in  the 
latter  part  of  the  month  of  March,  in  the  year  1881.  Dryer  was 
indebted  to  complainants  for  advances  made  to  him  during  that  year, 
and  also  for  antecedent  debts  aggregating  about  two  thousand  dollars, 
and  based  on  previous  transactions.  The  theory  of  the  bill  is,  that 
there  was  an  express  agreement  made  by  Dryer,  during  his  life-time, 
that  the  old,  or  pre-existing  debt  should  be  paid  out  of  these  securi- 
ties. The  M'hole  question  is  as  to  the  existence  of  such  an  agreement. 
It  is  not  contended  that  such  a  contract  was  made  with  the  deceased 
person,  but  only  with  his  authorized  agents. 

The  written  instruments  introduced  in  evidence  very  certainly  fail 
to  furnish  any  satisfactory  proof  of  it.  The  agreement  between 
Dryer  and  Lehman,  Durr  &  Co.,  bearing  date  on  the  30th  of  March, 
1881,  extends  the  benefit  of  these  securities  only  so  far  as  to  cover 
such  indebtedness  as  might  be  afterwards  incurred  for  advances 
made  by  the  complainants  to  Dryer  for  the  current  year.  No  reference 
is  made  to  any  other  indebtedness,  except  that  due  to  Lehman,  Durr 
&  Co.  as  to  which  there  is  no  controversy.  The  fact  that  the  latter 
parties  labored  under  the  conviction  that  Dryer  had  made  such  a 
contract,  and,  upon  the  faith  of  such  conviction,  entered  into  a 
written  agreement  with  complainants  to  hold  the  securities  for  them 
under  the  provisions  of  the  supposed  contract,  could  not,  in  any 
manner,  prejudice  the  rights  of  Dryer's  estate,  if  in  truth  and  fact 
there  was  no  such  contract.  This  proposition  is  too  manifest  for 
argument. 

It  is  claimed,  however,  that  this  agreement  was  authorized  by  one 
Felts,  who  acted  under  a  written  power  of  attorney  executed  by 
Dryer,  and  bearing  date  March  28,  1881.  The  testimony  shows  very 
conclusively,  that  Felts  did  assent  to  such  an  arrangement,  claiming 
his  authority  under  certain  power  of  attorney,  which  was  at  the  time 


CHAP.   II.]  JOINT   AGENTS.  43 

exhibited  to  the  other  contracting  parties.  But  this  was  a  joint 
power  of  attorney,  given  to  W.  G.  Campbell,  M.  B.  Swanson,  and  W. 
W.  Felts,  authorizing  the  three  to  act  as  agents  in  this  transaction 
jointly.  Such  a  power  conferred  upon  several  cannot  be  exercised 
by  one  alone,  at  least  in  the  case  of  private  agencies.  It  is  required 
that  all  must  act  together  jointly  in  the  execution  of  such  an  agency. 
Caldwell  v.  Harrison,  11  Ala.  755;  Story  on  Agency,  §  42;  Evans 
on  Agency  (Ewell's  ed.),  *32. 

Nor  could  such  a  trust  be  delegated  by  one  of  such  agents  to  an- 
other. The  principal  is  supposed  to  rely  upon  the  personal  integrity 
and  ability  of  each  of  his  selected  agents,  these  qualifications  consti- 
tuting the  reason  of  the  trust.  Hence,  the  maxim  applies,  Delegatus 
non  delegare  potest.    Story  on  Contr.  §  127. 

We  are  satisfied  from  the  testimony  that  neither  Campbell  nor 
Swanson  concurred  with  Felts  in  the  execution  of  this  power.  They 
were  not  personally  present  at  the  time,  and  are  not  satisfactorily 
shown  to  have  afterwards  assented  to  what  he  did  in  the  attempted 
execution  of  their  joint  authority.  The  power  was  not,  therefore, 
legally  executed,  and  the  contract  made  by  Felts,  acting  alone,  con- 
ferred no  lien  in  favor  of  the  complainants  upon  the  proceeds  of  the 
various  collateral  securities  placed  by  Dryer  in  the  hands  of  Lehman, 
Durr  &  Co. 

We  see  nothing  in  the  record  authorizing  us  to  infer  that  any  other 
person  or  persons  had  authority  from  the  deceased,  either  to  make 
or  to  ratify  the  contract  attempted  to  be  made  between  Felts  and  the 
complainants,  as  stated  in  the  bill. 

The  decree  of  the  chancellor  is,  in  our  judgment,  free  from  error, 
and  it  is  affirmed.^ 


DEAKIN   V.   UNDERWOOD. 

37  Minn.  98.     1887. 

Plaintiff  appeals  from  an  order  denying  a  new  trial  after  judg- 
ment for  defendant. 

Mitchell,  J.  This  was  an  action  to  compel  specific  performance 
of  a  contract  for  the  sale  of  real  estate.  Plaintiff  alleges  that  the 
defendant  made  the  contract  "  by  A.  B.  Wilgus,  his  duly-authorized 

>  Accord:  Brown  v.  Andrews,  18  L.  J.  Q.  B.  (n.  s.)  153;  Bundle  r.  Cutting,  18 
(^olo.  3.37  :  Rollins  v.  Phelps,  5  Minn.  463 ;  Salisbury  v.  Brisbane,  61  N.  Y.  617 ; 
North  Carolina  Ry.  v.  Swepson,  71  N.  C.  350.  Private  arbitrators  must  all  act. 
Green  v.  Miller,  6  Johns.  (N.  Y.)  39.  But  in  a  public  quasi-Judicial  body  a  majority 
may  act.    Ex  parte  Rogers,  7  Cow.  (N.  Y. )  526. 

If  the  power  is  by  its  terms  to  be  exercised  "  Jointly  or  severally  "  any  numlier 
may  act.  Guthrie  v.  Armstrong,  5  Barn.  &  Aid.  628 ;  Wamsley  v.  Darragh,  14 
Misc.  (N.  Y.)  566;  Cedar  Rapids,  &c.,  Co.  v.  Stewart,  25  Iowa,  115.  If  the  intent 
that  a  majority  may  act  is  reasonably  to  be  Inferred  that  construction  will  be  fol- 
lowed.    Hawiey  v.  Keeler,  53  N.  Y.  114. 


44  DEAKIX    V.    UXDERWOOD.  [CHAP.    II. 

agent  and  attorney  in  fact."  The  contract  is  attached  as  an  exhibit 
to  the  complaint,  and  is  signed :  "  0.  W.  Underwood,  By  A.  B. 
WiLGUS,  Agent." 

.  It  appears  from  the  evidence  that  the  authority  to  sell  was  given 
to  the  firm  of  A.  B.  Wilgus  &  Bro.,  a  partnership  composed  of  A.  B. 
Wilgus  and  E.  P.  Wilgus.  It  is  claimed  that,  upon  this  state  of 
facts,  there  was  a  failure  of  proof.  But  the  material  allegation  of 
the  complaint  was  that  defendant  had  made  this  contract  with  plain- 
tiff. It  was  not  necessary  to  allege  that  it  was  made  through  an 
agent.  It  would  have  been  enough  to  declare  upon  it  generally  as 
of  the  personal  act  of  the  principal.  The  substance  of  the  issue  was 
not  whether  defendant  had  made  the  contract  through  an  agent,  but 
whether  he  had  made  it  at  all.  Hence  it  cannot  be  said  that  there 
was  a  failure  of  proof.  The  most  that  can  be  possibly  claimed  is 
that  there  was  a  variance  between  the  allegation  and  proof,  but 
which  could  not,  in  this  case,  have  misled  the  defendant  to  his  prej- 
udice, and  therefore  is  not  material. 

Defendant  further  contends  that  the  authority  to  sell  being  to  the 
firm  of  A.  B.  Wilgus  &  Bro.,  which  was  composed  of  two  members, 
this  authority  could  only  be  executed  by  the  two  jointly,  and  not  by 
one  separately,  so  as  to  bind  the  principal.  In  support  of  this  con- 
tention, he  invokes  the  well-known  general  rule  of  the  common  law 
that,  where  an  authority  to  do  an  act  is  conferred  upon  two  or  more 
agents,  the  act  is  valid  to  bind  the  principal  only  when  all  of  them 
concur  in  doing  it ;  the  power  being  joint  and  not  several.  Eollins  v. 
Phelps,  5  Minn.  373  (463) .  Even  where  the  authority  is  given  to  sev- 
eral agents,  this  rule  is  not  so  rigid  and  inflexible  as  to  overcome  the 
■apparent  intention  of  the  parties  to  the  contrary.  Story,  Ag.  §§  42, 
43;  Hawley  v.  Keeler,  53  N.  Y.  114.  But  we  think  the  rule  has  no 
application  where  the  authority  is  given  to  a  partnership  as  such. 
Each  member  of  a  partnership  is  the  agent  of  the  firm,  and  all  the 
partners  are  jointly  accountable  for  the  acts  of  each  other;  and, 
where  a  person  appoints  a  partnership  as  his  agent,  he  must  be  deemed 
to  have  done  so  with  reference  to  these  rules  of  law.  When  a  person 
delegates  authority  to  a  firm,  it  is  an  appointment  of  the  partnership 
as  his  agent,  and  not  of  the  individual  members  as  his  several  and 
separate  agents.  Hence  each  partner  may  execute,  and  the  act  of 
one  is  the  act  of  the  firm,  and  in  strict  pursuance  of  the  power. 
Gordon  v.  Buchanan,  5  Yerg.  71. 

But  it  is  claimed  that,  conceding  this,  he  must  do  it  in  the  name 
of  the  firm,  and  that  if,  as  in  the  present  case,  he  uses  his  individual 
name,  it  is  not  the  act  of  the  partnership,  and  will  not  bind  it.  The 
defendant  seems  to  overlook  the  fact  that  the  contract  is  the  act  of 
the  principal  and  not  of  the  agent,  and  that  the  party  to  be  bound  is 
the  former  and  not  the  latter.  Hence  the  important  question  is 
whether  the  principal's  name  has  been  signed  to  the  contract  by  one 


CHAP.   II.]  JOINT   AGENTS.  45 

having  authority  to  do  so.  That  in  this  case,  A.  B.  Wilgus,  as  a 
member  of  the  firm  of  A.  B.  Wilgus  &  Bro.,  had,  by  virtue  of  the 
authority  given  the  firm,  power  to  execute  this  contract  in  the  natne 
of  defendant,  cannot  be  questioned,  and  it  is  wholly  immaterial 
whether  to  that  name  be  added  "  by  A.  B.  Wilgus  &  Bro.,"  or  "  by  A. 
B.  Wilgus,"  or  nothing  at  all.  An  agent  authorized  to  sign  the  name 
of  his  principal  effectually  binds  him  by  simply  fixing  to  the  instru- 
ment the  name  of  the  principal,  as  if  it  were  his  personal  act.  The 
particular  form  of  the  execution  is  not  material,  if  it  be  done  in  the 
name  of  the  principal,  and  by  one  having  authority  in  fact  to 
execute  the  instrument.  Berkey  v.  Judd,  22  Minn.  287,  302;  First 
National  Bank  v.  Loyhed,  28  Minn.  396,  10  N.  W.  Eep.  421;  De- 
viimey  v.  Eeynolds,  1  Watts  &  S.  328;  Forsyth  v.  Day,  41  Me. 
382.  .  .  . 

Order  reversed. 


COMMONWEALTH  ex  rel.  HALL    v.    CANAL 
COMMISSIONERS. 

9  Watts  (Pa.)  466.     1840. 

This  was  an  application  by  Elizabeth  Hall  for  a  rule  to  show  cause 
why  a  mandamus  should  not  issue  to  the  canal  commissioners  of 
Pennsylvania,  requiring  them  to  pay  the  sum  of  two  thousand  five 
hundred  dollars  to  the  petitioner,  being  the  amount  of  damages 
awarded  to  her  by  the  board  of  appraisers  for  injury  done  to  her 
lands  by  reason  of  the  construction  of  the  canal. 

On  the  24th  of  August,  1835,  Elizabeth  Hall  made  an  application 
to  the  canal  commissioners  for  the  payment  of  damages  done  to  her 
land,  and  tliey  offered  to  pay  her  two  hundred  dollars  in  full,  which 
she  refused,  and  appealed  to  the  board  of  appraisers,  who,  on  the 
6th  of  September,  1838,  made  a  report  in  her  favor  of  two  thousand 
five  hundred  dollars ;  this  report  was  signed  by  two  only  of  the  three 
appraisers,  the  third  having  previously  resigned,  and  no  appointment 
had  been  made  in  his  room.  This  report  was  made  to  the  canal  com- 
missioners on  the  6th  of  November,  1838,  and  they  ordered  the  amount 
to  be  paid  by  the  superintendent.    The  money  was  not  paid. 

The  question  submitted  to  the  court  was :  —  Whether  the  adjudica- 
tion of  the  appraisers  of  the  6th  of  September,  1838,  submitted  to 
the  canal  commissioners  on  the  6th  of  November,  1838,  and  then 
approved  by  them,  is  final  and  conclusive,  and  entitles  the  applicant 
to  the  amount  of  the  damages  thus  assessed? 

The  opinion  of  the  court  was  delivered  by 

Gibson,  C.  J.  It  is  usually  said  that  a  power  of  a  private  nature 
—  that  is,  a  power  to  do  a  private  act  —  must  be  executed  by  all 


46         COMMONWEALTH   ex  rel.   HALL   V.   CANAL   COMM's.      [CHAP.   II. 

to  whom  it  is  given ;  but  that  a  power  of  a  public  nature,  or  to  do  a 
public  act,  may  be  executed  by  a  majority.  That  there  is  a  distinction, 
is* undoubted;  but  that  the  specific  ground  of  it  is  to  be  found  in  the 
nature  of  the  act,  is  not  quite  so  clear.  In  Withnell  v.  Gartham,  6 
Term  Eep.  388,  a  power  to  appoint  a  private  charity  which  had  been 
delegated  by  a  testator  to  the  vicar  and  church  wardens  of  the  parish, 
was  held  to  have  been  well  executed  by  a  majority  of  the  church 
wardens,  because  they  were  a  quasi  corporation;  while,  on  the  other 
hand,  an  order  of  affiliation  was  quashed  in  The  Queen  v.  West,  6 
Mod.  180,  because  it  was  founded  on  an  affidavit  made  before  only 
one  of  the  justices,  though  the  act  of  taking  it  was  certainly  of  a  public 
nature.  If,  then,  the  general  rule  is  as  it  is  usually  stated,  these 
two  cases  must  be  excepted  from  it. 

The  criterion,  however,  seems  to  be  not  so  much  the  character  of 
the  power,  or  of  the  act  to  be  done  by  virtue  of  it,  as  the  character  of 
the  agent  appointed  for  the  performance  of  it.  Perhaps  the  result 
of  the  cases  is,  that  an  authority  committed  to  several  as  individuals, 
is  presumed  to  have  been  given  to  them  for  their  personal  qualifica- 
tions, and  with  a  consequent  view  to  an  execution  of  it  by  them  all ; 
but  that  where  it  is  committed  to  them  as  a  body,  there  is  no  pre- 
sumption in  the  way  of  the  usual  method  of  corporate  action  by  a 
majority.  In  the  case  of  The  Baltimore  Turnpike,  5  Binn.  481, 
viewers  appointed  by  the  quarter  sessions  to  assess  damages  done  to 
the  soil  by  a  turnpike  company,  were  held  to  be  such  a  body.  That 
case  is  identical  with  the  present,  except  that  it  is  not  near  so  strong, 
inasmuch  as  the  official  and  quasi  corporate  character  of  the  canal 
appraisers,  keeping  as  they  must  a  record  of  their  proceedings,  hav- 
ing succession,  and  being  called  a  board  in  the  act  by  which  they  are 
constituted,  is  more  distinct  than  that  of  viewers  of  damages,  who 
become  fundi  officio  by  performance  of  the  single  act  for  which  they 
were  appointed.  So,  in  The  County  Commissioners  of  Allegheny  v. 
Lecky,  6  Serg.  &  Eawle,  170,  a  power  to  purchase  a  site  for  a  jail,  was 
held  to  be  well  executed  by  a  majority,  having  been  given  to  the 
commissioners,  not  individually  but  collectively  by  their  official  title, 
and  therefore  carrying  with  it  an  apparent  intent  that  it  should  be 
executed  by  them  as  a  board.  In  the  case  before  us,  the  appraisers 
could  not  have  acted  otherwise. 

The  principle  of  execution  by  a  majority  was  doubtless  borrowed 
from  the  practice  of  corporations,  with  whom,  as  with  every  associated 
body,  it  is  a  principle  of  necessity;  for  it  would,  in"  most  cases,  be 
impossible  to  obtain  the  assent  of  all  the  members  of  a  numerous 
assembly;  and  this,  perhaps,  is  the  consideration  which  lies  at  the 
root  of  the  whole  matter.  In  The  Commissioners  v.  Lecky,  it  was  said 
by  the  chief  justice,  that  the  rule  which  requires  execution  by  all,  has 
never  been  applied  to  public  business  of  a  judicial  or  of  a  deliberative 
nature ;    or  to  cases  where  powers  are  given  to  corporate  bodies  — 


CHAP.   II.]  JOINT  AGENTS.  47 

all  which  is  incontestable.  But  all  Judicial  and  deliberative  bodies 
partake  strongly  of  the  nature  of  corporations.  Every  legislature  is 
strictly  a  court ;  whence  it  is  said  by  Sir  Edward  Coke,  that  the  Brit- 
ish Parliament,  consisting  as  it  does  of  the  king,  lords,  and  commons, 
is  the  highest,  most  absolute,  and  most  honorable  court  of  justice  in 
England ;  1  Inst.  109  a ;  and  I  believe  it  is  still  customary  in  some 
of  the  Eastern  States  to  call  a  legislature  the  general  court.  County 
commissioners  have  always  been  at  least  quasi  corporations ;  in  which 
respect  they  differ  from  commissioners  to  take  depositions,  and  from 
arbitrators  chosen  for  their  presumed  fitness  for  the  business  com- 
mitted to  them,  who,  where  the  contrary  is  not  specified  in  the  terms 
of  their  appointment,  must  all  join.  It  may  be  safely  said,  then,  that 
any  duty  of  an  aggregate  organ  of  the  government,  may  be  performed 
by  a  majority  of  its  members  where  the  constituting  power  has  not 
expressly  required  a  concurrence  of  the  whole. 

Now  these  appraisers  were  constituted  a  board  for  the  performance 
of  duties  of  a  public,  deliberative,  and  judicial  nature;  they  were,  in 
short,  a  tribunal  of  appellate  jurisdiction.  Though  not  apparent  on 
the  face  of  the  return,  it  is  conceded  that  there  was  a  vacancy  by 
resignation  in  the  membership  at  the  time  of  the  assessment.  But 
that  is  a  fact  which,  instead  of  weakening  the  relator's  case,  would 
strengthen  it,  and  the  possibility  of  its  recurrence  may  make  it  a 
legitimate  ground  of  argument;  for  it  cannot  be  supposed  that  the 
functions  of  the  board  would  be  suspended,  to  the  detriment  of  the 
public,  by  the  loss  of  one  of  its  members.  Private  business  might 
bear  to  be  postponed  till  such  a  loss  could  be  repaired,  but  public 
affairs  are  usually  so  urgent  that  they  could  not.  Thus  it  was  held  in 
Townsend  v.  Wilson,  3  Mad.  Chan.  Eep.  361;  s.  c.  1  Barn  &  Aid. 
608 ;  that  the  survivors  of  three  trustees,  to  whom  a  power  to  sell  a& 
well  as  to  fill  up  vacancies  in  their  number  had  been  given  by  deed, 
were  rendered  incompetent  to  act,  by  the  death  of  one  of  them;  and 
that  their  competency  could  be  restored  only  by  a  new  appointment. 
But  in  Doe  deni.  Bead  v.  Godwin,  1  Dowl.  &  Ryl.  259,  where  Parlia- 
ment had  vested  the  prizes  of  a  city  lottery  in  five  trustees  by  name,, 
with  power  to  fill  up  vacancies  by  death  before  the  drawing  and  con- 
veyance of  the  prizes  (city  lots)  to  the  fortunate  ticket-holders,  it 
was  held  in  ejectment  that  the  conveyance  of  a  prize  by  four  of  the 
five  (one  having  died)  was  effectual  and  good.  In  every  aspect,  then, 
it  appears  that  two  members  of  the  board  are  competent  to  constitute 
a  quorum ;  and  that  an  appraisement  by  it,  thus  constituted,  is  valid. 

As  the  parties  desire  no  more  than  to  have  the  opinion  of  the  court 
on  the  point  presented  by  the  merits,  we  forbear  to  inquire  into  our 
power  to  issue  a  mandamus  to  officers  who  represent  the  government;, 
or  make  any  final  disposition  of  the  rule.^ 

*  In  National  Bank  v.  Mt.  Tabor,  52  Vt.  87,  the  necessity  that  all  should  assemble, 
or  have  due  notice  of  a  lawful  meeting,  Is  insisted  upon  as  a  prerequisite  to  the- 


48  .  JOHNSON   V.   DODGE.  [CHAP.   II. 

4.    Form  of  Contract 
JOHNSON   V.   DODGE. 

17  111.  433.     1856. 

Suit  for  specific  performance.  Bill  dismissed.  Complainant  brings 
writ  of  error. 

Skinner,  J.  This  was  a  bill  in  equity,  for  the  specific  performance 
of  a  contract  for  the  sale  of  land. 

The  bill  and  proofs  show  that  one  Iglehart,  a  general  land  agent, 
executed  a  contract  in  writing  in  the  name  of  Dodge,  the  respondent, 
for  the  sale  of  certain  land  belonging  to  Dodge,  to  one  Walters,  and 
received  a  portion  of  the  purchase  money:  that  Walters  afterwards 
assigned  the  contract  to  Johnson,  the  complainant;  a  tender  of  per- 
formance on  the  part  of  Walters,  and  on  the  part  of  Johnson,  and  a 
refusal  of  Dodge  to  perform  the  contract.  The  answer  of  Dodge,  not 
under  oath,  denies  the  contract  and  sets  up  the  Statute  of  Frauds  as 
a  defence  to  any  contract  to  be  proved.  The  evidence,  to  our  minds, 
establishes  a  parol  authority  from  Dodge  to  Iglehart  to  sell  the  land, 
substantially  according  to  the  term  of  the  writing.  It  is  urged 
against  the  relief  prayed,  that  Iglehart,  upon  a  parol  authority  to  sell, 
could  not  make  for  Dodge  a  binding  contract  of  sale  under  the 
Statute  of  Frauds ;  that  the  proofs  do  not  show  an  authority  to  Igle- 
hart to  sign  the  name  of  Dodge  to  the  contract,  and  therefore  that 
the  writing  is  not  the  contract  of  Dodge ;  that  the  writing  not  being 
signed  by  the  vendee  is  void  for  want  of  mutuality;  that  no  suffi- 
cient tender  of  performance  on  the  part  of  complainant  is  proved, 
and  that  the  proof  shows  that  the  authority  conferred  was  not  pursued 
by  the  agent.  Equity  will  not  decree  specific  performance  of  a  con- 
tract founded  in  fraud;  but  where  the  contract  is  for  the  sale  of 
land,  and  the  proof  shows  a  fair  transaction,  and  the  case  alleged 
is  clearly  established,  it  will  decree  such  performance. 

In  this  case,  the  contract,  if  Iglehart  had  authority  to  make  it,  is 
the  contract  of  Dodge  and  in  writing ;  and  it  is  the  settled  construc- 
tion of  the  Statute  of  Frauds,  that  the  authority  to  the  agent  need 
not  be  in  writing,  and  by  this  construction  we  feel  bound.  1  Parsons 
on  Cont.  43,  and  cases  cited ;  Doty  v.  Wilder,  15  111.  407 ;  2  Parsons 
on  Cont.  292,  293,  and  cases  cited;  Saunders'  PI.  and  Ev.  541,  542, 
and  551 ;  Story  on  Agency,  50 ;  2  Kent's  Com.  614.    Authority  from 

validity  of  the  acts  of  a  majority.  See  also  Williams  v.  School  District,  21  Pick. 
(Mass.)  75  ;  People's  Bank  v.  St.  Anthony's  Church,  109  N.  Y.  512  ;  Cammeyer  v.  The 
Churches,  2  Sandf.  Oh.  (N.  Y.)  186;  Constant  v.  Rector,  4  Daly  (N.  Y.)  305;  Cooley 
V.  O'Connor,  12  Wall.  (U.  S.)  391.  A  majority  of  the  directors  of  a  corporation,  or 
a  committee,  constitute  a  quorum,  and  a  majority  of  the  quorum  may  act.  McNeil  v. 
Boston  Chamber  of  Commerce,  154  Mass.  277. 


CHAP.    II.]  FORM    OF    CONTRACT.  49 

Dodge  to  Iglehart  to  sell  the  land  included  the  necessary  and  usual 
means  to  make  a  binding  contract  in  the  name  of  the  principal.  If 
the  authority  to  sell  may  be  created  by  parol,  from  this  authority 
may  be  implied  the  power  to  use  the  ordinary  and  usual  means  of 
effecting  a  valid  sale ;  and  to  make  such  sale  it  was  necessary  to  make 
a  writing  evidencing  the  same.  If  a  party  is  present  at  the  execution 
of  a  contract  or  deed,  to  bind  him  as  a  party  to  it,  when  his  signature 
is  affixed  by  another,  it  is  necessary  that  the  person  so  signing  for 
him  should  have  direct  authority  to  do  the  particular  thing,  and  then 
the  signing  is  deemed  his  personal  act.  Story  on  Agency,  51.  In 
such  case  the  party  acts  without  the  intervention  of  an  agent,  and 
uses  the  third  person  only  as  an  instrument  to  perform  the  mere  act  of 
signing.  This  is  not  such  a  case.  The  agent  was  authorized  to 
negotiate  and  conclude  the  sale,  and,  for  that  purpose,  authority  was 
implied  to  do  for  his  principal  what  would  have  been  incumbent  on 
the  principal  to  do  to  accomplish  the  same  thing  in  person.  Hawkins 
V.  Chance,  19  Pick.  502;  2  Parsons  on  Cont.  291;  Story  on  Agency, 
Chap.  6;  Hunt  v.  Gregg,  8  Blackford,  105;  Lawrence  v.  Taylor,  5 
Hill,  107,  15  111.  411 ;  Vanada  v.  Hopkins,  1  J.  J.  Marsh.  283 ;  Kerby 
V.  Grigsby,  9  Leigh,  387. 

The  mode  here  adopted  was  to  sign  the  name  of  Dodge,  "  by " 
Iglehart,  "  his  agent,"  and  it  is  the  usual  and  proper  mode  in  carry- 
ing out  an  authority  to  contract  conferred  on  an  agent.  But  if  the 
signing  the  name  of  the  principal  was  not  authorized  by  the  authority 
to  sell,  yet  the  signature  of  the  agent  is  a  sufficient  signing  under  the 
statute.  The  language  of  the  statute  is,  "  signed  by  party  to  be 
charged  therewith,  or  some  other  person  thereto  by  him  lawfully 
authorized."  If  Iglehart  had  authority  to  sign  Dodge's  name,  then 
the  contract  is  to  be  treated  as  signed  by  Dodge ;  and  if  Iglehart  had 
authority  to  sell,  in  any  view,  his  signature  to  the  contract  is  a  sign- 
ing by  "  some  other  person  thereto  by  him  lawfully  authorized," 
within  the  statute.  Truman  v.  Loder,  11  Ad,  and  El.  589 ;  2  Par- 
sons on  Cont.  291.  It  is  true  that  authority  to  convey  must  be  in 
writing  and  by  deed ;  for  land  can  only  be  conveyed  by  deed,  and  the 
power  must  be  of  as  high  dignity  as  the  act  to  be  performed  under  it. 
It  was  not  necessary  to  the  obligation  of  the  contract  that  it  should 
have  been  signed  by  the  vendee.  His  acceptance  and  possession  of 
the  contract  and  payment  of  money  under  it  are  unequivocal  evi- 
dences of  his  concurrence,  and  constitute  him  a  party  as  fully  and 
irrevocably  as  his  signing  the  contract  could.  2  Parsons  on  Cont. 
290;  McCrea  v.  Purmort,  16  Wend.  160;  Shirly  v.  Shirly,  7  Black- 
ford, 452. 

We  cannot  question  the  sufficiency  of  the  tender  in  equity  to  entitle 
the  complainant  to  specific  performance.  Webster  et  al.  v.  French  et 
ah,  11  111.  278.  Nor  do  we  find  any  substantial  departure  in  the 
contract  from  the  authority  proved.    While  we  hold  that  the  author- 

4 


50  HANFOED  V.   MCNAIB.  [CHAT.    II. 

ity  to  the  agent  who  for  his  principal  contracts  for  the  sale  of  land 
need  not  be  in  writing,  yet  we  should  feel  bound  to  refuse  a  specific 
performance  of  a  contract  made  with  an  agent  upon  parol  authority, 
without  full  and  satisfactory  proof  of  the  authority,  or  where  it 
should  seem  at  all  doubtful  whether  the  authority  was  not  assumed 
and  the  transaction  fraudulent. 

Decree  reversed  and  cause  remanded. 

Decree  reversed. 


HANFOED   V.   McNAIR. 

9  Wend.   (N.  Y.)  54.     1832. 

Action  of  covenant  on  a  sealed  instrument  signed  "  For  Matthew 
McNair,  Aaron  Bush,  L.  S."    Verdict  for  plaintiif. 

By  the  Court,  Sutherland,  J.  It  is  an  insuperable  objection  to 
the  plaintiff's  recovery  in  this  action,  that  no  competent  authority 
from  the  defendant  to  Bush  is  shown  to  execute  the  covenant  on  which 
this  suit  is  founded.  An  agent  cannot  bind  his  principal' by  deed, 
unless  he  has  authority  by  deed  so  to  do.  The  only  exception  to  the 
rule  that  the  authority  to  execute  a  deed  must  be  by  deed,  is  where 
the  agent  or  attorney  affixes  the  seal  of  the  principal  in  his  presence 
and  by  his  direction.^  Co.  Litt.  52,  a;  7  T.  R.  209;  5  Mass.  R.  40; 
Comyn's  Dig.  tit.  Attor.  C.  1,  C.  5 ;  4  T.  R.  313 ;  2  Caines'  Cas.  in 
Err.  1 ;  9  Johns.  R.  285 ;  Liverm.  on  Agency,  35 ;  2  Kent's  Comm. 
478 ;  7  Cowen,  453.  The  authority  of  Bush  was  to  contract  with  the 
plaintiff  for  the  timber  in  question.  It  does  not  appear  ever  to  have 
been  in  writing.  It  conferred  no  power  upon  him  to  bind  his  prin- 
cipal by  a  contract  under  seal.  The  subsequent  acts  of  the  defendant 
imder  this  contract,  recognizing  and  carrying  it  into  effect,  may  be  suf- 
ficient to  make  it  binding  upon  him  as  a  parol  contract,  but  cannot 
make  it  his  deed.  If  a  deed  executed  by  an  agent  under  an  express 
original  parol  authority  would  not  be  binding  on  the  principal,  it  must 
necessarily  follow  that  no  subsequent  parol  acknowledgment  or  acts 
in  pais  can  produce  such  effect.  This  was  expressly  held  by  Gibbs,  Ch. 
J.,  in  Sterglity  v.  Eggington,  1  Holt,  141 ;  3  Com.  L.  R.  54,  S.  C. 
That  was  debt  upon  an  award  made  pursuant  to  a  submission  under 
seal,  executed  by  one  partner  for  himself  and  his  co-partner.  The 
plaintiff  offered  to  prove  that  the  partner  who  did  not  execute  the 
deed  gave  authority  to  the  other  to  execute  it  for  him,  and  that  he  had 
subsequently  acknowledged  the  agreement.  The  chief  justice  said  the 
authority  to  execute  must  be  by  deed.  If  one  partner,  who  does  not 
execute,  acknowledged  that  he  gave  an  authority  to  execute  for  him,  it 

»  Or  In  case  of  a  partnership  or  corporation.  Smith  v.  Kerr,  3  N.  Y.  144 ;  Fitch 
V.  Steam  Mill  Co.,  80  Me.  34. 


CHAP,   II.]  FORM   OF   CONTRACT.  51 

must  be  presumed  to  have  been  a  legal  authority ;  and  that  must  be 
under  seal  and  produced.  One  man  cannot  authorize  another  to  exe- 
cute a  deed  for  him,  except  by  deed.  No  subsequent  acknowledgment 
will  do.  I  do  not  perceive  how  the  circumstance  that  a  counterpart 
of  the  agreement,  executed  in  the  same  manner  as  the  original  was 
delivered  by  Bush  to  McXair  and  received  by  him  without  objection, 
avoids  the  difficulty.  It  is  but  evidence  of  a  subsequent  acknowledg- 
ment or  ratification  of  the  deed.  The  principle  of  the  case  of  Lewis  v. 
Payne,  8  Cowen,  71,  does  not  apply.  There  both  parts  of  the  lease 
were  originally  well  executed,  and  it  was  held  that  the  subsequent 
fraudulent  alteration  of  the  one  by  one  of  the  parties  did  not  affect  or 
destroy  the  other.    They  were  both  originals. 

Whether  the  plaintiff  can  treat  this  as  the  parol  contract  of  the 
defendant,  and  recover  upon  it  in  an  action  of  assumpsit,  I  give  no 
definitive  opinion.  The  case  of  Banorgee  i\  Hovey  and  others,  5 
Mass.  R.  14,  would  seem  to  hold  that  he  could  not.  That  case,  how- 
ever, is  in  some  respects  essentially  different  from  this. 

Although  the  verdict  of  the  jury  appears  to  me  to  be  against  the 
weight  of  evidence  on  some  of  the  points  on  which  they  must  have 
passed,  if  that  were  the  only  diflficulty  in  the  case,  I  should  not  feel 
authorized  to  disturb  the  verdict.  On  the  first  ground,  however, 
the  verdict  must  be  set  aside,  and  a  new  trial  granted.^ 


GORDON    V.   BULKELEY. 

14  Serg.  &  R.  (Pa.)  331.     1826. 

Action  of  debt  upon  a  bond.  Plea,  non  est  factum.  Judgment 
for  plaintiff.  The  bond  was  signed  and  sealed  by  John  Gordon,  for 
himself  and  Groves  Gordon,  in  the  absence  of  the  latter,  but  under  a 
parol  authority. 

Rogers,  J.  The  single  question  in  this  case  is,  whether  a  bond 
can  be  executed  in  the  absence  of  one  of  the  obligors,  by  tht  other 
signing  the  name  of  the  absent  obligee,  and  affixing  his  seal,  having 
but  a  parol  authority  to  do  so? 

'  "  It  Is  a  maxim  of  the  common  law  that  an  authority  to  execute  a  deed  or 
Instrument  under  seal  must  be  conferred  by  an  Instrument  of  equal  dignity  and 
solemnity ;  that  Is,  by  one  under  seal.  This  rule  is  purely  technical.  A  disposition 
has  been  manifested  by  most  of  the  American  courts  to  relax  its  strictness,  espe- 
cially in  its  application  to  partnership  and  commercial  transactions.  I  think  the 
doctrine  as  it  now  prevails  may  be  stated  as  follows,  viz. :  if  a  conveyance  or  any 
act  is  required  to  be  by  deed,  the  authority  of  the  attorney  or  agent  to  execute  it 
must  be  conferred  by  deed  ;  but  if  the  instrument  or  act  would  be  effectual  without 
a  seal,  the  addition  of  a  seal  will  not  render  an  authority  under  seal  necessary,  and 
if  executed  under  a  parol  authority  or  subsequently  ratified  or  adopted  by  parol,  the 
Instrument  or  act  will  be  valid  and  binding  on  the  principal.  It  is  said  that  the  rule 
as  thus  relaxed  is  confined  in  its  application  to  transactions  between  partners.  But 
it  seems  to  me  that  a  distinction  between  partners  and  other  persons  in  the  appli- 
cation of  the  rule  as  relaxed  and  qualified  by  recent  decisions,  stands  upon  no  solid 
foundation  of  reason  or  principle."    Paige,  J.,  in  Worrall  v.  Munn,  5  N.  Y.  229,  239. 


52  GORDON   V.   BULKELEY.  [CHAP.   II. 

Public  convenience  requires  that  one  man  should  have  power  to 
authorize  another  to  execute  a  contract  for  him,  as  the  business  may 
be  frequently  as  well  performed  by  attorney  as  in  person.  But  it  is 
a  general  rule,  that  such  delegation  or  authority  must  be  by  deed, 
that  it  may  appear  that  the  attorney  or  substitute  had  a  commission 
or  power  to  represent  the  party;  and,  further,  that  it  may  appear 
that  the  authority  was  well  pursued.    I  Bac.  Ab.  199 ;  Co.  Litt.  48  b. 

But  this  is  said  to  be  different  from  a  letter  of  attorney,  and,  in 
some  respects,  it  may  be  distinguished  from  the  cases  cited ;  but  there 
is  no  difference  in  principle.  Great  abuse  might  arise,  if  one  man, 
arid  particularly  an  insolvent  debtor,  should  have  it  in  his  power  to 
bind  another  in  his  absence  by  so  solemn  an  instrument  as  a  deed, 
with  a  mere  parol  authority;  in  such  a  case,  society  would  be  too 
much  exposed  to  the  designs  of  the  artful  and  unprincipled,  sup- 
ported, as  they  would  frequently  be,  by  the  testimony  of  confederated 
and  perjured  witnesses.  The  distinction  has  been  taken  between  a 
sealed  and  an  unsealed  instrument,  between  a  bond  and  a  promissory 
note.  No  man  can  bind  another  by  deed,  unless  he  has  been  author- 
ized by  deed  to  do  it ;  and  if  a  person,  however  authorized,  if  not  by 
an  instrument  under  seal,  make  and  execute  a  deed,  expressed  to  be 
iu'behalf  of  liis  principal,  the  principal  is  not  bound  by  the  deed, 
although  he  who  made  it  is  bound.  Banorgee  v.  Hovey,  et  al.,  5  Mass. 
Rep.  11;  Hatch  v.  Smith,  5  Mass.  Rep.  52. 

A  written  or  parol  authority  is  sufficient  to  authorize  a  person  to 
make  a  simple  contract,  as  agent  or  attorney,  and  to  bind  his  principal 
to  the  performance  of  it,  without  a  formal  letter  of  attorney  under 
seal.  Stackpole  v.  Arnold,  11  Mass.  Rep.  37;  Long  v.  Colbum,  11 
Mass.  Rep.  97;  The  President,  &c.,  of  Northampton  Bank  v.  Pepoon, 
11  Mass.  Rep.  288. 

The  distinction  then  appears  to  be  clearly  taken  between  a  con- 
tract under  seal  and  a  simple  contract,  and  I  feel  no  disposition  to 
extend  the  law,  believing  that  public  policy  requires  that  the  opera- 
tion of  a  parol  authority  should  be  rather  restricted  than  enlarged. 
The  case  we  have  now  under  consideration  is  an  exceedingly  strong 
one:  an  insolvent  debtor,  attempting  to  bind  another  as  his  surety, 
by  bond,  in  the  absence  of  the  surety,  and  with  but  mere  parol  author- 
ity to  do  so.  As  then  Groves  Gordon  was  not  present  when  the  bond 
was  executed,  and  John  Gordon  had  no  written  authority  to  execute 
the  bond,  I  am  of  opinion  that,  although  it  is  the  bond  of  John 
Gordon,  yet  it  is  not  the  bond  of  Groves  Gordon,  the  surety.  9  Johns. 
285. 

Judgment  reversed,  and  a  venire  facias  de  novo  awarded. 


CHAP.   II.]  FORM   OF   CONTRACT.  53 

GARDNER  v.    GARDNER. 

5  Cu8h.  (Mass.)  483.     1850. 

Writ  of  Entry  to  foreclose  a  mortgage.  Conditional  judgment 
for  demandant,  subject  to  the  opinion  of  the  court  as  to  whether  the 
mortgage  deed  was  properly  executed.  The  grantor's  name  was  signed 
in  her  presence  by  her  daughter,  acting  under  parol  authority. 

Shaw,  C.  J.  The  only  question  is  upon  the  sufficiency  of  the 
execution  of  a  mortgage  deed,  as  a  good  and  valid  deed  of  Polly 
Gwinn.  The  execution  of  the  deed  is  objected  to,  on  the  ground  that 
when  a  deed  is  executed  by  an  agent  or  attorney,  the  authority  to  do 
so  must  be  an  authority  of  as  high  a  nature,  derived  from  an  instru- 
ment under  the  seal  of  the  grantor.  This  is  a  good  rule  of  law,  but 
it  does  not  apply  to  the  present  case.  The  name  being  written  by 
another  hand,  in  the  presence  of  the  grantor,  and  at  her  request,  is 
her  act.  The  disposing  capacity,  the  act  of  mind,  which  are  the 
essential  and  efficient  ingredients  of  the  deed,  are  hers,  and  she  merely 
uses  the  hand  of  another,  through  incapacity  or  weakness,  instead  of 
her  own,  to  do  the  physical  act  of  making  a  written  sign.  Whereas,  in 
executing  a  deed  by  attorney,  the  disposing  power,  though  delegated, 
is  with  the  attorney,  and  the  deed  takes  effect  from  his  act ;  and  there- 
fore the  power  is  to  be  strictly  examined  and  construed,  and  the 
instrument  conferring  it  is  to  be  proved  by  evidence  of  as  high  a  na- 
ture as  the  deed  itself.  To  hold  otherwise  would  be  to  decide  that  a 
person  having  a  clear  mind  and  full  capacity,  but  through  physical 
inability  incapable  of  making  a  mark,  could  never  make  a  conveyance 
or  execute  a  deed ;  for  the  same  incapacity  to  sign  and  seal  the  prin- 
cipal deed  would  prevent  him  from  executing  a  letter  of  attorney 
under  seal. 

It  appears  to  us  that  the  distinction  between  writing  one's  name 
in  his  presence  and  at  his  request,  and  executing  a  deed  by  attorney, 
is  obvious,  well  founded,  stands  on  satisfactory  reasons,  and  is  well 
sustained  by  authorities.  Ball  v.  Dunsterville,  4  T.  R.  313;  The 
King  V.  Longnor,  1  Nev.  &  M.  576,  s.  c.  4  Barn.  &  Adol.  647; 
2  Greenl.  Ev.  sec.  295.  We  think  the  deed  was  well  executed  by  Polly 
Gwinn ;  and  the  judgment  must  therefore  stand  for  the  demandant. 


STATE  OF  MINNESOTA  v.  YOUNG  and  others. 
23  Minn.  551.     1877. 

Action  against  Young,  as  principal,  and  others,  as  sureties,  upon 
an  official  bond.    When  the  bond  was  executed  by  the  sureties  it  con- 


54  STATE  OF   MINXESOTA  V.   YOUNG  AXD  OTHERS.      fCHAP.   II. 

tained  no  named  sum  as  a  penalty ;  the  snm  was  afterwards  fixed  by  the 
comity  commissioners  and  by  their  direction  the  sum  of  $25,000  was 
inserted  as  the  penalty.  No  one  of  the  sureties  ever  authorized  any 
one  to  insert  a  penal  sum  in  the  instrument,  except  in  so  far  as  such 
authority  was  implied  in  the  signing  of  the  same  on  said  Sunday,  as 
and  for  the  official  bond  of  said  Young,  and  permitting  said  Young  to 
take  the  same  with  him.  The  trial  court  gave  judgment  for  the 
defendants,  and  plaintiff  appeals. 

Mitchell,  J.*  .  .  .  The  defendants  urge  that  the  instrument  in 
question  never  had  any  force  as  against  them;  because:  (1)  When 
signed  and  sealed  by  them  it  did  not  express  any  penal  sum,  and  this 
was  afterwards  inserted  at  the  direction  of  the  board  of  county  com- 
missioners, without  authority;  and  (2)  if  executed  at  all,  it  was 
executed  on  Sunday. 

In  support  of  their  first  proposition,  defendants  insist  that  this 
instrument  being  a  deed  or  instrument  under  seal,  therefore  authority 
to  fill  a  blank  therein  with  material  matter  could  only  be  conferred 
by  an  instrument  of  equal  solemnity  —  that  is  to  say,  one  under  seal. 

Whatever  may  formerly  have  been  the  rule,  or  may  still  be  the 
holding  of  some  courts,  upon  this  question,  we  think  the  better 
opinion,  both  on  principle  and  authority,  is  that  parol  authority  is 
adequate  and  sufficient  to  authorize  an  addition  to,  or  alteration  of, 
even  a  sealed  instrument.  At  the  present  day,  the  distinction  be- 
tween sealed  and  unsealed  instruments  is  arbitrary,  meaningless,  and 
unsustained  by  reason.  The  courts  have,  for  nearly  a  century,  been 
gradually  doing  away  with  the  former  distinctions  between  these 
two  classes  of  instruments,  and  if  they  have  not  yet  wholly  disap- 
peared, it  simply  proves  the  difficulty  of  disturbing  a  rule  established 
by  long  usage,  even  after  the  reason  for  the  rule  has  wholly  ceased  to 
exist.  We  therefore  hold  that  parol  authority  is  sufficient  to  authorize 
the  filling  of  a  blank  in  a  sealed  instrument,  and  that  such  authority 
may  be  given  in  any  way  in  which  it  might  be  given  in  case  of  an 
imsealed  instrument.^  Drury  v.  Foster,  2  Wall.  24;  Inhabitants  of 
South  Berwick  v.  Huntress,  53  Me.  89 ;  Woolley  v.  Constant,  4  John. 
54;  Ex  parte  Kerwin,  8  Cow.  118;  Wiley  v.  Moore,  17  S.  &  R.  438; 
Field  V.  Stagg,  52  Mo.  534;  Vliet  v.  Camp,  13  Wis.  198;  Smith  v. 
Crooker,  5  Mass.  538.  Therefore,  in  our  view,  the  only  question  is 
whether  the  facts,  as  stipulated  in  this  case,  establish  parol  authority 
from  defendants  to  the  board  of  county  commissioners  to  insert  a 
penal  sum  in  the  blank  left  in  this  instrument. 

There  is  no  claim  that  any  express  authority  was  given ;  but  this  is 

*  GiLFiLLAN,  C.  J.,  and  Cornell,  J.,  having  been  of  counsel,  did  not  sit  In  this 
case.  Hon.  Samuel  Lord,  judge  of  the  fifth  district,  and  Hon.  William  Mitchell, 
judge  of  the  third  district,  were  assigned,  by  the  governor,  to  sit  with  Berry,  J.,  as 
judges  of  this  court,  pro  hac  vice,  and  the  case  was  beard  and  determined  by  the 
court  as  thus  constituted. 

■^  Accord :   Crlbben  v.  Deal,  21  Or.  211. 


CHAP.   II.]  FORM   OF   CONTRACT.  55 

not  necessar}'.  Such  authority  may  be  implied  from  circumstances. 
It  may  be  implied  from  the  facts  proved,  when  these  facts,  all  taken 
together  and  fairly  considered,  justify  the  inference.  In  the  case  at 
bar,  we  think  that  all  the  circumstances,  as  they  appeared  to  the 
board  at  the  time  they  received  the  bond,  established  an  apparent 
implied  authority,  from  the  sureties  to  the  board,  to  fill  the  blank  with 
such  penal  sum  as  they  deemed  sufficient  and  proper. 

It  is  stipulated,  as  facts  in  the  case,  that  the  sureties  "  did  know, 
when  they  signed  and  sealed  the  said  instrument,  that  the  same  was 
intended  by  the  said  Young  to  be  used  as  the  official  bond  of  the 
said  Young  for  his  term,  commencing  March  1,  1872;  and  they 
severally  signed  and  sealed  the  same  as  and  for  such  his  official  bond ; 
and,  at  the  time  of  signing  and  sealing  said  instrument,  the  said 
sureties  intended  to  be  bound  that  said  Young,  as  such  treasurer, 
should  perform  the  condition  thereof."  The  instrument  was  fully 
completed,  except  the  insertion  of  the  penal  sum.  It  is  evident  that 
the  sureties  neither  stipulated  nor  expected  that  the  instrument 
would  be  returned  or  afterwards  exhibited  to  them,  before  its  delivery 
for  use.  When  the  bond  was  presented  to  the  board,  they  had  a  right 
to  presume  the  existence  of  the  facts  thus  stipulated.  The  board 
would  also  have  a  right  to  presume  (certainly,  in  the  absence  of 
something  affirmative  to  show  the  contrary)  that  the  signers  knew  the 
contents  of  the  bond  when  they  executed  it ;  also,  that  they  knew  the 
requirements  of  the  law,  to  wit,  that  the  instrument,  to  be  a  com- 
plete bond,  must  contain  a  penal  sum,  and  that  the  amount  thereof 
had  to  be  fixed  by  the  board.  This  was  the  apparent  and  presump- 
tive state  of  facts,  as  they  appeared  to  the  board  when  the  instrument 
was  presented  them  for  their  official  action. 

Now  what  did  these  facts  imply,  and  what  had  the  board  a  right 
to  presume  that  they  implied ?  "Why,  clearly  this :  "  We  (the  sureties) 
have  executed  this  instrument  as  the  official  bond  of  Young.  We 
intend  it  to  be  used  and  delivered  as  such;  but,  inasmuch  as  we  do 
not  know  at  what  amount  you  will  fix  the  penal  sum  which  the  law 
requires  you  to  fix,  we  have  left  this  blank,  which  you  can  fill  with 
such  sum  as  you  may  determine."  We  think  all  the  circumstances, 
fairly  considered,  imply  all  this  almost  as  clearly  as  if  expressed  in 
words.  The  nature  of  the  blank  to  be  filled,  also,  was  calculated  to 
raise  a  presumption  of  implied  authority  to  fill  it.  The  condition  of 
a  bond  is  the  essential  feature  of  it.  The  penal  sum  is,  in  a  certain 
sense,  almost  a  matter  of  form.  In  this  case,  the  sureties  intended 
to  execute  a  bond  to  secure  the  State  from  loss  by  any  default  of 
Young.  This  was  the  whole  substance  of  their  agreement.  No  penal 
sum,  however  large,  could  extend  this  liability.  The  insertion,  there- 
fore, of  a  penal  sum,  operated  simply  to  perfect  the  bond  according 
to  the  original  understanding  of  the  signers,  without  injuriously 
afEecting  them,  or  in  any  maimer  changing  the  contract  from  what 


56  STATE   OP   MINNESOTA   V.   TOUNG   AND   OTHERS.      [CHAP.   II. 

they  intended  it  to  be.  It  was  in  one  sense,  therefore,  wholly 
immaterial  to  them  what  the  penal  sum  should  be.  The  nature  of 
the  blank  itself  was,  therefore,  a  circumstance  or  fact  that  tended  to 
show  an  implied  authority  to  the  board  to  fill  it.  Cases  are  to  be 
found  in  the  books  where  implied  authority  to  fill  blanks  has  been 
held  to  exist,  without  any  evidence  of  assent  on  the  part  of  the 
maker  beyond  the  instrument  itself.  We  think,  therefore,  that  all 
these  facts  and  circumstances  clearly  implied  an  authority  to  the 
board  to  inse^^  a  penal  sum  in  this  blank,  which  authorized  them  to 
act  in  the  matter  by  so  filling  it. 

It  is  urged  by  defendants  that  this  authority  could  not  be  implied, 
because  the  sureties  did  not  in  fact  know  of  the  existence  of  the  blank. 
It  is  undoubtedly  true  that  in  most,  if  not  all,  of  the  cases  cited  it  does 
appear  that  the  parties  signing  the  instrument  actually  knew  of  the 
existence  of  the  blank ;  and  the  knowledge  of  that  fact,  at  the  time  an 
instrument  is  delivered  for  use,  being  a  strong  circumstance  tending 
to  establish  an  implied  authority  to  the  other  party  to  fill  the  blank, 
it  is  undoubtedly  true  that  the  courts  have,  in  such  cases,  put  great 
stress  upon  this  circumstance.  But  we  find  no  case  expressly  holding 
that  actual  knowledge  of  the  existence  of  the  blank  is  indispensable, 
and  without  which  authority  can  never  be  implied.  The  correct  rule 
seems  to  be  that  this  authority  will  be  implied  whenever  it  is  fairly 
and  legally  inferable  from  all  the  circumstances  of  the  particular  case 
under  consideration.  Moreover,  in  this  case,  as  we  have  already  said, 
the  board  had  a  right  to  presume  that  the  sureties  knew  of  the  exist- 
ence of  this  blank,  and,  in  view  of  this  and  all  the  other  circumstances 
of  the  case,  there  was  an  apparent  implied  authority  to  the  board,  upon 
which  they  had  a  right  to  act;  and,  having  thus  acted,  the  sureties 
cannot  now  be  heard  to  say  that  they  did  not  know  of  the  existence  of 
the  blank.  In  other  words,  they  are  now  estopped  from  denying  the 
existence  of  the  apparent  and  presumptive  state  of  facts  which  they, 
by  their  conduct,  have  authorized  the  board  to  believe  and  act  upon ; 
and  now  the  apparent  authority  with  which  they  clothed  the  board 
must  be  held  to  be  the  real  authority. 

As  to  when  authority  to  fill  blanks  in  written  instruments  will  be 
implied  from  circumstances,  see  Inhabitants  of  South  Berwick  v. 
Huntress,  53  Me.  89 ;  Hunt  v.  Adams,  6  Mass.  519.  .  .  . 

Judgment  reversed. 


OHAP.   III.]  ACT  IN   BEHALF   OF   EXISTING   PERSON.  5^ 


CHAPTER   III. 

Formation  of  the  Relation  by  Ratification. 

1.  Act  must  he  Performed  in  Behalf  of  Existing  Person, 

In  Ee  NOETHUMBERLAND  AVENUE  HOTEL 
COMPANY. 

33  Ch.  D.  (C.  A.)  16.     1886. 

Application  by  Sully,  as  trustee  of  Wallis,  to  be  admitted  as  a 
creditor  in  the  winding  up  of  the  hotel  company.  Application  denied. 
Applicant  appeals. 

Wallis  leased  grounds  to  one  Doyle,  "  as  trustee  for  and  on  behalf 
of  an  intended  company,  to  be  called  the  Northumberland  Avenue 
Hotel  Company."  The  company  was  incorporated,  accepted  Doyle'a 
contract,  took  possession  of  the  premises,  and  paid  rent  to  Wallis. 
This  proceeding  is  for  damages  for  breach  of  the  contract  entered  into 
between  Wallis  and  Doyle. 

Cotton,  L.  J.  This  is  an  appeal  from  a  decision  of  Mr.  Justice 
Chitty  in  what,  although  in  form  it  was  a  summons  from  chambers  in 
a  winding-up,  was  in  substance  an  action  for  damages  for  breach  of 
an  agreement  alleged  to  have  been  entered  into  between  Mr.  Wallis^ 
whom  the  claimant  represents,  and  the  company.  The  first  thing,, 
therefore,  that  we  have  to  see  is  whether  in  fact  there  was  any  contract 
between  them.  I  am  not  referring  to  the  question  whether  a  contract 
was  made  which,  in  consequence  of  the  provisions  of  some  Act  of  Par- 
liament, was  incapable  of  being  enforced,  but  to  the  question  whether 
in  fact  there  was  any  agreement  between  these  two  parties. 

The  company  was  incorporated  on  the  25th  of  July,  1882,  and  be- 
fore that  date,  viz.,  on  the  24th  of  July,  a  contract  in  writing  was 
entered  into  between  a  gentleman  acting  as  agent  for  and  on  behalf  of 
Mr.  Wallis,  and  another  gentleman,  who  described  himself  as  a  trustee 
for  the  company,  the  company,  in  fact,  having  no  existence  at  the 
time.  That  was  a  contract  which  was  binding  as  between  Mr.  Wallis 
and  the  other  gentleman  whom  I  have  mentioned,  and  was  a  contract 
which  provided  that  certain  things  should  be  done  by  the  company. 
That  contract  in  no  way  bound  the  company,  because  the  company  at 
that  time  was  not  formed.  In  fact  it  was  not  in  terms  a  contract  with 
the  company,  although  it  was  a  contract  by  a  person  who  purported 
to  act  for  the  company  that  certain  things  should  be  done  by  the  com- 
pany.   It  is  not  contended  that  this  contract  was  in  any  way  binding 


68  IN   RE   XORTHUMBERLAND  AVE.    HOTEL   COMPANY.      [CHAP.   III. 

on  the  company,  nor  is  it  disputed  that  the  company  after  it  was 
formed  could  not  ratify  the  authority  of  the  gentleman  who  purported 
to  act  as  their  trustee  before  they  were  incorporated,  and  who  there- 
fore could  not  have  any  authority  to  do  so. 

But  it  is  said  that  we  ought  to  hold  that  there  was  a  contract  entered 
into  between  the  company  and  Wallis  on  the  same  terms  (except  so 
far  as  they  were  subsequently  modified)  as  those  contained  in  the 
contract  of  the  24th  of  July,  1882.  In  my  opinion  that  will  not  hold. 
It  is  very  true  that  there  were  transactions  between  Wallis  and  the 
company,  in  which  the  company  acted  on  the  terms  of  that  contract 
entered  into  with  Wallis  by  the  person  who  said  he  was  trustee  for 
them.  But  why  did  the  company  do  so?  The  company  seem  to  have 
considered,  or  rather  its  directors  seem  to  have  considered,  that  the 
contract  was  a  contract  binding  on  the  company.  But  the  erroneous 
opinion  that  a  contract  entered  into  before  the  company  came  into 
existence  was  binding  on  the  company,  and  the  acting  on  that  errone- 
ous opinion,  does  not  make  a  good  contract  between  the  company  and 
Mr.  Wallis;  and  all  the  acts  which  occurred  subsequently  to  the 
existence  of  the  company  were  acts  proceeding  on  the  erroneous 
assumption  that  the  contract  of  the  24th  of  July  was  binding  on  the 
company.  In  my  opinion  that  explains  the  whole  of  these  transac- 
tions. The  case  is  entirely  different  from  those  cases  which  have  been 
referred  to  where  the  court,  finding  a  person  in  possession  of  land  of 
a  corporation,  and  paying  rent,  has  held  that  there  was  a  contract  of 
tenancy.  There  was  no  mode  of  explaining  why  the  occupier  was 
there,  except  a  tenancy,  unless  he  was  to  be  treated  as  a  trespasser. 
The  receipt  of  rent  by  the  corporation  negatived  his  being  a  tres- 
passer, and  it  was  therefore  held  that  there  was  a  tenancy.  Here  we 
can  account,  and  in  my  opinion  we  ought  to  account,  for  the  posses- 
sion by  the  company,  and  for  what  it  has  done,  by  reference  to  the 
agreement  of  the  24th  of  July,  which  the  directors  erroneously  and 
wrongly  assumed  to  be  binding  upon  them.  We  are  not  therefore 
authorized  to  infer  a  contract  as  it  was  inferred  in  those  cases  where 
there  was  no  other  explanation  of  the  conduct  of  the  parties. 

In  my  opinion  the  decision  of  Mr.  Justice  Chitty  was  right,  and 
the  appeal  must  therefore  fail. 

LiNDLEY,  L.  J.  I  am  of  the  same  opinion.  The  more  closely  the 
case  is  investigated,  the  more  plainly  does  it  appear  that  there  never 
was  any  contract  between  the  company  and  Wallis.  The  more  closely 
the  facts  are  looked  into,  the  more  plain  is  it  that  everything  which 
the  company  did,  from  the  taking  possession  down  to  the  very  last 
moment,  was  referable  to  the  agreement  of  the  24th  of  July,  1882, 
which  the  directors  erroneously  supposed  to  be  binding  on  the  com- 
pany. I  therefore  cannot  come  to  any  other  conclusion  than  the  con- 
clusion at  which  Mr.  Justice  Chitty  arrived. 

Lopes,  L.  J.    I  am  entirely  of  the  same  opinion. 


CHAP.   III.]  ACT   IN   BEHALF   OF   EXISTING   PERSON.  5!) 

The  question  is  whether  there  was  a  contract  between  "Wallis  and 
the  company.  There  no  doubt  was  an  agreement  between  a  man 
called  Nunneley,  who  was  agent  for  Wallis,  and  a  man  named  Doyle, 
who  described  himself  as  trustee  for  the  company.  But  at  that  time 
the  company  was  not  incorporated,  and  therefore  it  is  perfectly  clear 
that  the  agreement  was  inoperative  as  against  the  company.  It  is  also 
equally  clear  that  the  company,  after  it  came  into  existence,  could  not 
ratify  that  contract,  because  the  company  was  not  in  existence  at  the 
time  the  contract  was  made.  No  doubt  the  company,  after  it  came 
into  existence,  might  have  entered  into  a  new  contract  upon  the  same 
terihs  as  the  agreement  of  the  24th  of  July,  1882 ;  and  we  are  asked 
to  infer  such  a  contract  from  the  conduct  and  transactions  of  the  com- 
pany after  they  came  into  existence.  It  seems  to  me  impossible  to 
infer  such  a  contract,  for  it  is  clear  to  my  mind  that  the  company 
never  intended  to  make  any  new  contract,  because  they  firmly  believed 
that  the  contract  of  the  24th  of  July  was  in  existence,  and  was  a  bind- 
ing, valid  contract.  Everything  that  was  done  by  them  after  their 
incorporation  appears  to  me  to  be  based  upon  the  assumption  that  the 
contract  of  the  24th  of  July,  1882,  was  an  existing  and  binding  con- 
tract.   I  think,  therefore,  that  the  appeal  ought  to  be  dismissed. 


McAETHUR   v.    TIMES    PRINTING   CO. 

48  Minn.  319.     1892. 

Action  for  damages  for  breach  of  contract.  Verdict  for  plaintiff. 
Motion  for  new  trial  denied.    Defendant  appeals. 

Mitchell,  J.  The  complaint  alleges  that  about  October  1,  1889, 
the  defendant  contracted  with  plaintiff  for  his  services  as  advertising 
solicitor  for  one  year ;  that  in  April,  1890,  it  discharged  him,  in  vio- 
lation of  the  contract.  The  action  is  to  recover  damages  for  the 
breach  of  the  contract.  The  answer  sets  up  two  defences:  (1)  That 
plaintiff's  employment  was  not  for  any  stated  time,  but  only  from 
week  to  week;  (2)  that  he  was  discharged  for  good  cause.  Upon  the 
trial  there  was  evidence  reasonably  tending  to  prove  that  in  Septem- 
ber, 1889,  one  C.  A.  Nimocks  and  others  were  engaged  as  promoters 
in  procuring  the  organization  of  the  defendant  company  to  publish 
a  newspaper;  that,  about  September  12th,  Nimocks,  as  such  promoter, 
made  a  contract  with  plaintiff,  in  behalf  of  the  contemplated  com- 
pany, for  his  services  as  advertising  solicitor  for  the  period  of  one 
year  from  and  after  October  1st,  —  the  date  at  which  it  was  expected 
that  the  company  would  be  organized;  that  the  corporation  was  not, 
in  fact,  organized  until  October  16th,  but  that  the  publication  of  the 
paper  was  commenced  by  the  promoters  October  1st,  at  which  date 


60  MCABTHDR   V.   TIMES   PRINTING   CO.  [CHAP.    III. 

plaintiff,  in  pursuance  of  his  arrangement  with  Nimocks,  entered  upon 
the  discharge  of  his  duties  as  advertising  solicitor  for  the  paper ;  that 
after  the  organization  of  the  company  he  continued  in  its  employment 
in  the  same  capacity  until  discharged,  the  following  April;  that 
defendant's  board  of  directors  never  took  any  formal  action  with 
reference  to  the  contract  made  in  its  behalf  by  Nimocks,  but  all  of 
the  stockholders,  directors,  and  oflBcers  of  the  corporation  knew  of  this 
contract  at  the  time  of  its  organization,  or  were  informed  of  it  soon 
afterwards,  and  none  of  them  objected  to  or  repudiated  it,  but,  on  the 
contrary,  retained  plaintiff  in  the  employment  of  the  company  with- 
out any  other  or  new  contract  as  to  his  services. 

There  is  a  line  of  cases  which  hold  that  where  a  contract  is  made  in 
behalf  of,  and  for  the  benefit  of,  a  projected  corporation,  the  corpora- 
tion after  its  organization,  cannot  become  a  party  to  the  contract, 
either  by  adoption  or  ratification  of  it.  Abbott  v.  Hapgood,  150  Mass. 
248  (23  N.  E.  Eep.  907)  ;  Beach,  Corp.  §  198.  This,  however,  seems 
to  be  more  a  question  of  name  than  of  substance ;  that  is,  whether  the 
liability  of  the  corporation,  in  such  cases,  is  to  be  placed  on  the 
grounds  of  its  adoption  of  the  contract  of  its  promoters,  or  upon  some 
other  ground,  such  as  equitable  estoppel.  This  court,  in  accordance 
with  what  we  deem  sound  reason,  as  well  as  the  weight  of  authority, 
has  held  that,  while  a  corporation  is  not  bound  by  engagements  made 
on  its  behalf  by  its  promoters  before  its  organization,  it  may,  after  its 
organization,  make  such  engagements  its  own  contracts.  And  this  it 
may  do  precisely  as  it  might  make  similar  original  contracts ;  formal 
action  of  its  board  of  directors  being  necessary  only  where  it  would  be 
necessary  in  the  case  of  a  similar  original  contract.  That  it  is  not 
requisite  that  such  adoption  or  acceptance  be  expressed,  but  it  may  be 
inferred  from  acts  or  acquiescence  on  the  part  of  the  corporation,  or  its 
authorized  agents,  as  any  similar  original  contract  might  be  shown. 
Battelle  v.  Northwestern  Cement  &  Concrete  Pavement  Co.,  37  Minn. 
89  (33  N.  W.  Eep.  327) ;  see,  also,  Mor.  Corp.  §  548.  The  right  of 
the  corporate  agents  to  adopt  an  agreement  originally  made  by  pro- 
moters depends  upon  the  purposes  of  the  corporation  and  the  nature 
of  the  agreement.  Of  course,  the  agreement  must  be  one  which  the 
corporation  itself  could  make,  and  one  which  the  usual  agents  of  the 
company  have  express  or  implied  authority  to  make.  That  the  con- 
tract in  this  case  was  of  that  kind  is  very  clear;  and  the  acts  and 
acquiescence  of  the  corporate  officers,  after  the  organization  of  the 
company,  fully  justified  the  jury  in  finding  that  it  had  adopted  it  as 
its  own. 

The  defendant,  however,  claims  that  the  contract  was  void  under 
the  Statute  of  Frauds  because,  "by  its  terms,  not  to  be  performed 
within  one  year  from  the  making  thereof,"  which  counsel  assumes  to 
be  September  12th,  —  the  date  of  the  agreement  between  plaintiff  and 
the  promoter.    This  proceeds  upon  the  erroneous  theory  that  the  act 


CHAP.    III.]  ACT   IN   BEHALF   OF    EXISTING    PERSON.  61 

of  the  corporation,  in  such  cases,  is  a  ratification  which  relates  back 
to  the  date  of  the  contract  with  the  promoter,  under  the  familiar 
maxim  that  "  a  subsequent  ratification  has  a  retroactive  effect,  and 
is  equivalent  to  a  prior  command."  But  the  liability  of  the  corpora- 
tion, under  such  circumstances,  does  not  rest  upon  any  principle  of 
the  law  of  agency,  but  upon  the  immediate  and  voluntary  act  of  the 
company.  Although  the  acts  of  a  corporation  with  reference  to  the 
contracts  made  by  promoters  in  its  behalf  before  its  organization  are 
frequently  loosely  termed  "  ratification,"  yet  a  "  ratification,"  properly 
so  called,  implies  an  existing  person,  on  whose  behalf  the  contract 
might  have  been  made  at  the  time.  There  cannot,  in  law,  be  a  rati- 
fication of  a  contract  which  could  not  have  been  made  binding  on  the 
ratifier  at  the  time  it  was  made,  because  the  ratifier  was  not  then  in 
existence.  In  re  Empress  Engineering  Co.,  16  Ch.  Div.  128;  Mel- 
hado  V.  Porto  Alegre,  N.  H.  &  B.  Ey.  Co.,  L.  R.  9  C.  P.  505 ;  Kelner 
V.  Baxter,  L.  R.  2  C.  P.  185.  What  is  called  "  adoption,"  in  such 
cases,  is,  in  legal  effect,  the  making  of  a  contract  of  the  date  of  the 
adoption,  and  not  as  of  some  former  date.  The  contract  in  this  case 
was,  therefore,  not  within  the  Statute  of  Frauds.  The  trial  court 
fairly  submitted  to  the  jury  all  the  issues  of  fact  in  this  case, 
accompanied  by  instructions  as  to  the  law  which  were  exactly  in 
the  line  of  the  views  we  have  expressed;  and  the  evidence  justified 
the  verdict. 

The  point  is  made  that  plaintiff  should  have  alleged  that  the 
contract  was  made  with  Nimocks,  and  subsequently  adopted  by  the 
defendant.  If  we  are  correct  in  what  we  have  said  as  to  the  legal 
effect  of  the  adoption  by  the  corporation  of  a  contract  made  by  a  pro- 
moter in  its  behalf  before  its  organization,  the  plaintiff  properly 
pleaded  the  contract  as  having  been  made  with  the  defendant.  But 
we  do  not  find  that  the  evidence  was  objected  to  on  the  ground  of 
variance  between  it  and  the  complaint.  The  assignments  of  error  are 
very  numerous,  but  what  has  been  already  said  covers  all  that  are 
entitled  to  any  special  notice. 

Order  affirmed.^ 

'  "  In  England  it  has  been  held  In  the  more  recent  cases  that,  in  the  absence  of  a 
charter  or  statutory  provision,  a  contract  made  by  the  promoters  of  a  corporation 
on  its  behalf  before  incorporation  is  a  nullity,  and  that  the  corporation  cannot 
ratify  or  adopt  it  and  thus  make  it  hindinj?  upon  it  after  incorporation,  although  an 
action  guasi  ex  contractu  may  be  maintained  against  it  if  it  accepts  the  benefit  of 
such  a  contract.  Kelner  v.  Baxter,  L.  R.  2  C.  P.  174  ;  Melhado  v.  Porto  Alegre,  New 
Hambourgh  &  B.  Ry.  Co.,  L.  B.  9  C.  P.  503  :  In  re  Empress  Engineering  Co.,  16  Ch. 
Div.  125 ;  In  re  Northumberland  Ave.  Hotel  Co.,  33  Ch.  Div.  16 ;  1  Clark  &  Marshall, 
Private  Corporations,  306. 

"  A  similar  view  has  been  taken  by  the  Supreme  Court  of  Massachusetts.  Abbott 
€t  al.  V.  Hapgood  et  al.,  150  Mass.  248  :  Holyoke  Envelope  Co.  v.  U.  S.  Envelope  Co., 
182  Mass.  171  ;  Bradford  v.  Metcalf.  185  Mass.  205. 

"A  more  liberal  view  is  taken  by  the  courts  in  other  States  which  hold  generally 
that  a  contract  made  by  the  promoters  of  a  corporation  on  its  behalf  may  be  ratified 
or  adopted  by  the  corporation  when  organized,  and  that  the  corporation  is  then 
liable  both  at  law  and  in  equity  on  the  contract  itself  and  not  merely  for  the  benefits 
received.  Stanton  v.  N.  Y.,  etc.,  Ry.  Co..  5ft  Conn.  272  ;  Smith  v.  Parker,  148  Ind. 
127 ;  Grape  Sugar  &  Vinegar  Mfg.  Co.  v.  Small,  40  Md.  395 ;  Low  v.  Railroad,  45 


62  WESTERN   PUBL.    HOUSE  V.   DIST.   TP.   OF   ROCK.      [CHAP.    III. 


WESTERN   PUBLISHING   HOUSE   v.   DISTEICT 
TOWNSHIP    OF   EOCK. 

84  Iowa,  101.     1891. 

Action  upon  contract  for  purchase  of  books.  Demurrer  sustained. 
Plaintiff  appeals. 

The  petition  set  up  that  certain  members  of  the  board  of  directors 
of  the  defendant  district  signed  a  contract  to  purchase  tKe  books  in 
question;  that  later  the  board  of  directors  formally  ratified  the  pur- 
chase; that  later  still  the  board  of  directors  repealed  the  resolution 
ratifying  the  purchase. 

Beck,  C.  J.  (after  setting  out  the  petition)'.  A  consideration  of 
the  agreement  upon  which  the  plaintiff  bases  its  right  to  recover,  dis- 
closes the  fact  that  it  does  not  purport  to  be  the  contract  of  the  defend- 
ant, the  school  district,  and  that  there  is  not  one  word  in  it  indicating 
the  purpose  of  the  directors  to  bind  the  district,  or  the  intention  of  the 
plaintiff  to  require  it  to  be  bound  by  the  agreement.  The  obligors  in 
the  instrument  describe  themselves  as  directors  of  the  school  district ; 
but  it  does  not  appear  that  the  goods  sold  were  bought  for  the  use  of 
the  defendant,  or  pursuant  to  its  authority  or  order.  It  is  stipulated 
in  the  contract  that  the  goods  shall  be  shipped  to  the  directors,  not  to 
the  defendant  or  its  officers.  On  the  face  of  the  instrument,  it  is 
plainly  shown  that  the  persons  who  signed  the  instrument,  and  who 
are  designated  therein  as  "  directors,"  are  alone  bound  by  it  as  obli- 
gors. The  plaintiff  agrees  in  the  instrument  to  accept  in  payment  an 
order  or  warrant  issued  by  the  defendant;  but  this  stipulation  does 
not  bind  it  to  look  to  the  defendant  for  payment,  or  make  the  instru- 
ment its  contract.    Upon  the  face  of  the  instrument  the  defendant  is 

N.  H.  370 ;  Bell's  Gap  Ry.  Co.  v.  Christy,  79  Pa.  54 ;  Bufflngton  v.  Bardon  et  al.,  80 
Wis.  635  ;  Whitney  v.  Wyman,  101  JJ.  S.  392. 

"  The  American  courts,  however,  insist  in  every  instance  on  an  express  resolution 
or  some  other  act  by  the  corporation  subsequent  to  organization  showing  an  Intent 
to  be  bound.     Ireland  v.  Globe  Milling  &  Reduction  Co.,  20  R.  I.  190. 

"  Consequently  it  is  held  that  a  corporation  is  not  liable.  In  the  absence  of  ratifi- 
cation or  adoption  or  of  a  charter  or  statutory  provision  imposing  liability,  for  the 
salary  of  a  superintendent  or  other  person  for  services  performed  for  it  before  its 
organization  under  a  contract  made  by  its  promoters,  although  the  contract  may 
have  been  made  on  its  behalf  and  with  the  understanding  that  it  should  be  bound, 
and  although  the  promoters  who  made  it  have  become  its  stoclcholders  and  officers. 
Western  Screw  &  Mfg.  Co.  v.  Cousley,  72  111.  531  ;  Little  Rock  &  Ft.  Smith  R.  Co.  v. 
Perry,  37  Ark.  164  ;  Carey  v.  Des  Moines  Co.-Op.  Coal  &  Mln.  Co.  81  Iowa,  674  ;  1 
Clark  &  Marshal],  Private  Corporations,  304. 

"  Nor  is  it  bound  by  an  agreement  by  its  promoters  that  a  person  shall  be  em- 
ployed by  it  at  a  certain  salary  when  it  shall  be  organized. 

"  In  the  case  of  Oakes  v.  Cattaraugus  Water  Co.,  143  N.  Y.  430,  it  was  held  by  a 
divided  court  that,  while  such  a  contract  was  not  binding  upon  the  corporation  at 
Its  inception,  yet  it  might  be  ratified  by  the  president  on  behalf  of  the  corporation 
when  it  attained  a  legal  existence :  and  that,  there  being  evidence  that  the  services 
were  performed  at  the  request  of  the  president,  who  was  also  the  chief  promoter  of 
the  corporation,  and  that  he  acknowledged  the  indebtedness  and  promised  to  pay  it, 
there  were  under  the  circumstances  questions  of  fact  for  the  jury."  Peabody.  J.,  in 
Tuttle  V.  Tuttle  Co.  (1906),  64  Atl.  (Me.)  496,  498. 


CHAP.   III.]  ACT  IN   BEHALF   OF   EXISTING   PERSON.  63 

not  bound,  and  the  intention  clearly  appears  to  bind  the  signers  indi- 
vidually. The  petition  does  not  allege  or  show  that  the  defendant  is 
bound  by  the  contract,  or  was  intended  by  the  parties  to  be  bound.  It 
specifically  alleges  that  the  "members  [of  the  board  of  directors] 
agree  to  pay  for  the  books."  It  alleges  that  the  books  were  "  ordered 
by  said  members  of  said  board  of  directors  for  the  use  and  benefit  of 
defendant  in  its  schools."  It  is  not  alleged  that  the  contract  was  made 
pursuant  to  any  prior  order,  request,  or  authority  of  the  defendant; 
and  it  is  averred  that  the  books  "  are  now  "  in  the  express  office,  thus 
showing  and  averring,  negatively,  that  the  goods  have  never  come  into 
possession  of  the  defendant,  and  have  never  been  used  in  its  schools. 

The  plaintiff,  while  inferentially  conceding  that  the  contract  was 
made  without  authority,  insists  that  it  was  afterwards  ratified.  But 
as  the  contract  did  not  purport  to  bind  the  defendant,  it  could  not 
ratify  it.  There  is  no  such  thing  as  the  ratification  of  a  contract  by 
an  obligor  made  by  another,  when  it  does  not  purport  to  bind  him,. 
but  binds  the  other.  In  such  a  case  the  obligor  cannot  become  bound 
by  a  ratification.  He  can  only  become  bound  by  a  new  contract 
assuming  or  adopting  the  obligation  of  the  prior  one.  If  it  be  assumed 
that  the  defendant  did  adopt  the  contract  (which  is  not  alleged  in  the 
petition)  it  must  appear  what  the  terms  of  the  contract  adopting  it 
are,  and  that  they  have  been  performed.  But  no  such  showing  is 
made  in  the  petition. 

If  the  action  of  the  board  of  directors  of  March  11th  be  regarded 
'  as  the  adoption  of  the  individual  contract  of  the  directors,  it  does  not 
appear  that  the  plaintiff  assented  to  or  accepted  it  at  any  time.  Nor 
is  it  shown  that  the  defendant  acquired  the  right  under  such  adop- 
tion, by  the  assent  of  the  plaintiff,  to  take  the  property.  It  is  not 
shown  that  the  plaintiff  in  any  way  accepted  such  adoption  of  the 
contract  so  as  to  bind  the  defendant.  Until  that  was  done,  it  could 
withdraw  its  adoption  of  the  contract,  which  it  did  do  by  the  resolu- 
tion and  action  of  its  board  of  directors  in  their  meeting  of  March  18, 
1889. 

We  reach  the  conclusion  that  the  contract  was  not  intended  to  bind 
the  defendant,  and  therefore  was  not  ratified  by  it,  and  that,  if  the 
act  claimed  to  be  a  ratification  may  be  regarded  as  a  contract  of  adop- 
tion, it  was  rescinded  before  it  was  accepted,  and  before  the  plaintiff 
acquired  thereby  any  rights  by  reason  of  such  adoption.  These  con- 
siderations lead  us  to  the  conclusion  that  the  judgment  of  the  district 
court  ought  to  be  Affirmed. 


64  KEIGHLEY,   MAXSTED  &   CO.   V.   DURANT:         [cHAP.   III. 

KEIGHLEY,  MAXSTED   &    CO.   v.    DURANT. 

[1901]  A.  C.  240  (H.  L.). 

Egberts,  a  corn  merchant  at  Wakefield,  was  authorized  by  Keigh- 
ley,  Maxsted  &  Co.,  the  appellants,  to  buy  wheat  on  a  joint  account 
for  himself  and  them  at  a  certain  price.  Having  failed  to  buy  at  the 
authorized  price,  Eoberts,  on  May  11,  1898,  without  authority  from 
the  appellants,  made  a  contract  by  telegram  with  the  respondent 
Durant,  a  corn  merchant  in  London,  to  buy  from  him  wheat  at  a 
higher  price.  Eoberts  made  the  contract  in  his  own  name,  but,  as  he 
afterwards  said  at  the  trial,  intending  it  to  be  on  a  joint  account  for 
the  appellants,  Keighley,  Maxsted  &  Co.,  and  himself.  That  inten- 
tion was  not  disclosed  by  Eoberts  to  Durant.  The  next  day  the  appel- 
lants, by  their  manager  Wright,  agreed  with  Eoberts  to  take  the  wheat 
■on  a  joint  account  with  him.  Eoberts  and  appellants  having  failed  to 
take  deliver}^  of  the  wheat,  Durant  resold  it  at  a  loss  and  sued  them 
for  the  amount  in  an  action  tried  before  Day,  J.,  and  a  special  jury. 
At  the  close  of  the  plaintiff's  case,  the  jury  having  been  discharged, 
Day,  J.,  dismissed  the  action  against  the  appellants  on  the  ground 
that  there  was  no  ratification  in  law  of  the  contract,  and  gave  judg- 
ment against  Eoberts  for  the  amount  claimed.  The  Court  of  Appeal 
(Collins  and  Eomer,  L.  JJ.,  A.  L.  Smith,  M.E.,  then  L.  J.,  dissent- 
ing) reversed  the  decision  as  regards  the  appellants,  and  ordered  a 
new  trial  on  the  ground  that  there  was  evidence  for  the  jury  that 
Roberts  contracted  on  behalf  of  himself  and  the  appellants. 

[The  question  of  law,  therefore,  is,  whether  a  contract  made  by  a 
man  purporting  and  professing  to  act  on  his  own  behalf  alone,  and 
not  on  behalf  of  a  principal,  but  having  an  undisclosed  intention  to 
give  the  benefit  of  the  contract  to  a  third  party,  can  be  ratified  by  that 
third  party,  so  as  to  render  him  able  to  sue  or  liable  to  be  sued  on  the 
contract.  In  the  course  of  his  judgment  Collins,  L.  J.,  says  that  the 
point  has  never  been  actually  decided,  though  he  admits  there  are 
numerous  dicta  upon  it  which  have  become  the  foundation  of  state- 
ments in  text-books  more  or  less  adverse  to  the  present  respondent's 
contention,  and  he  says  that  the  question  must  now  be  determined  on 
principle.    Lord  Davey,  p.  253.] 

Earl  of  Halsbury,  L.  C.  My  Lords,  there  are  here  no  facts  really 
in  dispute  in  this  case.  Eoberts  made  a  contract  on  his  own  behalf, 
and  without  the  authority  of  anybody  else.  The  contract  was  made 
and  the  parties  to  it  ascertained,  and  I  am  of  opinion  that  upon  no 
principle  known  to  the  law  could  the  present  appellants  be  made 
parties  to  that  contract.  They  could,  of  course,  make  another  con- 
tract in  the  same  terms  if  they  pleased,  but  it  would  not  be  this  con- 
tract.    It  is  suggested  by  the  judgment  of  the  Court  of  Appeal  as 


CHAP.   III.]  ACT  IN   BEHALF  OF   EXISTING   PERSON.  65 

possible,  that  what  is  described  as  ratification  might,  if  the  parties 
had  so  pleased,  make  the  contract,  which  was  one  made  between  A. 
and  B.,  to  include  C.  as  one  of  the  contracting  parties.  I  think  such 
a  suggestion  is  contrary  to  all  principle,  and  for  it  there  is  no  decision 
which  calls  for  your  Lordships  to  override  it,  though  I  confess  I 
should  have  no  hesitation  in  doing  so  if  there  were.  The  parties  to 
the  contract,  who  have  already  bound  themselves  by  it,  are  just  as 
much  part  of  the  contract  as  any  other  part  of  the  contractual  obliga- 
tions entered  into. 

I  confess  I  do  not  see  the  relevancy  of  the  argument  that  a  contract 
might  be  made  in  the  name  of  an  unknown  principal,  and  that  such 
a  principal  may  sue  and  be  sued,  though  the  name  was  not  given  at 
the  time  the  contract  was  made.  The  fact  is  that  in  such  a  case  the 
contract  is  made  by  him,  and  the  disclosure  afterwards  does  not  alter 
or  affect  the  contract  actually  made.  Here  it  would  alter  the  contract 
afterwards  and  make  it  a  different  contract.  If  it  is  said  it  is  an 
anomaly,  it  certainly  is  not  the  only  one  in  our  law,  and  if  it  were 
sought  to  make  our  laws  harmonious  by  deciding  that  any  proposition 
which  our  laws  establish  involves  as  a  necessary  consequence  the  estab- 
lishment of  everything  that  is  analogous  to  it,  the  result  would  be 
very  perplexing  indeed.  I  agree  with  the  Master  of  the  Eolls  that  a 
long  line  of  authorities  has  decided  the  question  in  favor  of  the  view 
which  he  maintains. 

My  lords,  I  should  say  no  more  but  for  Collins,  L.  J.'s  appeal  to  the 
Roman  law,  and,  with  great  respect  for  anything  that  falls  from  the 
Lord  Justice,  I  cannot  think  that  if  the  law  were  as  there  laid  down 
it  would  help  the  present  respondents.  I  do  not  think  the  passage  in 
the  Digest  upon  which  he  founds  his  argument  refers  to  what  we  call 
ratification  at  all ;  but  I  wish  to  add  that,  if  it  could  be  clearly  made 
out  that  it  did  so,  I  should  not  be  much  impressed  by  it.  There  are 
parts  of  the  Eoman  law  which  undoubtedly  we  have  made  part  of  our 
own  law,  and  they  are  binding  on  us,  not  because  they  are  part  of  the 
Roman  law,  but  because  they  have  become  part  of  our  law.  There  are 
some  countries  which  have  made  the  Roman  law  their  own,  but  in  this 
country  we  have  never  adopted  it  in  such  a  wholesale  fashion.  Hale, 
C.  J.,  said  the  sources  of  the  English  law  are  as  undiscoverable  as  the 
sources  of  the  Nile,  and  although  in  our  day  such  a  phrase  cannot  be 
appropriately  used,  it  was  true  in  Hale's  time.  Our  law  differs  in 
most  important  respects  from  the  Roman  law,  and  to  quote  the  latter 
as  an  authority  we  must  show  that  it  has  become  part  of  our  own 
jurisprudence. 

I  move  your  Lordships  that  the  judgment  appealed  from  be  re- 
versed, and  that  the  respondents  do  pay  to  the  appellants  the  costs 
both  here  and  below. 

Lord  Shand.  .  .  .  The  question  which  arises  on  this  state  of  the 
facts  is  whether,  where  a  person  who  has  avowedly  made  a  contract 

6 


66  KEIGHLEY,    MAXSTED   &    CO.    V.   DURANT,  [CHAP.    III. 

for  himself  (1)  without  a  suggestion  that  he  is  acting  to  any  extent 
for  another  (an  undisclosed  principal),  and  (2)  without  any  author- 
ity to  act  for  another,  can  effectually  bind  a  third  party  as  principal, 
or  as  joint  obligant  with  himself,  to  the  person  with  whom  he  con- 
tracted, by  the  fact  that  in  his  own  mind  merely  he  made  a  contract 
in  the  hope  and  expectation  that  his  contract  would  be  ratified  or 
shared  by  the  person  as  to  whom  he  entertained  that  hope  and  expec- 
tation. I  am  clearly  of  opinion,  with  all  respect  to  the  majority  of 
the  Court  of  Appeal,  that  he  cannot.  The  only  contract  actually  made 
is  by  the  person  himself  and  for  himself,  and  it  seems  to  me  to  be 
conclusive  against  the  argument  for  the  respondents,  that  if  their 
reasoning  were  sound  it  would  be  in  his  power,  on  an  averment  of 
what  was  passing  in  his  own  mind,  to  make  the  contract  afterwards 
either  one  for  himself  only,  as  in  fact  it  was,  or  one  affecting  or  bind- 
ing on  another  as  a  contracting  party,  even  although  he  had  no  author- 
ity for  this.  The  result  would  be  to  give  one  of  two  contracting  parties 
in  his  option,  merely  from  what  was  passing  in  his  own  mind  and 
not  disclosed,  the  power  of  saying  the  contract  was  his  alone,  or  a 
contract  in  which  others  were  bound  with  him.  That,  I  think,  he 
certainly  cannot  do  in  any  case  where  he  had  no  authority,  when  he 
made  the  contract,  to  bind  any  one  but  himself.  .  .  . 

Lord  Brampton  (after  stating  the  facts).  My  Lords,  it  was  not 
suggested  that  in  any  of  the  several  telegrams  in  which  the  contract 
was  contained,  or  in  any  other  way,  Durant  was  made  aware,  or  that 
Eoberts  ever  hinted  to  him,  that  in  making  it  he  was  acting  by  the 
authority,  or  on  behalf,  of  an  undisclosed  principal.  Had  he  so  made 
it  —  though  at  that  time  no  authority  from  Keighleys  was  then  in 
existence  —  Keighleys  might  have  ratified  and  adopted  it,  and  having 
done  so  both  they  and  Durant  would  have  been  as  responsible  upon  it, 
each  to  the  other,  as  if  Keighleys  had  been  a  party  to  it  from  the  be- 
ginning; but  as  this  contract  was  clearly  not  so  made,  but  was  a 
simple  written  contract  between  Durant,  the  vendor,  and  Roberts, 
acting  apparently  for  himself  only,  as  vendee,  it  could  not  be  so  rati- 
fied by  Keighleys,  for  there  was  no  contract  open  for  them  to  ratify ; 
and  it  could  not  have  been  adopted  by  them,  for  after  a  contract  has 
been  finally  concluded  between  two  persons  it  cannot  be  altered  so  as 
to  make  a  third  person  liable  upon  it.  If  this  is  desired,  it  must  be 
done  through  the  medium  of  a  new  contract. 

But  it  is  said  for  the  plaintiff  that  when  Eoberts  made  his  contract 
he  had  within  his  mind  an  intention,  though  he  never  communicated 
or  disclosed  it  to  anybody,  to  make  it  on  the  joint  account  of 
Keighleys  and  himself,  and  that  such  secret  intention  was  quite  suffi- 
cient to  empower  Keighleys  to  ratify  or  adopt  it.  I  cannot  assent  to 
this  view.  I  have  always  been  under  the  impression  that  a  concurrence 
of  intention  was  an  essential  element  of  a  contract.  Nobody  can 
doubt  that  it  is  essential  in  making  an  agreement  to  ascertain  who  are 


CHAP.    III.]  ACT  IX   BEHALF  OF  EXISTING  PERSON.  67 

then  intended  to  be  made  parties  to  it.  It  is  impossible  in  constru- 
ing a  contract  to  give  any  weight  to  such  a  reserved  intention  as  that 
suggested  in  this  case;  to  do  so  would  be  to  open  wide  a  doorway  to 
fraud  and  deception;  and  it  would  necessitate  the  addition  of  the 
doubtful  science  of  thought-reading  to  the  requirements  of  a  mercan- 
tile education.  I  reject,  therefore,  this  doctrine  of  mental  reserva- 
tion, and  strip  from  the  case  the  element  of  secret  intention. 

The  case  then  is  reduced  to  this:  that  there  is  a  contract  between 
Roberts  and  Durant  simply,  to  which  it  was  never  avowedly  con- 
templated that  Keighleys  should  be  parties.  Neither  Keighleys  nor 
Durant  could  make  the  former  liable  by  adoption  or  ratification  of 
a  contract  to  which,  when  it  was  concluded,  it  was  not  in  contempla- 
tion of  themselves  or  Durant  that  they  should  or  could  be  so.  This 
action,  therefore,  which  is  based  on  a  contract  to  which  Keighleys 
were  not  parties,  must  fail. 

I  say  nothing  about  any  new  contract  which  it  was  open  for  the 
parties,  or  any  of  them,  to  have  made  if  they  had  so  thought  fit  — 
a  new  contract  between  themselves.  It  may  or  may  not  be  that 
some  contract  between  Roberts  and  Keighleys  might  have  been 
formulated  out  of  the  interview  with  Wright  on  May  12  at  Man- 
chester. I  am  now  dealing  only  with  the  contract  made  on  the  11th 
between  Roberts  and  Durant,  to  which,  in  my  opinion,  the  appellants 
(KeigHeys)  could  not  make  themselves,  or  be  made  by  Durant, 
parties. 

I  will  not  detain  your  Lordships  by  again  referring  to  the  numerous 
cases  cited  at  the  bar,  nor  to  those  so  fully  discussed  by  the  Court  of 
Appeal;  in  addition  to  these,  I  desire  only  to  refer  to  that  of  Kelner 
V.  Baxter,  (1866)  L.  R.  2  C.  P.  174,  decided  by  Erie,  C.  J.,  and  Willes, 
Byles,  and  Keating,  JJ.  I  agree  in  the  judgment  of  the  present 
Master  of  Rolls  in  the  Court  of  Appeal.  It  follows  that,  with  all 
respect  to  the  opinions  expressed  by  the  majority  of  that  Court,  I 
cannot  concur  in  their  views.  In  my  opinion,  therefore,  the  judg- 
ment of  the  Court  of  Appeal  should  be  reversed,  the  judgment  of 
Day,  J.,  restored,  and  this  appeal  allowed  with  costs. 

Lord  Robertson.  .  .  .  With  the  Master  of  Rolls,  and  in  his 
words,  I  hold  that,  "  unless  the  contract  made  by  the  unauthorized 
agent  purports  or  professes  ...  to  have  been  entered  into  on  be- 
half of  another  .  .  .  then  that  contract  made  by  the  unauthorized 
agent  was  not  capable  of  being  ratified  by  a  stranger  to  it."  To 
speak  of  the  "  purporting  or  professing  "  as  if  this  were  one  condition, 
more  or  less,  of  ratification,  seems  to  me  to  be  rather  an  understate- 
ment. All  are  agreed  that  there  must  be  some  special  relation  be- 
tween the  ratifier  and  the  contract  other  than  and  antecedent  to  his 
claiming  the  contract.  To  hold  otherwise  would  be  to  admit  extrava- 
gant results.  It  seems  to  me  that  the  whole  hypothesis  of  ratification 
is,  that  the  ultimate  ratifier  is  already  in  appearance  the  contractor. 


68  KEIQHLEY,   MAXSTED   &    CO.   V.   DURANT.  [CIIAP.   III. 

and  that  by  ratifying  he  holds  as  done  for  him  what  already  bore, 
purported  or  professed  to  be,  done  for  him.  There  is,  as  it  seems 
to  me,  no  room  for  ratification  (unless  all  the  world  may  ratify) 
until  the  credit  of  another  than  the  agent  has  been  pledged  to  the 
third  party.  Whether  the  unauthorized  agent  be  marked  out  as  an 
agent  by  what  he  says,  or  by  what  he  wears,  is,  of  course,  a  mere 
matter  of  circumstance  and  evidence;  but  an  agent  he  must  be 
known  to  be,  and  as  an  agent  he  must  act.  On  the  other  hand,  the 
only  theory  consistent  with  the  respondents'  argument  is,  that  the 
essential  condition  is  that  the  person  making  the  contract  did  so  in 
a  state  of  mind  which  may  more  accurately  be  described  as  hope  than 
intention,  that  the  person  who  ex  hypothesi  ultimately  "  ratifies " 
would  "  ratify."  The  difiiculty  of  stating  this  theory,  and  the  difficulty 
of  working  it,  having  regard  to  its  basis  being  unexpressed  and  very 
likely  half-formed  expectations,  are  not  indeed  conclusive  objections, 
but  they  challenge  scrutiny  of  supposed  origin  of  the  theory.  .  .  . 

Lord  Lindley.  .  .  .  The  principle  relied  on,  and  the  only  prin- 
ciple which  by  our  law  can  be  invoked  with  any  chance  of  success,  is 
that  known  as  ratification,  by  which  an  approval  of  what  has  been 
done  is  sometimes  treated  as  equivalent  to  a  previous  authority  to 
do  it.  The  mere  statement  of  the  general  nature  of  what  is  meant 
by  ratification  shows  that  it  rests  on  a  fiction.  T\Tiere  a  man  acts 
with  an  authority  conferred  upon  him,  no  fiction  is  introduced; 
but  where  a  man  acts  without  authority  and  an  authority  is  imputed 
to  him  a  fiction  is  introduced,  and  care  must  be  taken  not  to  treat 
this  fiction  as  fact.  .  .  . 

The  doctrine  of  ratification  as  hitherto  applied  in  this  country  to 
contracts,  has  always,  I  believe,  in  fact  given  efl'ect  in  substance  to 
the  real  intentions  of  both  contracting  parties  at  the  time  of  the 
contract,  as  shown  by  their  language  or  conduct.  It  has  never  yet 
been  extended  to  other  cases.  The  decision  appealed  from  extends 
it  very  materially,  and  I  can  find  no  warrant  or  necessity  for  the 
extension. 

I  have  examined  all  the  authorities  referred  to  in  the  judgments 
of  the  Court  of  Appeal,  and  those  cited  by  counsel  in  this  House,  and 
with  two  apparent  exceptions  they  are  all,  in  my  opinion,  adverse 
to  the  plaintiffs.  One  exception  is  the  passage  in  Bird  v.  Brown,  4 
Ex.  786,  which  has  been  already  commented  on,  and  which  I  do  not 
clearly  understand.  The  other  apparent  exception  is  Soames  v. 
Spencer,  1  D.  &  K.  32;  24  E.  K.  631,  which,  when  examined,  does 
not  really  help  the  plaintiffs.  There,  one  of  two  co-owners  of  oil  sold 
the  oil  to  the  defendants.  The  buyers  —  i.  e.,  the  defendants  —  ap- 
parently did  not  know  that  the  oil  did  not  wholly  belong  to  the 
seller.  When  informed  that  there  was  a  co-owner  who  objected  to 
the  bargain,  the  defendants  insisted  that  he  was  bound  by  it,  and  he 
acquiesced  in  their  view.     Both  parties  treated  the  contract  as  if 


CHAP.   III.]  ACT   IN   BEHALF   OF   EXISTING   PERSON.  69 

made  between  both  owners,  as  sellers,  and  the  buyers.  Afterwards, 
when  sued  by  both  co-owners  for  not  accepting  the  oil,  the  de- 
fendants —  i.  e.,  the  buyers  —  changed  their  tactics,  and  contended 
that  there  was  no  ratification,  and  no  contract  in  writing,  to  satisfy 
the  Statute  of  Frauds.  It  is  plain  from  the  judgment  of  Abbott, 
C.  J.,  that  the  conduct  of  the  defendants  themselves  removed  any 
real  difficulty  as  regards  ratification  which  otherwise  might  have 
arisen. 

It  may  be  that  if  one  of  several  co-owners  of  a  chattel  sells  it, 
without  the  authority  of  his  co-owners,  to  a  person  who  believes  he 
is  dealing  with  the  sole  owner  of  the  property  sold,  the  transaction 
can  be  ratified  by  the  undisclosed  co-owners,  and  that  they  can  then 
sue  or  be  sued  on  the  contract  as  undisclosed  principals.  Their  in- 
terest in  the  property  may  justify  this  view.  In  Soames  v.  Spencer, 
1  D.  &  R.  32;  24  E.  E.  631,  it  was  assumed  rather  than  decided 
that  ratification  in  such  case  is  possible,  and  I  am  far  from  saying 
that  it  is  not.  The  co-ownership  shows  that  the  seller,  if  acting 
honestly,  must  in  fact  have  been  acting  for  his  co-owners  as  well  as 
for  himself.  His  intention  is  supplemented  by  a  fact  which  com- 
pletes the  proof  of  what  is  necessary.  In  the  present  case  there  is 
no  co-ownership,  which  was  the  foundation  of  the  decision  in  Soames 
V.  Spencer,  1  D.  &  E.  32;  24  E.  E.  631,  and  consequently  the  de- 
cision when  carefully  looked  at  is  not  really  an  authority  for  the 
plaintiffs.  .  .  . 

Order  appealed  from  reversed  and  judgment  of  Day,  J.,  restored, 
with  costs  here  and  below.^ 


HAYWAED   V.   LANGMAID. 

181  Mass.  426.     1902. 

Contract  for  a  balance  due  for  the  construction  of  a  house  and 
repairs  upon  other  property.  The  house  was  constructed  upon  de- 
fendant's land  under  a  contract  in  writing  between  the  plaintiff  and 
AVebster  C.  Langmaid,  a  son  of  defendant.  There  was  evidence  that 
Webster  C.  Langmaid  in  making  the  contract  did  so  as  the  agent  of 
the  defendant;  that  he  did  not  disclose  to  the  plaintiff  that  he  was 
acting  as  agent^  and  that  the  plaintiff  supposed  that  Webster  G. 
Langmaid  was  the  owner  of  the  land  upon  which  the  house  was  to 
be  erected,  and,  relying  upon  these  facts,  signed  the  contract,  furnished 
the  materials,  and  constructed  the  house,  and  that  he  did  not  learn 
until  after  the  house  was  constructed  that  Webster  C.  Langmaid  was 
not  the  owner  of  the  land.    There  were  certain  other  items  in  the 

^  Concurring  opinions  were  also  delivered  by  Lord  Macnaghten,  Lord  James  of 
Hereford,  and  Lord  Davey. 


70  WYCOFF  V.   DAVIS.  [CHAP.   III. 

declaration  outside  of  the  written  contract  amounting  to  about  $82, 
for  work  done  and  materials  furnished  on  other  property  of  the  de- 
fendant at  the  request  of  Webster  C.  Langmaid;  and  the  plaintiff 
offered  evidence  tending  to  show  that  in  ordering  this  work  Webster 
C.  Langmaid  acted  as  the  agent  of  his  mother  and  was  acting  within 
the  scope  of  his  authority  as  such  agent.  There  was  evidence  put  in 
by  the  plaintiff  which,  he  contended,  not  only  tended  to  prove  such 
agency,  but  also  tended  to  show  that,  if  Webster  C.  Langmaid  had 
in  any  respect  exceeded  his  authority,  the  defendant  had  ratified  his 
acts.  It  was  admitted  by  the  defendant  that  if  the  plaintiff  was  en- 
titled to  recover  anything,  he  should  recover  for  the  full  amount 
claimed. 

The  jury  found  for  the  plaintiff  in  the  sum  of  $2,754.09. 

The  defendant  filed  a  notice  for  a  new  trial  on  the  ground  that 
"the  judge  refused  to  instruct  the  jury,  as  prayed  for  by  the  de- 
fendant, that  the  meaning  of  ratification  in  law  is  the  adoption  of 
an  act  which  has  been  done  by  one  purporting  or  assuming  to  act  as 
agent." 

Morton,  J.  There  are  two  questions  in  this  case :  1st,  whether  the 
instruction  that  was  requested,  "  that  the  meaning  of  ratification  in 
law  is  the  adoption  of  an  act  which  has  been  done  by  one  purporting 
or  assuming  to  act  as  agent";  and  2d,  whether  the  motion  for  a 
new  trial  was  rightly  overruled. 

It  is  evident,  we  think,  that  the  instruction  was  understood,  and 
rightly,  by  the  presiding  judge  to  mean  that  it  was  necessary  to  a 
ratification,  that  the  act  should  have  been  done  by  one  who  represented 
or  held  himself  out  as  an  agent  in  respect  to  the  matter  to  which  it 
related.  But  such  is  not  the  law.  It  is  necessary'  in  order  to  a  rati- 
fication that  the  act  should  have  been  done  by  one  who  was  in  fact 
acting  as  an  agent,  but  it  is  not  necessary  that  he  should  have  been 
understood  to  be  such  by  the  party  with  whom  he  was  dealing. 
Sartwell  v.  Frost,  122  Mass.  184;  Ford  v.  Linehan,  146  Mass.  283; 
New  England  Dredging  Co.  v.  Eockport  Granite  Co.,  149  Mass.  381 ; 
Schendel  v.  Stevenson,  153  Mass.  351.  The  request  was  therefore 
properly  refused.  .  .  r 

Exceptions  overruled. 


WYCOFF   V.    DAVIS. 

127  Iowa,  399.     1905. 

Replevin.  Plaintiff's  agent,  Dahlberg,  had  authority  to  sell  and 
deliver  plaintiff's  typewriting  machines  and  to  collect  for  the  same. 
Dahlberg  was  short  in  his  accounts  with  plaintiff  and  went  to  der 
fendant,  told  him  of  the  shortage,  and  borrowed  $125  to  send  to 


CHAP.    III.]  ACT   IN   BEHALF  OF   EXISTING   PERSON.  71 

plaintiff.  Dahlberg  delivered  to  defendant  the  machines  in  question 
as  security  for  this  loan,  giving,  however,  a  receipt  to  Davis  for  $205 
as  if  for  payment  for  the  machines.  Dahlberg  sent  the  money  to 
plaintiff  and  it  was  received  and  credited.  Afterward  plaintiff  learned 
of  the  transaction  and  brought  this  action  to  recover  the  machines. 
Judgment  for  defendant,  fixing  his  interest  in  the  machines  at 
$134.23. 

Deemer,  J.  .  .  .  There  is  but  a  single  proposition  involved  in 
the  case,  and  that  is,  may  plaintiff  recover  the  machines  from  Davis 
without  returning  the  $125  loaned  by  him  to  Dahlberg?  .  .  .  Di- 
vested of  all  extraneous  matter,  the  case  is  this.  Dahlberg  had  pos- 
session of  the  machines  as  agent  for  the  plaintiff,  with  authority  to 
sell  the  same  and  to  collect  the  purchase  price.  He  was  short  in  his 
accounts  with  his  principal,  and  applied  to  Davis  for  a  loan  to  make 
up  this  shortage,  stating  the  facts  to  him,  Davis.  He  represented  to 
Davis  that  the  machines  were  his,  and  that  he  had  authority  to  sell 
them.  Davis  loaned  $125  to  Dahlberg  individually,  and  took  the 
machines  as  security  for  the  loan,  but,  in  order  to  make  the  trans- 
action appear  as  a  sale,  insisted  upon  a  receipt  showing  a  sale  rather 
than  a  pledge.  Dahlberg  did  not,  of  course,  own  the  machines,  and 
he  could  not  pledge  them  as  security  for  his  individual  indebtedness. 
These  being  the  facts,  the  ultimate  conclusion  is  clear.  Dahlberg 
having  no  express  or  implied  authority  to  pledge  the  machines  as 
security  for  his  own  debt,  the  transaction  was  not  binding  upon  the 
plaintiff,  and  it  may  recover  its  property,  unless  it  be  that,  by  receiving 
the  money  as  a  result  of  the  transaction,  it  ratified  the  same  and  is 
estopped  from  asserting  its  title.  Of  course,  if  Dahlberg  had  assumed 
to  act  as  an  agent  for  his  company  in  securing  the  loan  and  pledging 
the  machines,  and  plaintiff  had  received  the  money  so  obtained,  it 
could  not  repudiate  the  transaction  without  returning  the  money. 
But  that  is  not  this  case.  Here  the  loan  was  not  made  to  the  plaintiff 
either  actually  or  ostensibly,  but  to  Dahlberg  in  his  individual  ca- 
pacity to  enable  him  to  meet  a  shortage  to  his  company.  The  prop- 
erty was  not  pledged  as  the  property  of  the  company,  but  as  Daw- 
berg's.  Dahlberg  was  indebted  to  his  company  for  other  accounts, 
and  the  loan  was  to  enable  him  to  make  up  his  shortage  to  his  prin- 
cipal. The  company  had  the  right  to  receive  its  money  from  its 
agent  to  apply  on  this  shortage,  no  matter  what  its  source,  so  long 
as  the  agent  had  not  undertaken  to  act  in  his  capacity  as  agent  in 
obtaining  the  money.  It  was  not  bound  to  return  the  money,  be- 
cause its  agent  borrowed  the  same  in  his  individual  capacity  and 
pledged  his  principal's  property  as  security  therefor,  not  as  agent,  but 
representing  himself  to  be  the  owner  thereof,  with  authority,  in 
virtue  of  such  ownership,  to  sell.  The  doctrine  of  ratification  has  no 
application  to  such  a  state  of  facts,  for  there  is  nothing  to  ratify; 
nothing  was  done  on  the  company's  behalf  or  in  its  name ;  the  trans- 


73  GARVEY   V.   JARVIS.  [CHAP.   III. 

action  was  in  the  name  of  Dahlberg  and  for  his  individual  benefit. 
In  such  cases  the  rules  relating  to  ratification  manifestly  do  not 
apply.  Thacher  v.  Pray,  113  Mass.  291,  18  Am.  Rep.  480;  Mechem 
on  Agency,  §  127;  Hamlin  v.  Sears,  82  N.  Y.  327;  White  v.  Sanders, 
32  Me.  188. 

We  are  then  brought  down  to  the  simple  question  as  to  which  of 
the  parties  to  this  litigation  has  the  better  title  or  right  to  the  pos- 
session of  the  property.  Plaintiff  is  conceded  to  have  been  the  owner. 
If  it  has  lost  its  title,  it  was  through  the  act  of  Dahlberg,  its  agent. 
Dahlberg  had  no  authority,  either  express  or  implied,  to  mortgage  or 
pledge  the  property  for  a  debt  of  his  own.  Bray  v.  Flickinger,  69 
Iowa,  167,  28  N.  W.  492 ;  s.  c,  79  Iowa,  313,  44  N.  W.  554.  Even 
if  Dahlberg  had  assumed  to  mortgage  the  property  as  the  property  of 
his  principal,  he  would  not  have  had  authority  to  do  so  under  power 
to  sell  and  collect  the  purchase  price,  although  here  the  question  of 
estoppel  by  ratification  might  perhaps  arise.  *  See,  as  supporting 
these  conclusions :  Mordhurst  v.  Boies,  24  Iowa,  99 ;  Gilbert  v.  Bax- 
ter, 71  Iowa,  327,  32  N.  W.  364 ;  Van  Vechten  v.  Jones,  104  Iowa, 
436,  73  N.  W.  1032 ;  Edgerly  v.  Cover,  106  Iowa,  670,  77  N.  W.  328. 
None  of  the  cases  cited  and  relied  upon  by  appellee  are  in  point,  for 
in  each  there  was  some  act  done  by  the  agent  in  the  name  of  or  on 
behalf  of  his  principal  which  was  the  subject  of  ratification.  This 
is  not  true  in  the  case  at  bar.  .  .  . 

The  judgment  of  the  district  court,  which  was  evidently  based  upon 
the  theory  of  ratification,  is  wrong,  and  it  is  therefore  reversed. 


GARVEY   V.   JARVIS. 

46  N.  Y.  310.     1871. 

Action  to  procure  a  decree  to  the  effect  that  defendant  held  a 
judgment  against  plaintiff,  assigned  to  defendant  from  one  Malcolm, 
as  agent  or  trustee  of  plaintiff  and  to  enjoin  its  collection.  The 
judgment  was  first  assigned  by  Malcolm  to  one  Roach  and  by  him 
to  Jarvis.  Plaintiff  appeals  from  a  judgment  for  defendant.  (54 
Barb.  179.) 

Church,  Ch.  J.  The  judge  before  whom  this  action  was  tried 
found,  as  facts,  that  one  Malcolm  held  a  judgment  against  the 
plaintiff  for  upward  of  $2,000,  and  had  told  the  plaintiff  he  W9uld  dis- 
charge it  for  $500,  but  the  plaintiff  had  not  accepted  the  offer;  that 
the  defendant  (who  was  a  stranger  to  the  plaintiff),  having  learned 
of  the  willingness  of  Malcolm  to  discharge  the  judgment  for  that  sum, 
applied  to  him,  and  by  the  false  representation,  that  he  came  from 
and  was  a  friend  of  the  plaintiff,  induced  Malcolm  to  assign  the 


CHAP.   III.]  ACT  IN   BEHALF  OF   EXISTING   PERSON.  73 

judgment  to  him,  for  which  he  paid  $500,  and  the  plaintiff  now 
claims  the  benefit  of  this  purchase.  .  .  . 

It  is  claimed,  however,  that  upon  principles  applicable  to  principal 
and  agent,  or  trustee  and  cestui  que  trust,  the  plaintiff  is  entitled  to 
maintain  the  action;  that  Eoach  having  assumed  to  act  as  the  agent 
of  the  plaintiff,  the  latter  could  ratify  the  act  and  entitle  himself  to 
the  benefits  of  it;  and  that  the  defendant  holds  the  judgment  as 
trustee  for  the  plaintiff,  and  must  account  to  him  for  it.  It  is  a 
familiar  rule,  that  the  ratification  of  an  unauthorized  act  of  an  agent 
is  equal  to  an  original  authority.  (Dunlap's  Paley's  Agency,  171, 
note  a.)  But  in  this  case  the  essential  element  is  wanting,  that  the 
act  must  be  done  for  another.  Here  it  was  not  so  done.  The  most 
that  can  be  claimed  is,  that  the  defendant  said  he  was  acting  for  the 
plaintiff,  which  was  false.  He  paid  his  own  money,  and  in  fact, 
acted  for  himself.  He  was  a  stranger  to  the  plaintiff,  and  of  course, 
under  no  obligation  to  act  for  him,  and  as  we  have  seen,  he  deprived 
the  plaintiff  of  nothing  to  which  he  was  entitled.  The  cases  on  this 
subject,  have  generally  arisen  between  the  principal  and  the  person 
with  whom  the  agent  acted,  either  to  enable  the  former  to  derive 
some  advantage  or  to  enforce  some  liability  against  him;  but  in  all 
these  cases  the  agent  acted  for  the  principal,  and  the  act  was  assumed 
by  him,  with  the  assent  of  the  agent.  It  has  been  held,  that  where  A 
does  an  act  as  agent  for  B,  without  any  communication  with  C,  the 
latter  cannot  afterward,  by  adopting  it,  make  A  his  agent,  and  thereby 
incur  any  liability  or  take  any  benefit  under  the  act  of  A.  Wilson 
V.  Tunman,  6  Mann.  &  Grang.  236. 

No  authority  has  been  cited,  and  I  think  it  is  safe  to  assert  that 
none  exists,  in  which  any  court  has  ever  held,  that  a  false  declaration 
of  agency  for  another  enables  the  latter,  as  against  the  alleged  agent, 
to  receive  the  benefit  of  an  act  actually  performed  for  the  latter, 
unless  that  act  was  performed  under  such  circumstances  as  to  create 
an  estoppel,  or  unless  the  assumed  principal  has  been  deprived  of 
some  legal  right,  or  othenvise  injured.  There  is  no  estoppel  in  this 
case.  The  plaintiff  neither  did  anything,  nor  omitted  to  do  anything 
in  consequence  of  the  statement  of  the  defendant,  and  he  was  de- 
prived of  no  legal  right.  .  .  . 

[The  court  then  holds  that  defendant  did  not  hold  the  judgment 
as  a  trustee  for  plaintiff.] 

Rapallo,  J.,  read  a  dissenting  opinion,  maintaining  that  the  as- 
signment of  the  judgment,  having  been  intended  by  Malcolm  for  the 
benefit  of  Garvey,  and  Eoach  with  knowledge  of  this,  having  pro- 
cured it  to  be  made  to  himself,  by  representing  to  Malcolm  that  he, 
Roach,  came  from  Garvey,  and  was  acting  for  his  benefit,  and  the 
assignment  having  thus  been  delivered  to  and  received  by  Roach,  in 
the  assumed  character  of  Garvey^s  representative,  Eoach,  in  fact, 
received  it  as  trustee  for  Garvey. 


74  JONES   V.   ATKINSON.  [CHAP.   IH. 

That  Garvey  had  the  right  to  affirm  this  trust,  and  claim  the 
benefit  of  it,  though  created  without  his  previous  authority,  knowl- 
edge, or  privity.  ... 

That  the  maxim  "  Omnis  raiihabitio  retroharitur,  et  mandato 
equiparatur,"  was  applicable  to  this  case.  Dunlap's  Paley  on  Agy. 
324;  Br6om's  Leg.  Max.  835;  6  M.  &  Gr.  243;  4  Exch.  R.  798, 
799.  .  .  . 

For  affirmance,  Ch.  J.  Allen,  Grover,  and  Folger,  JJ. ;  for  re- 
Tersal,  Eapallo  and  Peckham,  JJ. 

Judgment  afjirmed. 


2.    Assent  may  he  express  or  implied. 

JONES    V.    ATKINSON. 
68  Ala.  167.     1880. 

Action  to  recover  possession  of  a  mule  named  John.  Judgment 
for  plaintiff.    Defendant  appeals. 

Plaintiff  rented  a  mule  named  Jerry  to  one  Pritchett.  With 
plaintiff's  consent  Pritchett  traded  the  mule  Jerry  for  the  mule  John. 
Later  Pritchett  traded  the  mule  John  for  a  mare  called  the  "  Clan  ton 
mare."  Clanton  sold  the  mule  John  to  defendant.  There  was  a 
conflict  of  evidence  whether  plaintiff  authorized  Pritchett  to  trade 
the  mule  Johti  for  the  "  Clanton  mare  " ;  but  there  was  evidence  that 
after  the  trade  plaintiff  saw  the  mare  in  Pritchetfs  possession,  and 
that  plaintiff  offered  to  trade  the  mare  with  one  witness  and  sent 
another  to  Pritchett  to  make  such  a  trade.  The  defendant  asked 
the  court  to  charge  the  jury  that  "  if  they  find  that  Pritchett  after- 
wards traded  the  mule  John  for  a  certain  mare,  and,  while  said  mare 
was  in  the  possession  of  Pritchett,  plaintiff  claimed  her  as  his  prop- 
erty, and  offered  to  trade  her,  this  was,  in  law,  a  ratification  of  the 
trade  of  John  for  the  mare,  and  he  cannot  recover  in  this  suit."  The 
court  refused  to  give  this  charge,  and  the  defendant  excepted  to  its 
refusal;    and  he  now  assigns  said  refusal  as  error. 

Stone,  J.  "WTien  we  first  considered  the  charge  refused  in  this 
case,  we  doubted  somewhat  whether  the  hypothesis,  or  premises,  justi- 
fied the  conclusion  it  invoked.  Knowledge  of  the  unauthorized  act 
done  is  a  necessary  element  in  every  binding  ratification,  and  knowl- 
edge is  not  expressed  in  the  charge,  as  one  of  the  conditions  on 
which  a  verdict  for  the  defendant  was  claimed.  We  now  think  that, 
under  the  facts  and  circumstances  shown  in  the  evidence,  that  con- 
stituent was  necessarily  implied.  The  acts  of  ratification  supposed 
in  the  charge  are,  that  Atkinson,  while  said  mare  was  in  the  posses- 
sion of  Pritchett,  claimed  her  as  his  property,  and  offered  to  trade 


CHAP.   III.]  ASSENT  MAY   BE   EXPRESS   OR  IMPLIED.  75 

her.  The  undisputed  facts  are,  that  Pritchett  had  in  his  possession 
a  mule  called  Jerry,  which  Atkinson  claimed  as  his  property;  that 
Pritchett  traded  the  mule  Jerry,  for  a  mule  named  John,  and  Atkin- 
son ratified  the  trade,  and  claimed  the  mule  John  as  his  property ;  and 
that  subsequently  Pritchett  traded  the  mule  John  for  the  mare, 
called  the  "  Clanton  mare."  Now,  the  only  claim  Atkinson  could 
have  or  assert  to  the  mare,  rested  on  the  title  he  acquired  by  the 
exchange  of  the  mule  John  for  her.  This  claim,  if  he  made  it,  rests 
alone  on  the  fact  that  she  stood  in  the  place  of  the  mule  John.  If  he 
claimed  the  mare,  and  if  he  asserted  and  attempted  to  exercise  acts 
of  ownership  over  her,  this  was  a  ratification,  and  being  once  made, 
he  could  not  revoke  it,  unless  it  was  made  under  a  misapprehension 
of  the  facts.  His  right  and  claim  to  the  mare  had  no  foundation  to 
rest  on,  unless  he  had  parted  with  right  and  claim  to  the  mule.  He 
could  not  claim  both,  and  claiming  one,  he  renounced  the  other. 

The  case  of  Meehan  v.  Forrester,  52  N.  Y.  277,  presented  a  ques- 
tion of  ratification  vel  non.  Pinkney,  as  the  attorney  and  agent  of 
Bertine,  was  intrusted  with  the  collection  of  a  claim  due  the  latter. 
Without  any  authority  from  his  principal,  Pinkney  took  from  the 
debtor  a  deed  to  lands,  absolute  on  its  face,  but  intended  as  security 
only.  The  Court  of  Appeals  said :  "  There  was  no  dealing  on  the 
subject  between  the  plaintiff  [debtor]  and  Bertine,  except  through 
Pinkney.  The  evidence  justifies  the  inference  that  the  deed  was 
received  by  Pinkney  for  Bertine,  in  pursuance  of  the  agreement  made 
between  Pinkney  and  the  plaintiff,  and  delivered  by  Pinkney  to 
Bertine.  The  agency  of  Pinkney  was  to  collect  the  debt,  not  to  pur- 
chase lands.  When,  under  those  circumstances,  Pinkney  delivered 
to  Bertine  the  deed  obtained  from  the  plaintiff,  it  was  the  duty  of 
Bertine  to  inquire,  and  of  Pinkney  to  communicate,  under  what 
arrangement  the  deed  had  been  obtained.  In  the  absence  of  any 
evidence  to  the  contrary,  the  presumption  is  that  these  duties  were 
performed.  If  not,  and  Bertine  received  the  deed  blindly,  without 
receiving  or  making  any  inquiry,  he  must  be  deemed  to  have  con- 
fided the  whole  matter  to  his  attorney,  and  adopted  whatever  arrange- 
ment the  latter  may  have  made  to  obtain  the  deed."  Carving  v. 
Southland,  3  Hill,  552.  And  a  ratification  once  made  becomes  irre- 
vocable. Wharton  on  Agency,  §  73 ;  Buck  v.  Jones,  16  Texas,  461 ; 
Clark  V.  Van  Riemsdyk,  9  Cranch,  153;  Seago  v.  Martin,  6  Heisk. 
308 ;  Story  on  Agency,  §  253 ;  Lee  v.  Fontaine,  10  Ala.  755 ;  Fire- 
man's Ins.  Co.  V.  McMillan,  29  Ala.  147;  Crawford  v.  Barkley,  18 
Ala.  270.  In  Lee  v.  Fontaine,  supra,  it  is  said,  "  Even  the  silence  of 
the  principal  will,  in  many  cases,  amount  to  a  conclusive  presumption 
of  the  ratification  of  an  unauthorized  act."  The  charge  asked  should 
have  been  given. 

Reversed  and  remanded. 


76  HYATT    V.    CLARK.  [CHAP.    III. 


EUTLAND   AND   BURLINGTON   EAILROAD   CO.   v. 
LINCOLN. 

29  Vt.  206.     1857. 

Assumpsit  to  recover  assessments  upon  an  alleged  subscription  to 
stock.  One  Buckmaster  signed  Lincoln's  name  as  a  subscriber  to 
ten  shares  of  stock  in  the  plaintiff  company.  Plaintiff  offered  evi- 
dence that  defendant  had  stated  to  several  witnesses,  but  not  in  the 
presence  of  Buckmaster  or  any  oflBcer  of  the  company,  that  he  had 
subscribed  for  ten  shares  in  plaintiff  company.  Defendant  asked  the 
court  to  charge  that  the  mere  declaration  of  defendant  as  above  did 
not  amount  to  ratification.  The  court  refused  the  charge,  and  gave 
one  to  the  contrary.    Verdict  for  plaintiff. 

The  opinion  of  the  court  was  delivered  by 

Eedfield,  Ch.  J.  This  case  seems  to  have  been  tried  in  such  a  man- 
ner as  to  be  practically  about  as  advantageous  to  the  defendant,  per- 
haps, as  if  the  charge  had  been  strictly  and  technically  correct.  The 
testimony  no  doubt  tended  very  strongly  to  show  either  an  original 
authority  in  Buckmaster  to  make  the  subscription  in  the  defendant's 
name,  or  that  he  had  consented  to  assume  it.  But  the  specific  ques- 
tion raised,  and  upon  which  the  court  were  requested  to  charge  was, 
whether  Lincoln's  declaration  to  mere  strangers  that  he  had  such 
an  amount  of  stock  in  the  defendants'  company  amounted  to  such  a 
ratification  of  the  subscription.  And  it  is  not  claimed  in  argument 
that  it  did.  "We  think  it  impossible,  therefore,  to  affirm  the  charge 
without  making  presumptions  so  remote  that  they  seem  to  us  some- 
what unnatural.  .  .  . 

Judgment  reversed  and  case  remanded. 


'    HYATT   V.    CLAEK. 

118  N.  Y.  563.     1890. 

Cross  actions  between  the  same  parties.  Clark's  action  was  for 
specific  performance  of  a  clause  in  a  lease  providing  for  a  renewal. 
Mrs.  Hyatt's  action  was  for  the  cancellation  of  the  lease,  upon  the 
ground  that  her  agent  exceeded  his  authority  in  making  it.  The  trial 
court  found  for  Mrs.  Hyatt,  but  the  General  Term  reversed  the  judg- 
ment.   She  appealed  to  the  Court  of  Appeals. 

In  1880,  Mrs.  Hyatt,  while  in  England,  appointed  one  Lake,  by 
written  power  of  attorney,  her  agent  to  manage  her  business  in  the 
United  States,  to  sell  and  convey  her  property,  to  receive  and  recover 


CHAP.   III.]  ASSENT   MAY   BE  EXPRESS  OR  IMPLIED.  77 

all  moneys  due  her,  and  to  execute  all  instruments  necessary  to  these 
ends.  Lake  leased  premises  to  Clark;  but  both  had  doubts  whether 
the  power  of  attorney  authorized  a  lease,  and  the  lease  was  accepted 
subject  to  Mrs.  Hyatt's  approval.  Mrs.  Hyatt  refused  to  approve, 
and  cancelled  the  power  of  attorney.  Clark,  however,  refused  to  can- 
cel the  lease,  and  went  into  possession.  Mrs.  Hyatt  did  not  know 
that  Clark  first  received  the  lease  conditionally,  but  was  informed  by 
Lake  that  the  lease  was  valid  and  could  not  be  cancelled.  She  there- 
fore received  the  rent  from  Clark  for  the  term  fixed  in  the  lease,  but 
refused  to  renew  it  for  another  term  as  provided  for  in  the  renewal 
clause. 

Vann,  J.  We  do  not  de6m  it  important  to  decide  whether  the 
power  of  attorney  authorized  Mr.  Lake  to  execute  the  lease  in  question 
or  not,  because,  in  either  event,  the  same  result  must  follow,  under 
the  circumstances  of  this  case. 

If,  on  the  one  hand,  he  acted  without  adequate  authority  in  giving 
the  lease,  both  the  lessor  and  the  lessee  knew  it,  for  both  knew  the 
facts,  and  both  are  presumed  to  have  known  the  law,  and  the  former, 
at  least,  had  an  absolute  right  to  disaffirm  the  contract.  As  she  knew 
the  contents  of  the  power  of  attorney  and  the  lease,  and  that  the  latter 
was  executed  by  her  agent  in  her  name,  it  was  not  necessary  that  she 
should  be  informed  of  the  legal  effect  of  those  facts.  Kelley  v.  Xew- 
buryport  &  Amesbury  Horse  R.  E.  Co.,  141  Mass.  496;  Phosphate 
Lime  Co.  v.  Green,  L.  R.  (7  C.  P.)  43;  Mechem  on  Agency,  sec.  139. 

Whether  influenced  by  caprice  or  reason,  if  she  had  promptly  noti- 
fied the  lessee  that  she  repudiated  the  lease  because  her  agent  had  no 
power  to  execute  it,  his  rights  would  have  been  forthwith  termi- 
nated, and  he  would  have  had  no  lease.  The  right  to  disaffirm  on 
one  tenable  ground  would,  if  acted  upon,  have  been  as  effective  as 
the  right  to  disaffirm  upon  all  possible  grounds.  Under  the  condi- 
tion supposed,  the  law  gave  her  the  same  right  to  disaffirm  without 
any  agreement  to  that  effect,  that  she  would  have  had  if  her  agent, 
being  duly  authorized  to  lease,  had  expressly  provided,  in  the  written 
instrument,  that  she  could  disaffirm  if  she  chose  to  do  so.  Therefore, 
by  accepting  the  rent  of  the  demised  premises  for  more  than  four 
years,  without  protest  or  objection,  she  ratified  the  lease  as  completely 
as  she  could  have,  if  she  had  known  of  two  grounds  upon  which  to 
disaffirm,  instead  of  only  one.  Two  grounds  could  not  make  the  right 
any  more  effectual  than  one.  If  she  had  the  right  at  all,  the  number 
of  grounds  upon  which  she  could  justify  its  exercise  is  unimportant. 
Her  ratification  was  none  the  less  complete,  because,  being  unwilling 
to  run  the  risk  of  a  doubtful  question  of  law,  she  did  not  at  once  act 
as  she  would  have  acted  if  she  had  known  all  of  the  facts.  As  said 
by  the  court,  in  Adams  v.  Mills,  60  N.  Y.  533,  "  the  law  holds  that  she 
was  bound  to  know  what  authority  her  agent  actually  had."  Having 
executed  the  power  of  attorney,  she  is  conclusively  presumed  to  have 


78  HYATT    V.    CLARK.  [CIIAP.    III. 

known  what  it  meant  and  the  extent  of  the  authority  that  it  conferred. 
(Best  on  Ev.  123;  Wharton  on  Ev.  §  1241.) 

If  the  lease  was  ultra  vires,  therefore,  by  ratifying  it,  she  in  legal 
effect  executed  and  delivered  it  herself,  and  whatever  was  said  between 
Lake  and  Clark,  became  immaterial.  Even  if  they  agreed  that  she 
should  have  the  right  to  disapprove,  it  is  of  no  importance,  because 
she  had  that  right  without  any  such  agreement.  If  her  agent  had  no 
power  to  execute  the  lease,  the  delivery  thereof,  whether  absolute  or 
conditional,  could  not  affect  her  rights.  If  she  was  dissatisfied  with 
it,  she  could  have  been  relieved  of  all  responsibility  thereunder  by 
promptly  saying  to  the  lessee :  "  This  contract  was  not  authorized  by 
the  agency  I  created,  and  I  refuse  to  be  bound  by  it."  After  that 
there  would  have  been  no  lease.  If  the  action  of  her  agent  was  un- 
authorized, it  did  not  bind  her,  until  by  some  act  of  ratification  she 
bound  herself.  By  ratifying,  she  waived  any  right  to  disaffirm  upon 
any  ground,  known  or  unknown,  because  the  lease  did  not  exist,  as  a 
lease,  by  the  act  of  her  agent,  but  by  her  own  act  of  confirmation. 

If,  on  the  other  hand,  Mr.  Lake  was  duly  authorized  to  give  the 
lease,  certain  presumptions  of  controlling  importance  spring  from 
that  fact.  He  is  presumed  to  have  disclosed  to  his  principal,  within 
a  reasonable  time,  all  of  the  material  facts  that  came  to  his  knowl- 
edge while  acting  within  the  scope  of  his  authority. 

It  is  laid  down  in  Story  on  Agency  (sec.  140),  that  "  notice  of  facts 
to  an  agent  is  constructive  notice  thereof  to  the  principal  himself, 
where  it  arises  from  or  is  at  the  time  connected  with  the  subject-matter 
of  his  agency,  for,  upon  general  principles  of  public  policy,  it  is  pre- 
sumed that  the  agent  has  communicated  such  facts  to  the  principal, 
and  if  he  has  not,  still  the  principal,  having  intrusted  the  agent  with 
the  particular  business,  the  other  party  has  a  right  to  deem  his  acts 
and  knowledge  obligatory  upon  the  principal." 

In  other  words,  she  was  chargeable  with  all  the  knowledge  that  her 
agent  had  in  the  transaction  of  the  business  he  had  in  charge.  Ingalls 
V.  Morgan,  10  N.  Y.  178;  Adams  v.  Mills,  supra;  Myers  v.  Mutual 
Life  Ins.  Co.,  99  N.  Y.  1,  11;  Bank  of  U.  S.  v.  Davis,  2  Hill,  451; 
Higgins  V.  Armstrong,  9  Col.  38. 

It  was  his  duty  to  keep  her  informed  of  his  acts,  and  to  give  her 
timely  notice  of  all  facts  and  circumstances  which  would  have  enabled 
her  to  take  any  step  that  she  deemed  essential  to  her  interests. 

She  does  not  question  the  good  faith  of  Mr.  Lake,  and  there  is  no 
proof  of  fraudulent  collusion  between  him  and  Mr.  Clark,  who,  while 
under  no  obligation  to  inform  Mrs.  Hyatt  of  the  facts,  had  the  right 
to  assume  that  her  agent  had  done  so.  Ingalls  v.  Morgan,  supra; 
Meehan  v.  Forrester,  52  N.  Y.  277;  Scott  v.  Middletown,  U.  &  W.  G. 
R.  R.  Co.,  86  id.  200. 

It  was  her  duty  to  protect  her  interests  by  selecting  an  agent  of  ade- 
quate judgment,  experience,  and  integrity,  and  if  she  failed  to  do  so 


CHAP.    III.]  ASSENT   MAY   BE   EXPRESS   OR   IMPLIED.  79 

she  must  bear  the  loss  resulting  from  his  inexperience,  negligence,  or 
mistaken  zeal.  After  the  lapse  of  sufficient  time,  therefore,  she  i& 
presumed  to  have  acted  with  knowledge  of  all  the  acts  of  her  agent,  in 
the  line  of  his  agency. 

By  accepting  and  retaining  the  rent,  which  was  the  fruit  of  her 
agent's  act,  for  nearly  five  years  without  objection,  she  is  presumed  to 
have  ratified  that  act.  Hoyt  v.  Thompson,  19  N.  Y.  207 ;  Alexander 
V.  Jones,  64  Iowa,  207 ;  Heyn  v.  O'Hagen,  60  Mich.  150 ;  2  Greenl.  on 
Ev.  §§  66,  67.  Without  expressing  any  dissatisfaction  to  the  lessee, 
she  received  eighteen  quarterly  payments  of  rent  before  electing  to 
avoid  the  lease.  She  made  no  offer  to  return  any  part  of  the  rent  so 
paid,  although  she  tendered  back  the  amount  deposited  to  her  credit 
.for  the  nineteenth  quarter  at  the  time  that  she  demanded  possession 
■>f  the  premises. 

Independent  of  what  she  is  presumed  to  have  known  through  the 
information  of  her  agent,  she  in  fact  knew  the  terms  of  the  lease,  and 
that  it  was  executed  by  Mr.  Lake  in  her  name. 

Upon  her  arrival  in  this  country  in  September,  1880,  she  visited 
the  premises  and  saw  the  additions  and  improvements  that  the  tenant 
was  making  thereto,  and  at  that  time,  as  well  as  subsequently,  rent 
was  paid  to  her  in  person.  Apparently  she  had  all  the  knowledge  that 
she  cared  to  have,  for  she  made  no  inquiry  of  her  agent  until  about  six 
months  previous  to  the  expiration  of  the  first  term  of  five  years,  and 
not  until  after  the  lessee  had  given  notice  of  his  election  to  continue 
the  lease  for  a  second  term.  Thinking  that  the  rent  was  low,  she  then 
tried  to  find  out  something  from  her  agent  that  would  enable  her  to 
avoid  the  lease,  and,  as  a  result  of  her  efforts  in  this  direction,  ascer- 
tained the  fact  upon  which  she  bases  her  right  to  succeed  in  this  liti- 
gation. But  it  was  then  too  late  for  her  to  disaffirm,  because  her  long 
silence,  and  many  acts  of  ratification,  had  been  relied  upon  by  the 
tenants,  who  had  expended  a  large  sum  of  money  in  making  perma- 
nent improvements  upon  the  property.  Having  received  the  benefits  of 
the  contract,  she  could  not,  after  years  of  acquiescence,  suddenly  in- 
voke the  aid  of  the  courts  to  relieve  her  of  any  further  obligation, 
because  she  had  but  recently  discovered  a  fact  that  she  should  have 
iiscertained,  and  which  the  law  presumes  she  did  ascertain,  long  before. 
1  Am.  &  Eng.  Encj^c.  of  Law,  429. 

We  think  that  after  ample  opportunity  for  election  and  action,  she 
ratified  the  lease,  and  that  her  ratification  was  irrevocable. 

In  each  action  the  order  appealed  from  should  be  affirmed,  and 
Judgment  directed  upon  the  stipulation  in  favor  of  the  respondent, 
with  costs  of  appeal  to  this  court  in  one  action  only. 


80  WHEELER   V.   NORTHWESTERN   SLEIGH    CO.       [CHAP.   III. 

WHEELER   V.   NORTHWESTERN   SLEIGH   CO. 

39  Fed.  347.     1889. 

Action  to  recover  dividends  declared  b)'  defendant  on  March  1  and 
payable  on  May  1  and  July  1  upon  stock  at  the  time  owned  by  plain- 
tiff. After  the  dividend  vras  declared  and  before  it  was  payable,  plain- 
tiff authorized  one  Benjamin  to  sell  the  stock  at  par  but  expressly  re- 
served the  dividend.  Benjamin  on  March  12  sold  the  stock  and  the 
dividend  to  Chapman  &  Goss  at  the  par  value  of  the  stock,  represent- 
ing that  it  belonged  to  his  wife.  The  buyers  were  ignorant  that  Ben- 
jamin was  in  fact  plaintiff's  agent.  On  March  15  plaintiff  delivered 
the  stock  to  Benjamin,  who  delivered  it  to  the  buyers.  Benjamin  paid 
to  plaintiff  the  purchase  money,  which  he  still  retains.  Defendant, 
after  a  demand  by  plaintiff,  paid  the  dividend  to  Chapman  &  Goss. 

Jenkins,  J.  (after  deciding  that  the  dividend  would  not  pass  as 
an  incident  to  the  sale  of  the  stock). 

Did  the  retention  by  the  plaintiff  of  the  avails  of  the  stock  amount 
to  a  ratification  ?  The  plaintiff  received  as  avails  of  the  stock  the  exact 
amount  for  which  he  had  authorized  his  agent  to  dispose  of  his  stock. 
He  had  no  reason  to  suppose  that  any  false  representation  had  been 
made,  or  that  his  agent  had  assumed  to  dispose  of  any  other  property 
than  the  stock  as  the  consideration  for  the  money  paid  by  the  pur- 
chasers and  received  by  him.  Under  such  circumstances,  the  reten- 
tion of  the  money  cannot  be  held  to  be  a  ratification  by  him  of  the 
unauthorized  acts  of  the  agent,  because  it  was  retained  without  knowl- 
edge of  the  facts.  Bell  v.  Cunningham,  3  Pet.  69,  81 ;  Hastings  v. 
Proprietors,  18  Me.  436;  Bryant  v.  Moore,  26  Me.  87;  Thacher  v. 
Pray,  113  Mass.  291;  Navigation  Co.  v.  Dandridge,  8  Gill  &  J.  248; 
Smith  V.  Tracy,  36  N.  Y.  79;  Baldwin  t;.  Burrows,  47  N.  Y.  199; 
Smith  V.  Kidd,  68  N.  Y.  130;  Reynolds  v.  Ferree,  86  111.  576;  Rob- 
erts V.  Rumley,  58  Iowa,  301,  12  N.  W.  Rep.  323 ;  Bohart  v.  Obeme, 
36  Kan.  284,  13  Pac.  Rep.  388 ;  Insurance  Co.  v.  Iron  Co.,  21  Wis. 
458,  464. 

So  far  as  the  record  discloses,  the  first  notice  which  the  plaintiff 
received  that  the  purchasers  of  the  stock  claimed  the  dividend  was 
about  May  7th,  when  the  treasurer  of  the  defendant  seems  to  have 
advised  him  thereof,  and  requested  to  know  if  the  plaintiff  made  claim 
thereto.  It  does  not  appear  that  the  grounds  of  the  claim  were  then 
disclosed.  It  would  seem  probable  that  the  plaintiff  understood  the 
claim  to  be  bottomed  upon  the  ground  that  by  law  the  stock  carried 
dividend  previously  declared  and  unpaid,  —  a  ground  insisted  upon 
at  the  trial,  —  as  the  plaintiff  in  his  letter  of  that  date  speaks  of  the 
purchaser  undertaking  to  hold  the  dividend  "  under  some  technical- 
ity."   There  seems  to  have  been  no  communication  between  Chapman 


CHAP.   III.]  ASSENT   MAY   BE  EXPRESS   OR   IMPLIED.  81" 

&  Goss  and  the  plaintiff  at  any  time  touching  their  claim.  They 
asserted  no  claim,  and  disclosed  no  ground  of  claim.  They  knew  the 
false  representation  and  the  agreement,  of  which  the  plaintiff  was  igno- 
rant, and  were,  I  think,  bound,  if  they  sought  to  hold  the  plaintiff  to 
a  ratification  of  the  unauthorized  act  of  his  agent,  to  possess  the  plain- 
tiff with  facts  within  their  knowledge,  and  not  in  his,  and  to  assert  a 
claim  founded  thereon.  This  they  did  not  do,  but,  knowing  that  the 
plaintiff  claimed  the  dividend,  remained  passive  so  far  as  concerns 
getting  information  to  him  of  the  grounds  of  their  claim.  It  cannot 
surely  be  said  that  under  such  circumstances  the  retention  of  the 
money  was  an  act  of  affirmance.  To  so  hold  would  place  every  prin- 
cipal at  the  mercy  of  his  agent  with  respect  to  matters  as  to  which  he 
had  conferred  no  apparent  authority.  So  that  if  one  should  authorize 
his  agent  to  sell  his  house  for  $20,000,  and  the  agent  selling  the  house 
for  that  sum  should  include  in  the  sale  certain  bank-stock  which  he 
was  not  authorized  to  sell,  and  of  which  he  had  not  possession,  the 
principal,  by  the  mere  receipt  and  retention  of  the  sum  which  he  had 
authorized  to  be  taken  for  the  house,  and  in  ignorance  of  the  fact  that 
the  bank-stock  was  part  of  the  consideration  running  to  the  purchaser, 
would  be  bound  to  deliver  the  stock.  I  cannot  yield  assent  to  such 
doctrine.  The  purchaser  had,  in  the  case  supposed,  no  right  to  trust 
the  agent  with  respect  to  the  bank-stock.  He  had  not  the  possession  of 
it,  and  was  not  clothed  with  any  authority  with  respect  to  it.  The 
purchaser  was  bound  to  inquire  into  the  authority  of  the  agent  in  such 
case.  The  reception  and  retention  of  the  exact  sum  authorized  to  be 
taken  for  the  house  in  ignorance  of  the  act  of  the  agent  with  respect 
to  the  bank-stock,  is  no  ratification.  Otherwise  the  principal  is 
bound  for  every  unauthorized  act  of  the  agent,  and  the  purchaser  may 
trust  the  agent,  who  can  exhibit  no  authority.  Such  a  principle  woidd 
be  ruinous.  Upon  maturity  of  the  dividend,  suit  was  at  once  brought 
against  the  company.  Until  the  trial  the  plaintiff  is  not  shown  to 
have  knowledge  of  the  facts  upon  which  the  claim  of  the  purchasers 
to  the  dividend  is  based.  They  had  not  communicated  them  to  him. 
He  could  not  have  learned  them  from  the  agent,  for  he  denied  the 
representations  and  agreement.  This  was  no  acquiescence,  working 
ratification  of  the  unauthorized  act  of  Benjamin.  The  cases  relied 
upon  by  the  defendant  are  of  that  class,  either  of  recognized  agency 
or  of  acts  adopted  by  the  principal  as  done  for  him,  where  a  right  ob- 
tained by  the  agent  is  sought  to  be  enforced,  or  where  the  principal 
receives  the  avails  of  a  contract  either  authorized  or  adopted  by  him. 
The  liability  of  the  principal  for  the  fraud  of  his  agent  is  bottomed 
upon  the  principle  that,  by  adopting  the  contract  made  by  the  agent, 
and  receiving  the  avails,  the  principal  assumes  responsibility  for  the 
means  adopted  to  effect  the  contract ;  but,  as  well  observed  in  Baldwin 
V.  Burrows,  supra,  where  the  cases  are  ably  reviewed,  and  the  lines 
of  distinction  are  sharply  defined,  "  this  responsibility  for  instru- 

6 


83  STRASSER   V.    CONKLIN,  [cUAr.   111. 

mentalities  does  not  extend  to  collateral  contracts  made  by  the  agent 
in  excess  of  his  actual  or  ostensible  authority,  and  not  known  to  the 
principal  at  the  time  of  receiving  the  proceeds,  though  such  collateral 
contracts  may  have  been  the  means  by  which  the  agent  was  enabled 
to  effect  the  authorized  contract,  and  the  principal  retains  the  proceeds 
thereof  after  knowledge  of  the  fact."  The  present  case  is  not  within 
the  class  of  cases  relied  upon.  The  collateral  contract  for  the  transfer 
of  the  dividend  was  in  excess  of  any  authority,  actual  or  ostensible. 
The  proceeds  of  the  authorized  sale  of  the  stock  were  received  in  igno- 
rance of  the  fraud  perpetrated  by  the  agent.  The  amount  of  such 
proceeds  was' the  exact  amount  authorized  to  be  received  for  the  stock. 
The  plaintiff,  by  retaining  the  proceeds,  adopted  and  ratified  what  he 
had  authorized.  Such  action  cannot  be  tortured  into  ratification  of 
unauthorized  acts.  Smith  v.  Tracy,  36  N.  Y.  79 ;  Condit  v.  Baldwin, 
21  N.  Y.  219.  Judgment  for  plaintiff. 

Gresham,  J.,  concurs. 


STRASSER   V.    CONKLIN. 

64  Wis.  102.     1882. 

Action  for  balance  of  mortgage  debt.  Judgment  for  defendant. 
Plaintiff  appeals. 

Plaintiff's  assignor  sold  to  defendant's  grantor  certain  hotel  prem- 
ises, and  took  the  latter's  notes  and  mortgage,  at  the  same  time  assign- 
ing to  the  latter  two  policies  of  insurance  on  the  hotel  furniture,  but 
payable  to  him  as  his  interest  should  appear.  Defendant,  after  pur- 
chasing the  property,  had  a  policy  renewed  which  contained  a  like 
clause  in  favor  of  plaintiff's  assignor,  but  without  defendant's  knowl- 
edge. The  property  burned,  and  plaintiff,  as  assignee  of  the  mort- 
gage, claimed  the  insurance  money.  Plaintiff  gave  one  Erb  a  power 
of  attorney  to  collect  the  insurance  money.  Erb  agreed  with  defend- 
ant to  accept  a  certain  portion  of  the  insurance  money  and  a  recon- 
veyance of  the  premises  in  satisfaction  of  the  mortgage.  Plaintiff 
accepted  the  money,  but  refused  to  accept  the  conveyance,  repudiating 
Erb's  authority  to  make  such  an  agreement. 

Lyon^  J.  There  was  a  controversy  between  the  parties  as  to  whether 
the  defendant,  when  he  purchased  the  hotel  property,  agreed  with 
Craney  to  pay  the  notes  given  by  Craney  to  Fisher,  and  assigned  by 
the  latter  to  the  plaintiff,  and  also  as  to  whether  the  insurance  money 
belonged  to  the  plaintiff  or  to  the  defendant.  These  controversies 
were  settled  by  the  defendant  and  Mr.  Erb,  the  latter  assuming  to  act 
for  the  plaintiff.  By  the  terms  of  the  settlement  the  plaintiff  was  to 
receive  $653.77  of  the  insurance  money,  and  a  conveyance  of  the 
premises,  mortgaged  by  Craney  to  Fisher  to  secure  the  payment  of 


CirAP.   III.]  ASSENT   MAY   BE   EXPRESS   OR   IMPLIED.  83 

the  notes,  and  to  release  tlie  defendant  from  all  claim  on  the  mort- 
gage. This  was  declared  to  be  a  full  settlement  of  all  matters  between 
the  parties.  The  plaintiff  afterwards  received  the  insurance  money 
thus  stipulated  to  him.  He  did  so  with  full  knowledge  that  Erb  had 
assumed  to  act  as  his  agent  in  negotiating  the  settlement  with  the 
defendant,  and  with  full  knowledge  of  the  terms  of  the  settlement. 
The  evidence  of  this  is  undisputed  and  conclusive.  True,  at  the  same 
time  the  plaintiff  refused  to  accept  the  deed  of  the  mortgaged  prem- 
ises, and  denied  that  Erb  had  authority  to  make  the  settlement.  But 
he  received  and  retained  the  fruits  of  the  settlement,  —  the  insurance 
money. 

No  rule  of  law  is  more  firmly  established  than  the  rule  that  if  one, 
with  full  knowledge  of  the  facts,  accepts  the  avails  of  an  unauthorized 
treaty  made  in  his  behalf  by  another,  he  thereby  ratifies  such  treaty, 
and  is  bound  by  its  terms  and  stipulations  as  fully  as  he  would  be  had 
he  negotiated  it  himself.  Also,  a  ratification  of  part  of  an  unauthor- 
ized transaction  of  an  agent  is  a  confirmation  of  the  whole.  If  author- 
ities are  desired  to  propositions  so  plain  as  these,  they  abound  in  the 
decisions  of  this  court,  many  of  which  are  cited  in  the  briefs  of  coun- 
sel. Under  the  above  rules  it  is  entirely  immaterial  whether  Erb  was 
or  was  not  authorized  to  make  the  settlement  with  the  defendant.  If 
not  authorized,  the  plaintiff,  by  receiving  the  money  with  full  knowl- 
edge of  the  terms  of  settlement,  ratified  and  confirmed  what  he  did, 
and  cannot  now  be  heard  to  allege  his  agent's  want  of  authority. 

It  will  not  do  to  say  that  the  plaintiff  was  entitled  to  the  money 
he  received,  and  might  receive  and  retain  it  as  his  own  without  regard 
to  the  settlement.  That  was  the  very  point  of  the  controversy  between 
the  parties.  Manifestly  each  claimed  the  money  in  good  faith,  and 
we  cannot  determine  from  the  record  before  us  which  was  entitled  to 
it ;  and  it  is  immaterial  whether  one  or  the  other  was  so  entitled,  there 
being  a  real  controversy  between  them  on  that  question.  It  was  there- 
fore a  very  proper  case  for  negotiation  and  compromise  between  them, 
and  under  the  circumstances  they  must  both  be  held  bound  by  the 
settlement.  The  evidence  of  ratification  is  conclusive,  and  there  was 
nothing  for  the  jury  to  determine  in  that  behalf.  Hence,  the  court 
properly  directed  the  jury  to  find  for  the  defendant. 

The  foregoing  views  dispone  of  the  case,  and  render  it  unnecessary 
to  determine  the  question,  which  was  very  ably  argued  by  counsel, 
whether  a  parol  agreement  by  the  defendant  to  pay  the  mortgage  debt 
(if  he  so  agreed)  is  within  the  Statute  of  Frauds,  and  therefore  in« 
valid.    We  leave  that  question  undetermined. 

By  the  Court.    The  judgment  of  the  circuit  court  is  aflfirmed. 


84  WHEELER  AND   WILSON   MFG.    CO.   V.   AUGHEY.      [CIIAP.    III. 

WHEELER   AND   WILSON   MFG.    CO.   v.   AUGHEY. 

144  Pa.  St.  398.     1891. 

Action  on  judgment  notes.  Judgment  for  defendant.  Plaintiff 
appeals.  Defendant  gave  evidence  to  prove  that  plaintiff's  agent 
obtained  the  notes  from  defendant  upon  the  false  representation  that 
he  was  not  indebted  to  plaintiff,  but  wanted  the  notes  as  collateral 
security  for  machines  to  be  furnished  the  agent  by  plaintiff,  while  in 
fact  the  machines  were  not  furnished  and  the  notes  were  used  to  secure 
a  prior  indebtedness  of  the  agent.  Plaintiff  gave  evidence  to  prove 
that  defendant  made  the  notes  to  secure  the  agent's  past  indebtedness. 

Plaintiff  asked  a  charge  that  it  was  not  affected  by  the  misrepresen- 
tation of  the  agent,  which  was  denied. 

Mr.  Justice  Green.  The  learned  court  below  distinctly  charged 
the  jury  that,  if  the  notes  in  suit  were  given  for  a  past  indebtedness 
of  Landis  to  the  plaintiff,  their  verdict  should  be  in  favor  of  the  plain- 
tiff;  but  if  they  found  that  they  were  given  for  machines  to  be  fur- 
nished thereafter,  and  the  machines  were  not  delivered,  the  verdict 
should  be  for  the  defendant.  The  jury  found  for  the  defendant,  and 
thereby  determined  that  the  notes  were  given  for  machines  to  be  fur- 
nished in  the  future.  There  was  abundant  testimony  in  support  of 
the  defendant's  contention,  and  we  must  therefore  regard  it  as  an 
established  fact  that  the  notes  were  given  in  consideration  that  ma- 
chines should  be  delivered  to  Landis  by  the  plaintiff  subsequently  to 
the  execution  and  delivery  of  the  notes  in  question.  It  is  beyond  all 
question  that  Landis  obtained  the  signature  of  the  defendant  to  the 
notes,  and  that  he  delivered  the  notes  so  signed  to  the  plaintiffs,  who 
received  and  kept  them,  and  affirmed  their  title  to  them  by  bringing 
suit  upon  them  against  the  defendant.  For  the  purpose  of  obtaining 
the  notes,  Landis  most  certainly  acted  as  the  representative  of  the 
plaintiffs,  and  they  conclusively  accepted  the  fruits  of  his  act.  That 
they  cannot  do  this  without  being  subject  to  the  conditions  upon 
which  he  obtained  the  notes,  whether  he  had  authority  or  not  to  make 
or  agree  to  those  conditions,  is  too  well  settled  to  admit  of  any  doubt. 

The  whole  doctrine  was  well  expressed  by  Sharswood,  J.,  in  the  case 
of  Mundorff  v.  Wickersham,  63  Pa.  87  :  — 

"  If  an  agent  obtains  possession  of  the  property  of  another,  by 
making  a  stipulation  or  condition  which  he  was  not  authorized  to 
make,  the  principal  must  either  return  the  property,  or,  if  he  receives' 
it,  it  must  be  subject  to  the  condition  upon  which  it  was  parted  with 
by  the  former  owner.  This  proposition  is  founded  upon  a  principle 
which  pervades  the  law  in  all  its  branches:  Qui  sentit  commodum 
sentire  debet  et  onus.  The  books  are  full  of  striking  illustrations  of 
it,  and  more  especially  in  cases  growing  out  of  the  relation  of  prin- 


CHAP.   III.]  ASSENT   MAY   BE  EXPRESS   OE  IMPLIED.  85 

cipal  and  agent.  Thus,  where  a  party  adopts  a  contract  which  was 
entered  into  without  his  authority,  he  must  adopt  it  altogether.  He 
cannot  ratify  that  part  which  is  beneficial  to  himself,  and  reject  the 
remainder;  he  must  take  the  benefit  to  be  derived  from  the  transac- 
tion cum  onere." 

This  doctrine  is  so  reasonable  and  so  entirely  just  and  right  in  every 
aspect  in  which  it  may  be  considered,  and  it  has  been  enforced  by  the 
courts  with  such  frequency  and  in  such  a  great  variety  of  circum- 
stances, that  its  legal  soundness  cannot  for  a  moment  be  called  in 
question. 

It  is  of  no  avail  to  raise  or  discuss  the  question  of  the  means  of 
proof  of  the  agent's  authority.  The  very  essence  of  the  rule  is,  that 
the  agent  had  no  authority  to  make  the  representation,  condition,  or 
stipulation,  by  means  of  which  he  obtained  the  property,  or  right  of 
action,  of  which  the  principal  seeks  to  avail  himself.  It  is  not  because 
he  had  specific  authority  to  bind  his  principal  for  the  purpose  in  ques- 
tion that  the  principal  is  bound,  but  notwithstanding  the  fact  that 
he  had  no  such  authority.  It  is  the  enjoyment  of  the  fruits  of  the 
agent's  action  which  charges  the  principal  with  responsibility  for  his 
act.  It  is  useless,  therefore,  to  inquire  whether  there  is  the  same 
degree  of  technical  proof  of  the  authority  of  the  agent,  in  the  matter 
under  consideration,  as  is  required  in  ordinary  cases  where  an  affirm- 
ative liability  is  set  up  against  a  principal  by  the  act  of  one  who 
assumes  to  be  his  agent.  There  the  question  is  as  to  the  power  of  the 
assumed  agent  to  impose  a  legal  liability  upon  another  person;  and, 
in  all  that  class  of  cases,  it  is  entirely  proper  to  hold  that  the  mere 
declarations  of  the  agent  are  not  sufficient.  But  in  this  class  of  cases 
the  question  is  entirely  different.  Here  the  basis  of  liability  for  the 
act  or  declaration  of  the  agent  is  the  fact  that  the  principal  has  ac- 
cepted the  benefits  of  the  agent's  act  or  declaration.  Where  that  basis 
is  made  to  appear  by  testimony,  the  legal  consequence  is  established, 
Mr.  Justice  Sharswood,  in  the  case  above  cited,  after  enumerating 
many  instances  in  which  the  doctrine  was  enforced,  sums  up  the  sub- 
ject thus :  "  Many  of  these  cases  are  put  upon  an  implied  authority, 
but  the  more  reasonable  ground,  as  it  seems  to  me,  is  that  the  party 
having  enjoyed  a  benefit  must  take  it  cum  onere." 

We  are  of  opinion  that  the  learned  court  below  was  entirely  right  in 
the  treatment  of  this  case. 

Judgment  affirmed  in  each  of  these  cases. 

On  February  8,  1892,  a  motion  for  re-argument  was  refused. 


86  PHILADELPHIA,   W.    &   B.    R.   CO.   V.   COWELL.      [CHAP.   HI. 

BEYCE   V.   CLARK. 
42  N.  Y.  St.  Rep.  (N.  Y.  C.  P.  Gen.  T.)  471.     1892. 

Per  Curiam.  This  action  was  brought  to  recover  for  advertising 
done  for  the  Harvard  Publishing  Co.  upon  an  order  signed  "  Harvard 
Publishing  Co.,  W.  Campbell  Phelan,  Manager." 

It  is  always  the  duty  of  the  plaintiff  claiming  to  have  a  contract 
with  the  defendant  made  through  an  agent  to  inform  himself  whether 
the  agent  had  the  power  to  make  the  contract  relied  upon.  In  this 
case  the  testimony  left  that  question  in  doubt,  so  that  it  was  within  the 
province  of  the  court  to  determine  whether  there  was  such  an  agency 
or  not.  We  do  not  think  the  evidence  warrants  us  in  disturbing  its 
conclusion. 

But  it  further  appears  that  the  defendant  and  his  manager  received 
a  statement  of  plaintiff's  claim,  which  indicated  that  he  thought  a 
contract  had  been  made  with  defendant.  Under  such  circumstances, 
it  was  his  duty  to  immediately  notify  the  plaintiff  to  discontinue  the 
advertisement.  Instead  of  this,  it  was  allowed  to  appear  in  two  sub- 
sequent numbers  of  the  plaintiff's  periodical,  and  the  justice  very 
properly  rendered  judgment  for  those  two  insertions,  and  the  judg- 
ment will,  therefore,  be  affirmed,  with  costs. 


PHILADELPHIA,   W.   &   B.    EAILROAD   CO. 
V.    COWELL. 

28  Pa.  St.  329.     1857. 

Action  by  Cowell  to  recover  the  sum  of  $1,700  dividends  on  stock. 
Defence,  the  authorized  application  of  the  dividends  to  the  payment 
of  additional  stock  subscription.  Verdict  and  judgment  for  plaintiff. 
Defendant  appeals. 

.  The  subscription  for  additional  stock  was  made  in  plaintiff's  be- 
half by  one  Fisher,  who  promptly  informed  plaintiff  of  what  he  had 
done.  Plaintiff  remained  silent  for  about  seven  years  after  receiving 
this  information.  Fisher  had  previously  corresponded  with  plaintiff 
as  to  the  condition  of  the  company,  and  had  consulted  with  plaintiff's 
friends  in  this  country,  but  he  had  no  authority  to  act  for  plain- 
tiff.   The  court  rejected  the  evidence  offered  to  prove  these  facts. 

Woodward,  J.  The  question  presented  by  the  first  error  assigned, 
is  not  whether  the  evidence  offered  and  rejected  proved  the  plaintiff's 
ratification  of  Fisher's  subscription ;  but  whether  it  tended  to  prove  it. 

Suppose  the  court  had  admitted  the  evidence,  and  the  jury  had 


CHAP.   III.]         ASSENT  MAY  BE  EXPRESS  OB  IMPLIED.  87 

found  the  plaintiff's  assent  and  ratification,  could  he  have  expected 
us  to  reverse  the  judgment  on  the  ground  that  a  question  of  fact  had 
been  submitted  and  found  without  any  evidence  ? 

Could  it  have  been  said  that  the  facts  set  down  in  the  bill  of  excep- 
tion, fully  proved,  were  no  evidence  of  ratification;  that  they  were  so 
entirely  irrelevant  as  to  be  unworthy  of  consideration  by  rational 
minds  in  connection  with  such  a  question;  that  that  question  stood 
just  as  far  from  demonstration  after  such  evidence  as  before? 

Unless  this  could  have  been  said,  and  must  have  been  said  in  the 
event  supposed,  the  judgment  now  before  us  must  be  reversed;  for 
the  question  here  is,  in  essence  and  substance,  exactly  the  same  as  it 
would  have  been  then. 

If  this  evidence  might  have  satisfied  the  jury ;  that  is,  if  it  were  of 
a  quality  to  persuade  reasonable  men  that  Cowell  did  assent  to  Fisher's 
assumed  agency  after  he  had  full  knowledge  of  what  had  been  done, 
it  should  have  been  admitted.  The  question  in  the  cause  was  for  the 
jury,  and  not  the  court.  But  the  fact  to  be  inquired  for,  like  all 
mental  conditions  and  operations,  could  be  established  only  inferen- 
tially.  We  judge  of  the  mind  and  will  of  a  party  only  from  his  con- 
duct, and  if  he  have  done  or  omitted  nothing  which  may  fairly  be 
interpreted  as  indicative  of  the  mental  purpose,  there  is  indeed  no 
evidence  of  it  for  either  court  or  jury;  but  if  his  conduct,  in  given 
circumstances,  affords  any  ground  for  presumption  in  respect  to  the 
mental  purpose,  it  is  for  a  jury  to  define,  limit,  and  apply  the 
presumption. 

The  most  material  circumstance  in  the  offer  was  the  silence  of  Mr. 
Cowell.  Fully  informed  about  the  last  of  the  year  1848  as  to  what  had 
been  done  in  his  name,  and  the  motives  and  reasons  for  doing  it,  he 
did  not  condescend  to  reply  for  nearly  seven  years.  It  is  insisted  that 
this  fact,  even  when  taken  in  connection  with  the  other  circumstances 
in  the  offer,  was  no  evidence  of  his  intention  to  assent  to  the  new 
subscription. 

The  argument  admits  that  where  the  relation  of  principal  and  agent 
has  once  existed,  or  where  the  property  of  a  principal  has  with  his 
consent  come  into  the  hands  and  possession  of  a  third  party,  the  prin- 
cipal is  bound  to  give  notice  that  he  will  not  sanction  the  unauthor- 
ized acts  of  the  agent,  performed  in  good  faith  and  for  his  benefit; 
but  it  is  said,  and  truly,  that  Mr.  Fisher  had  never  been  an  authorized 
agent  of  the  plaintiff  for  any  purpose,  and  that  the  plaintiff's  property 
had  never  been  intrusted  to  him.  It  is  on  this  distinction  that  the 
learned  counsel  sets  aside  the  case  of  the  Kentucky  Bank  v.  Combs,  7 
Barr,  543,  and  indeed  all  of  the  authorities  relied  on  by  the  defendant. 

I  do  not  understand  counsel  to  mean  that  there  can  be  no  valid  rati- 
fication unless  one  of  the  conditions  specified  —  either  prior  agency 
or  possession  of  principal's  property  —  has  existed,  but  that  silence, 
sifter  knowledge  of  the  act  done,  is  evidence  of  ratification  only  in 


88  PHILADELPHIA,   W.   &   B.   R.    CO.   V.   COWELL.       [CHAP.   III. 

such  cases.  It  must  be  admitted  that  the  act  of  a  mere  stranger  or 
volunteer  is  capable  of  ratification,  for  all  the  authorities  are  so ;  but 
the  argument  is  that  the  silence  of  the  party  to  be  affected,  whatever 
the  attending  circumstances,  cannot  amount  to  ratification  of  the  act 
of  a  stranger. 

In  Wilson  v.  Tumman,  6  M.  &  G.  236,  C.  J.  Tindal,  on  the  author- 
ity of  several  old  cases,  considered  that  the  effect  of  a  ratification  was 
dependent  on  the  question  whether  the  person  assuming  to  act  had 
acted  for  another  and  not  for  himself.  The  act,  it  would  seem,  cannot 
be  ratified  unless  it  was  done  in  the  name  of  the  person  ratifying. 
Ratum  quis  habere  non  potest,  quod  ipsius  nomine  non  est  gestum. 
And  the  general  rule  is  thus  expressed  in  the  Digest,  50 :  Si  quis  ratum 
habuerit  quod  gestum  est,  obstringitur  mandati  actione. 

If,  then,  the  principle  of  law  be  that  I  can  ratify  that  only  which  is 
done  in  my  name,  but  when  I  have  ratified  whatever  is  done  in  my 
name,  I  am  bound  for  it  as  by  the  act  of  an  authorized  agent,  it  is 
apparent  that  my  silence,  in  view  of  what  has  been  done,  is  to  be  re- 
garded simply  as  evidence  of  ratification,  more  or  less  expressive,  ac- 
cording to  the  circumstances  in  which  it  occurs.  It  is  not  ratification 
of  itself,  but  only  evidence  of  it,  to  go  to  the  jury  along  with  all  the 
circumstances  that  stand  in  immediate  connection  with  it.  Among 
these  the  prior  relations  of  the  parties  are  very  important.  If  the 
party  to  be  charged  had  been  accustomed  to  contract  through  the 
agency  of  the  individual  assuming  to  act  for  him,  or  had  intrusted 
property  to  his  keeping,  or  if  he  were  a  child  or  servant,  partner  or 
factor,  the  relation,  conjunctionis  favor,  would  make  silence  strong 
evidence  of  assent. 

On  the  other  hand,  if  there  had  been  no  former  agency,  and  no 
peculiarity  whatever,  in  the  prior  relations  of  the  parties,  silence  — 
a  refusal  to  respond  to  a  mere  impertinent  interference  —  would  be 
a  very  inconclusive,  but  not  an  absolutely  irrelevant  circumstance. 
The  man  who  will  not  speak  when  he  sees  his  interests  affected  by 
another,  must  be  content  to  let  a  jury  interpret  his  silence. 

It  is  a  clear  principle  of  equity  that  where  a  man  stands  by  know- 
ingly, and  suffers  another  person  to  do  acts  in  his  own  name  without 
any  opposition  or  objection,  he  is  presumed  to  have  given  authority  to 
do  those  acts.  Semper,  qui  non  proliibet  pro  se  intervenire,  mandare 
creditur:  Story's  Agency,  §  89. 

We  do  not  apply  the  full  strength  of  this  principle  when  we  rule 
that  the  plaintiff's  silence,  in  connection  with  the  circumstances 
offered,  was  evidence  fit  for  the  consideration  of  a  jury  on  the  question 
of  ratification.  If  mental  assent  may  be  inferred  from  circumstances, 
silence  may  indicate  it  as  well  as  words  or  deeds.  To  say  that  silence 
is  no  evidence  of  it,  is  to  say  that  there  can  be  no  implied  ratification 
of  an  unauthorized  act,  or  at  the  least  to  tie  up  the  possibility  of  rati- 
fication to  the  accident  of  prior  relations.    Neither  reason  nor  author- 


CHAP.   III.]  ASSENT  MAY  BE   EXPRESS   OR  IMPLIED.  89 

ity  justifies  such  a  conclusion.  A  man  who  sees  what  has  been  done 
in  his  name  and  for  his  benefit,  even  by  an  intermeddler,  has  the 
same  power  to  ratify  and  confirm  it  that  he  would  have  to  make  a 
similar  contract  for  himself;  and  if  the  power  to  ratify  be  conceded 
to  him,  the  fact  of  ratification  must  be  provable  by  the  ordinary 
means. 

For  these  reasons,  the  distinction  on  which  the  argument  for  the 
defendant  in  error  rests  seems  to  us  to  be  too  narrow. 

The  prior  relations  of  the  parties  lend  great  importance  to  the  fact 
of  silence;  but  it  is  a  mistake  to  make  the  competency  of  the  fact 
dependent  on  those  relations.  I  am  aware  that  Livermore  cites  with 
approbation,  p.  50,  the  opinion  of  civil  law  writers,  that  where  a  volun- 
teer has  officiously  interfered  in  the  affairs  of  another  person,  and 
made  a  contract  for  him  without  any  color  of  authority,  such  other 
person  is  not  bound  to  answer  a  letter  from  the  intermeddler,  inform- 
ing him  of  the  contract  made  in  his  name,  nor  is  his  silence  to  be  con- 
strued into  ratification.  But  it  is  to  be  remembered  that  such  writers 
are  not  laying  down  a  rule  of  evidence  to  govern  trials  by  Jury,  but 
are  declaring  rather  the  effect  upon  the  judicial  mind  of  the  party's 
silence.  It  is  one  thing  to  say  that  the  law  will  not  imply  a  ratifica- 
tion from  silence,  and  a  very  different  thing  to  say  that  silence  is  a 
circumstance  from  which,  with  others,  a  jury  may  imply  it.  Because 
evidence  does  not  raise  a  presumption  so  violent  as  to  force  itself  upon 
the  judge  as  a  conclusion  of  law,  is  the  evidence  therefore  incompe- 
tent to  go  to  a  jury  as  ground  for  a  conclusion  of  fact?  No  writer, 
with  a  common  law  jury  before  his  eyes,  has  ever  maintained  the 
affirmative  of  this  proposition.  If  it  could  be  established  it  would 
abolish  that  institution  entirely,  and  refer  every  question  and  all  evi- 
dence to  the  judicial  conscience. 

But  it  is  time  now  to  remark  that  this  case  is  far  from  being  that 
of  a  mere  volunteer  or  intermeddler.  True  it  is  that  Mr.  Fisher  had 
not  any  proper  authority  to  make  the  new  subscription,  but  Messrs. 
Binney  and  Biddle,  the  friends  and  correspondents  of  the  plaintiff, 
had  consulted  him  in  reference  to  the  plaintiff's  interests  in  this  rail- 
road company,  and  as  a  director  of  the  company  he  stood  in  some  sort 
as  a  representative  and  trustee  of  the  plaintiff,  who  was  in  a  foreign 
country,  and  without  any  authorized  agent  here.  The  proposition 
that  every  stockholder  should  subscribe  new  stock  to  the  extent  of  ten 
per  cent,  was  designed,  and  as  the  event  proved,  was  well  designed,  to 
retrieve  the  fortunes  of  the  company;  but  it  was  necessary  to  its 
success  that  every  stockholder  should  come  into  the  arrangement.  The 
emergency  was  pressing,  and  Mr.  Fisher,  manifestly  acting  in  perfect 
good  faith,  made  the  subscription  for  the  plaintiff,  which  he  believed 
the  plaintiff  would  not  hesitate  to  make  if  personally  present. 

When  the  plaintiff  was  fully  informed  that  a  sagacious  financier, 
to  whom  his  chosen  friends  and  correspondents  had  referred  his  in- 


90  PHILADELPHIA,   W.   &   B.   R.   CO.   V.   COWELL.      [CHAP.   III. 

lerests,  and  who  stood  in  the  fiduciary  relation  of  a  director,  had 
pledged  him  for  a  new  subscription,  which  circumstances  seemed  to 
justify  and  demand,  I  say  not  that  he  was  bound  by  it,  nor  even  that 
he  was  bound  to  repudiate  it,  but  that  his  delay  for  near  seven  years, 
either  to  approve  or  repudiate,  was  a  fact  fit  to  be  considered  by  a 
jury  on  the  question  of  ratification.  The  subscription  was  made  in 
the  plaintiff's  name,  and  accepted  by  the  company  as  his;  and  it 
does  not  appear  that  they  knew  Eisher  was  acting  without  authority. 
The  offer  was  to  show  that  it  was  highly  beneficial  to  the  plaintiff.  It 
was,  then,  such  an  act  as  is  capable  in  law  of  being  ratified.  The 
plaintiff  might  make  it  his  own  by  adoption.  Did  he  adopt  it  ?  He 
did,  if  he  ever  gave  it  mental  assent.  How  could  the  company  show 
assent  by  anything  short  of  a  written  agreement,  if  not  by  evidence 
of  the  nature  of  that  in  the  bill  of  exception  ?  The  medium  of  proof, 
where  a  mental  purpose  is  the  object  of  inquiry,  must  conform  to  the 
mode  of  manifestation.  To  say  that  you  may  prove  assent,  but  may 
not  give  the  circumstances  in  evidence  from  which  it  is  to  be  implied, 
is  to  say  nothing. 

Strongly  persuasive  as  we  consider  the  offered  evidence,  we  do  not 
put  our  judgment  so  much  upon  the  strength  as  upon  the  nature  of 
it.  We  think  it  was  calculated  to  convince  a  jury  that  the  plaintiff 
did  indeed  assent  to  and  approve  of  what  Mr.  Fisher  had  done  in  his 
behalf,  and  therefore  it  should  have  been  received  and  submitted. 

If  they  should  find  from  it  the  assent  and  ratification  of  the  plain- 
tiff, the  subscription  became,  as  between  him  and  the  company,  a 
valid  contract,  and  on  his  failure  to  pay  the  instalments,  the  com- 
pany had  a  right  to  apply  thereto  the  accruing  dividends  on  his  old 
stock. 

When  he  pays  what  remains  unpaid  on  the  instalments,  he  will 
be  entitled  to  his  certificates  of  stock. 

The  defence  under  the  Statute  of  Limitations  was  not  well  taken. 
It  may  be  well  doubted  whether,  under  our  Acts-  of  Assembly,  any 
incorporated  company  can  set  up  the  Statute  of  Limitations  against 
a  stockholder's  dividends.  It  certainly  cannot  be  done  until  after  a 
demand  and  refusal,  or  notice  to  a  shareholder  that  his  right  to  divi- 
dends is  denied.  But  here,  so  far  from  such  notice  having  been  given, 
the  company  recognize  the  plaintiff's  right  to  the  dividends,  and 
claim  to  have  applied  them  to  his  use.  The  statute  can  have  no  place 
in  such  a  defence. 

The  judgment  is  reversed  and  a  venire  de  novo  awarded.^ 

1  "  If,  after  knowledge  of  what  the  agent  had  done,  the  principal  made  no  objec- 
tion for  an  unreasonable  time,  a  ratification  would  result  by  operation  of  law. 
What  is  a  period  long  enough  to  bring  about  such  a  result  would  usually  be  a 
nuestion  for  the  jury,  depending  upon  the  peculiar  circumstances  of  each  case. 
But,  in  proceeding  to  recover  the  land  and  set  aside  the  deed,  the  pleadings  of  the 
principal  may  themselves  allege  enough  to  show  a  ratification  results  as  matter  of 
law.  ...  If  there  be  a  good  and  sufficient  explanation  as  to  why  the  principal  did 
not  linow  of  the  transaction,  or  had  been  unable  to  discover  it,  or  if  there  be  an 


CHAP.   III.]  AS8ENT  MAY  BE   EXPRESS  OR  IMPLIED.  91 

EBERTS   V.    SELOVER. 
44  Mich.  519.     1880. 

Assumpsit  to  recover  ten  dollars  as  subscription  price  of  a  book. 
Defendant  tenders  $4.27.  Judgment  for  defendant.  Plaintiffs  bring 
error. 

CooLEY,  J.  This  is  an  action  brought  to  recover  the  subscription 
price  of  a  local  history.  The  subscription  was  obtained  by  an  agent 
of  the  plaintiffs,  and  defendant  signed  his  name  to  a  promise  to  pay 
ten  dollars  on  the  delivery  of  the  book.  This  promise  was  printed 
in  a  little  book,  made  use  of  for  the  purpose  of  obtaining  such  sub- 
scriptions, and  on  the  opposite  page,  in  sight  of  one  signing,  was  a 
reference  to  "  rules  to  agents,"  printed  on  the  first  page  of  the  book. 
One  of  these  rules  was  that  "  no  promise  or  statement  made  by  an 
agent  which  interferes  with  the  intent  of  printed  contract  shall  be 
valid,"  and  patrons  were  warned  under  no  circumstances  to  permit 
themselves  to  be  persuaded  into  signing  the  subscription  unless  they 
expected  to  pay  the  price  charged.  From  the  evidence,  it  appears 
that  when  Schenck,  the  agent,  solicited  his  subscription,  the  defendant 
was  not  inclined  to  give  it,  but  finally  told  the  agent  he  would  take 
it  provided  his  fees  in  the  office  of  justice,  then  held  by  him,  which 
should  accrue  from  that  time  to  the  time  of  delivery  of  the  book 
should  be  received  as  an  equivalent.  The  agent  assented,  and  defend- 
ant signed  the  subscription,  receiving  at  the  same  time  from  the  agent 
the  following  paper :  — 

CoLDWATEB,  April  29,  1878. 
Mr.  Isaac  M.  Selover  gives  his  order  for  one  copy  of  our  history,  for  which 
he  agrees  to  pay  on  delivery  all  the  proceeds  of  his  office  as  justice  from  now 
till  the  delivery  of  said  history. 

Ebebts  &  Abbott,  per  Schenck. 

The  plaintiffs  claim  that  the  history  was  duly  delivered,  and  they 
demand  the  subscription  price,  repudiating  the  undertaking  of  the 
agent  to  receive  anything  else,  as  being  in  excess  of  his  authority,  and 
void.  The  defendant  relies  on  that  undertaking,  and  has  brought 
into  court  $4.27  as  the  amount  of  his  fees  as  justice  for  the  period 
named.  This  statement  of  facts  presents  the  questions  at  issue  so 
far  as  they  concern  the  merits. 

It  may  be  perfectly  true,  as  the  plaintiffs  insist,  that  this  under- 
taking of  the  agent  was  in  excess  of  his  authority ;  that  the  defendant 
was  fairly  notified  by  the  entries  in  the  book  of  that  fact,  and  that 
consequently  the  plaintiffs  were  not  bound  by  it,  unless  they  subse- 

excuse  for  delay  In  bringing  the  suit,  these  facts  would  have  to  be  specially  averred 
in  order  to  prevent  the  defendant  from  taking  advantage  of  the  acquiescence  Im- 
plied by  non-action  for  a  long  lapse  of  time."    Whitley  v.  James,  121  Ga.  521. 


92  EBERTS   V.   SELOVEE.  [CHAP.   III. 

quently  ratified  it.  Unfortunately  for  their  case,  the  determination 
that  the  act  of  the  agent  in  giving  this  paper  was  void  does  not  by  any 
means  settle  the  fact  of  defendant's  liability  upon  the  subscription. 

The  plaintiffs'  case  requires  that  they  shall  make  out  a  contract 
for  the  purchase  of  their  book.  To  do  this,  it  is  essential  that  they 
shove  that  the  minds  of  the  parties  met  on  some  distinct  and  definite 
terms.  The  subscription  standing  alone  shows  this,  for  it  shows, 
apparently,  that  defendant  agreed  to  take  the  book  and  pay  therefor 
on  delivery  the  sum  of  ten  dollars.  But  the  contemporaneous  paper 
given  back  by  the  agent  constitutes  a  part  of  the  same  contract,  and 
the  two  must  be  taken  and  considered  together.  Bronson  v.  Green, 
Walk.  Ch.  56;  Dudgeon  v.  Haggart,  17  Mich.  273.  Taking  the  two 
together  it  appears  that  the  defendant  never  assented  to  any  purchase 
except  upon  the  terms  that  the  plaintiffs  should  accept  his  justice's 
fees  for  the  period  named  in  full  payment  for  the  book.  If  this  part 
of  the  agreement  is  void,  the  whole  falls  to  the  ground,  for  defendant 
has  assented  to  none  of  which  this  is  not  a  part. 

When  plaintiffs  discovered  what  their  agent  had  done,  two  courses 
were  open  to  them :  to  ratify  his  contract,  or  to  repudiate  it.  If  they 
ratified  it,  they  must  accept  what  he  agreed  to  take.  If  they  repu- 
diated it,  they  must  decline  to  deliver  the  book  under  it.  But  they 
cannot  ratify  so  far  as  it  favors  them,  and  repudiate  so  far  as  it  does 
not  accord  with  their  interests.  They  must  deal  with  the  defendant's 
undertaking  as  a  whole,  and  cannot  make  a  new  contract  by  a  selection 
of  stipulations  to  which  separately  he  has  never  assented. 

The  judgment  must  be  affirmed  with  costs.^ 

*  Plaintiffs'  agent  sold  to  defendant  a  piano  and  agreed  that  It  should  be  paid 
for  out  of  certain  commissions  that  might  become  due  from  the  agent  to  defendant 
on  future  stock  transactions.  Plaintiffs  bring  an  action  for  the  price  of  the  piano. 
Held:  "  When  the  plaintiffs  were  informed  of  the  terms  of  the  contract  made  by 
their  agent  for  the  sale  of  the  piano  to  the  defendant,  they  had  an  election  to  repudi- 
ate the  arrangement,  and  by  tendering  back  what  they  had  received  In  ignorance  of 
the  terms  of  the  sale,  and  demanding  the  piano,  they  could  have  recovered  it  by 
an  action  of  replevin,  or  obtained  its  value  in  trover.  But,  knowing  the  terms  of 
the  sale,  they  elected  to  sue  in  assumpsit  on  the  contract  for  the  agreed  price,  and 
thereby  they  affirmed  the  contract  and  ratified  the  act  of  the  agent  precisely  as  If 
it  had  been  expressly  approved  upon  being  reported  to  them  by  the  agent  or  the 
defendant ;  and  in  contemplation  of  law  a  subsequent  ratification  and  adoption  of  an 
act  has  relation  back  to  the  time  of  the  act  and  is  tantamount  to  a  prior  command. 
1  American  Leading  Cases,  4th  ed.,  592. 

"  The  argument  for  the  plaintiffs  (though  it  is  not  so  stated)  seems  really  to  in- 
volve the  fallacious  assumption  that  the  plaintiffs  could  affirm  the  contract  in  part 
and  repudiate  it  in  part,  that  is,  that  the  contract  is  to  be  treated  as  good  for  the 
agreed  price,  but  bad  as  to  the  agreed  mode  of  payment.  But  the  law  requires  a 
contract  to  be  affirmed  or  repudiated  in  its  entirety.  Shepard  v.  Palmer,  6  Conn. 
100 ;  Newell  v.  Hulburt,  2  Vt.  3.51.     See  also  the  cases  hereinafter  cited. 

"  There  was  no  contract  at  all  relative  to  the  piano  except  the  one  made  by  Day 
as  their  agent,  and  when  the  plaintiffs,  knowing  the  facts,  sued  on  that  contract, 
they  affirmed  It  in  every  essential  particular  both  as  to  price  and  as  to  the  terms  of 
paying  the  price."  Shoninger  v.  Peabody,  57  Conn.  42.  Compare  Stewart  v.  Wood- 
ward, 50  Vt.  78,  post,  p.  321. 


CHAP.   III.]  ASSENT  MAY   BE   EXPRESS   OR  IMPLIED.  93 

COMBS   V.   SCOTT  et  al. 

12  Allen    (Mass.)    493.     1866. 

Contract,  for  compensation  agreed  to  be  paid  plaintiff  for  his  ser- 
vices in  procuring  two  recruits  as  a  part  of  the  quota  of  the  town  of 
Hawley.    Verdict  for  plaintiff.     Defendants  allege  exceptions. 

The  court  charged  that,  as  to  ratification,  "  if  there  was  a  material 
mistake,  it  makes  no  difference  how  it  arose,  or  whether  defendants 
might  have  ascertained  the  contrary  to  be  true,  unless  it  arose  from 
the  negligence  of  the  defendants." 

BiGELOW,  C.  J.  (after  deciding  that  the  services  were  not  illegal). 
But,  upon  another  point,  we  are  of  opinion  that  the  exceptions  of  the 
defendants  are  well  taken.  In  instructing  the  jury  on  the  question 
of  ratification  by  the  defendants  of  the  contract  alleged  to  have  been 
made  by  their  agent  in  excess  of  the  authority  granted  to  him,  the 
judge  in  effect  told  the  jury  that  such  ratification  would  be  binding 
on  the  defendants,  though  made  under  a  material  misapprehension 
of  facts,  if  such  misapprehension  arose  from  the  negligence  or  omis- 
sion of  the  defendants  to  make  inquiries  relative  to  the  subject- 
matter.  In  tbe  broad  and  general  form  in  which  this  instruction 
was  given,  we  are  of  opinion  that  it  did  not  correctly  state  the  rule 
of  law,  and  that  the  jury  may  have  been  misled  by  it  in  the  con- 
sideration of  this  part  of  the  case. 

The  general  rule  is  perfectly  well  settled,  that  a  ratification  of  the 
unauthorized  acts  of  an  agent,  in  order  to  be  effectual  and  binding 
on  the  principal,  must  have  been  made  with  a  full  knowledge  of  all 
material  facts,  and  that  ignorance,  mistake  or  misapprehension  of 
any  of  the  essential  circumstances  relating  to  the  particular  transac- 
tion alleged  to  have  been  ratified,  will  absolve  the  principal  from  all 
liability  by  reason  of  any  supposed  adoption  of  or  assent  to  the 
previously  unauthorized  acts  of  an  agent.  We  know  of  no  qualifica- 
tion of  this  rule  such  as  was  engrafted  upon  it  in  the  instructions 
given  to  the  jury  in  the  present  case.  Nor,  after  considerable  re- 
search, have  we  been  able  to  find  that  such  qualification  has  ever 
been  recognized  in  any  approved  text-writer  or  adjudicated  case. 
And,  upon  consideration,  it  seems  to  us  to  be  inconsistent  with 
sound  principle. 

Ratification  of  a  past  and  completed  transaction,  into  which  an 
agent  has  entered  without  authority,  is  a  purely  voluntary  act  on 
the  part  of  a  principal.  No  legal  obligation  rests  upon  him  to  sanc- 
tion or  adopt  it.  No  duty  requires  him  to  make  inquiries  concerning 
it.  Where  there  is  no  legal  obligation  or  duty  to  do  an  act,  there 
can  be  no  negligence  in  an  omission  to  perform  it.  The  true  doctrine 
is  well  stated  by  a  learned  text-writer :  "  If  I  make  a  contract  in  the 


94  rOWLER  V.   TRULL.  [CHAP.   III. 

name  of  a  person  who  has  not  given  me  an  authority,  he  will  be  under 
no  obligation  to  ratify  it,  nor  will  he  be  bound  to  the  performance 
of  it."  1  Livermore  on  Agency,  44;  see  also  Paley  on  Agency,  171, 
note  0.  Whoever,  therefore,  seeks  to  procure  and  rely  on  a  ratifica- 
tion is  bound  to  show  that  it  was  made  under  such  circumstances  as 
in  law  to  be  binding  on  the  principal,  especially  to  see  to  it  that  all 
material  facts  were  made  known  to  him.  The  burden  of  making 
inquiries  and  of  ascertaining  the  truth  is  not  cast  on  him  who  is 
under  no  legal  obligation  to  assume  a  responsibility,  but  rests  on  the 
party  who  is  endeavoring  to  obtain  a  benefit  or  advantage  for  himself. 
This  is  not  only  just,  but  it  is  practicable.  The  needful  information 
or  knowledge  is  always  within  the  reach  of  him  who  is  either  party 
or  privy  to  a  transaction  which  he  seeks  to  have  ratified,  rather  than 
of  him  who  did  not  authorize  it,  and  to  the  details  of  which  he  may 
be  a  stranger. 

We  do  not  mean  to  say  that  a  person  can  be  wilfully  ignorant,  or 
purposely  shut  his  eyes  to  means  of  information  within  his  own  pos- 
session and  control,  and  thereby  escape  the  consequences  of  a  ratifi- 
cation of  unauthorized  acts  into  which  he  has  deliberately  entered ; 
but,  our  opinion  is,  that  ratification  of  an  antecedent  act  of  an  agent 
which  was  unauthorized  cannot  be  held  valid  and  binding,  where  the 
person  sought  to  be  charged  has  misapprehended  or  mistaken  material 
facts,  although  he  may  have  wholly  omitted  to  make  inquiries  of  other 
persons  concerning  them,  and  his  ignorance  and  misapprehension 
might  have  been  enlightened  and  corrected  by  the  use  of  diligence 
on  his  part  to  ascertain  them.  The  mistake  at  the  trial  consisted  in 
the  assumption  that  any  such  diligence  was  required  of  the  defendants. 
On  this  point,  the  instructions  were  stated  in  a  manner  which  may 
have  led  the  jury  to  misunderstand  the  rights  and  obligations  of  the 
parties. 

Exceptions  sustained.^ 


FOWLEE   V.    TEULL. 

1  Hun    (N.  Y.)   409.     1874. 

Action  to  recover  a  balance  for  merchandise  sold  and  delivered  to 
defendant's  husband  acting,  as  is  claimed,  as  her  agent.    The  nego- 

>  "  When  a  person  deals  with  an  authorized  agent,  he  is  bound  to  inquire  and 
ascertain  the  extent  and  limit  of  his  authority  to  bind  the  principal,  and  the  prin- 
cipal is  bound  by  all  acts  of  the  agent  within  the  scope  of  his  authority ;  and  when 
a  principal  adopts  the  contract  of  a  self-constituted  agent,  who  has  assumed  to  act 
for  such  principal  without  authority  he  is  bound  to  inquire  and  ascertain  the  extent 
the  self-constituted  agent  assumed  to  act  in  his  behalf,  and  the  principal,  when 
he  becomes  such  by  adopting  his  acts,  is  bound  by  all  acts  within  the  scope  of  the 
assumed  authority ;  and  in  both  cases  the  liability  of  the  principal  extends  to  the 
frauds  or  misrepresentations  of  the  agent  committed  or  made  while  acting  within 
the  scope  of  the  real  or  assumed  authority."    Buscb  v.  Wilcox,  82  Mich.  336,  342. 


CHAP.    UI.]  ASSENT   MAY    BE    EXPRESS   OR   IMPLIED.  95 

tiations  were  conducted  by  the  husband  with  the  plaintiff.  The  sum 
of  $200  was  paid  in  cash,  and  the  balance  secured  by  the  note  of  the 
defendant,  a  mortgage  being  assigned  by  her  as  collateral  security 
thereto,  and  by  a  chattel  mortgage  given  by  her  on  the  goods  pur- 
chased, containing  the  usual  covenant  to  pay  the  amount  secured. 
Judgment  for  plaintiff. 

Miller,  P.  J.  It  appears  from  the  evidence  in  this  case,  that  the 
defendant's  husband  made  the  purchase  of  the  property  and  took  a 
bill  of  sale,  of  the  same,  in  the  name  of  his  wife,  the  defendant, 
without  any  authority  from  her,  and  without  her  knowledge;  that 
she  never  took  possession  of  the  property,  and  that  the  business  was 
carried  on  in  his  name  afterward,  and  not  for  the  benefit  of  the 
wife's  separate  estate.  If  there  were  no  other  facts  connected  with 
the  transaction;  there  would  be  no  question  that  the  defendant  was 
not  liable.  But  it  appears  that  the  defendant  gave  her  own  note, 
and  assigned  mortgages  as  collateral  security  for  a  portion  of  the 
purchase  money,  which  note  was  afterwards  paid,  and  that  she  also 
executed  a  chattel  mortgage  on  the  property  sold,  to  secure  the 
balance  which  remained  unpaid  upon  the  sale.  It  is  also  proved 
that  subsequently,  and  on  the  15th  day  of  November,  1870,  she  exe- 
cuted another  chattel  mortgage  to  one  Crawford,  upon  the  same 
property.  By  these  acts,  she  assumed  ownership  and  control  over 
the  property  sold,  and,  I  think,  ratified  what  her  husband  had  done 
on  her  behalf  at  the  sale,  claiming,  as  he  did,  according  to  the 
plaintiff's  testimony,  to  act  as  her  agent.  It  is  true,  that  the  de- 
fendant testifies  that  her  husband  had  no  authority;  that  she  did 
not  know  what  she  was  signing,  when  she  executed  the  chattel 
mortgages;  and  that  the  one  given  to  Crawford  was  without  con- 
sideration. This,  however,  does  not  relieve  the  defendant,  and, 
inasmuch  as  she  voluntarily  signed  these  papers,  in  the  absence  of 
misrepresentation  or  fraud,  with  ample  opportunity  for  information 
as  to  their  contents,  the  effect  cannot  be  avoided  upon  the  ground  of 
negligence,  or  omission  to  read,  or  to  avail  herself  of  such  informa- 
tion. Breese  v.  TJ.  S.  Telegraph  Co.,  48  N.  Y.  132.  There  is  no 
sufficient  ground  for  claiming  that  the  defendant's  signature  was 
procured  by  fraud,  and  the  mortgages  as  executed  are  far  more 
than  presumptive  evidence,  and,  I  think,  must  be  regarded  as  a 
ratification  of  the  acts  of  her  husband,  even  if  he  acted  without 
authority  originally.  Story  on  Agency,  283,  and  a  ratification  of  at 
least  a  part  of  an  unauthorized  transaction  of  an  agent,  or  of  one 
who  assumes  to  act  as  such,  which  amounts  to  a  confirmation  of  the 
whole,  and  binds  the  principal.  Farmers'  L.  &  T.  Co.  v.  Walworth, 
1  X.  Y.  433.  As  no  fraud  was  shown,  and,  as  the  defendant,  by 
writing,  adopted  the  representations  made  by  her  husband  when  the 
contract  of  sale  was  made,  she  is  estopped  from  denying  her  liability. 
If  the  views  expressed  are  correct,  then  proof  of  the  husband's  declar- 


96  TRUSTEES,   &C.,   OF   EASTHAMPTON   V.   BOWMAN.      [CHAP.   III. 

ation  to  the  plaintiff,  at  the  time  of  the  sale,  was  proper,  as  the 
agency  of  the  husband  was  ratified  by  the  subsequent  acts  of  the 
defendant,  and  there  was  no  error,  either  in  receiving  or  in  refusing 
to  strike  out,  this  testimony. 

The  judgment  was  right  and  must  be  affirmed,  with  costs. 

Present:   Milleb^  P.  J.,  Bockes  and  Boardman,  J  J. 

Judgment  affirmed  with  costs. 


TRUSTEES,   &c.,    OF   EASTHAMPTON   v.   BOWMAN. 

136  N.  Y.  521.     1893. 

Action  to  set  aside  a  deed  purporting  to  be  given  by  the  Trustees, 
&c.,  of  Easthampton,  through  one  Dominy,  to  the  defendant.  Judg- 
ment for  plaintiff.    Defendant  appeals. 

Earl,  J.  (after  deciding  that  the  deed  was  unauthorized).  But 
the  main  defence  relied  upon  by  the  defendant  at  the  trial,  and  now 
relied  upon,  grows  out  of  the  facts  now  to  be  stated.  The  defendant 
paid  Dominy  for  the  land  $200,  which  he  kept  and  appropriated  to 
his  own  use.  In  August,  1884,  the  trustees  of  the  town  then  in  office 
commenced  a  suit  against  the  persons  who  were  trustees  during  the 
3'ear  in  which  the  deed  to  the  defendant  was  given,  to  compel  them 
to  account  for  and  pay  over  certain  moneys  belonging  to  the  town, 
and  in  that  action,  among  other  claims  made  against  Dominy  as  a 
defendant  therein,  the  plaintiff  claimed  to  recover  the  $200,  paid 
to  him  by  the  defendant.  That  action  was  tried  and  proceeded  to 
judgment,  and  the  plaintiff,  among  other  things,  recovered  judgment 
against  Dominy  for  that  $200,  and  execution  upon  that  judgment  was 
issued  against  him  and  returned  unsatisfied.  Thus  the  town  has 
failed  to  collect  or  receive  the  money  paid  to  Dominy  by  the  defend- 
ant for  the  land.  The  claim  on  the  part  of  the  defendant  is  that  the 
plaintiff  in  that  action  proceeded  to  judgment  and  execution,  know- 
ing that  the  deed  was  executed  without  authority,  and  that  the  money 
was  received  by  Dominy  without  authority,  and  that  thus  it  ratified 
Dominy's  unauthorized  act,  and  became  bound  thereby.  It  is  quite 
true  that  the  trustees  acting  for  the  town,  and  clothed  with  authority 
to  convey  these  lands,  could  ratify  the  unauthorized  conveyance  which 
had  already  been  made  to  the  defendant,  and  that  the  town  could  be 
l)ound  by  their  ratification.  But  before  a  principal  can  be  held  to 
have  ratified  the  unauthorized  act  of  an  assumed  agent  he  must  have 
full  knowledge  of  the  facts,  so  that  it  can  be  said  that  he  intended 
to  ratify  the  act.  If  his  knowledge  is  partial  or  imperfect  he  will  not 
]>c  held  to  have  ratified  the  unauthorized  act,  and  the  proof  of  adequate 
knowledge  of  the  facts  should  be  reasonably  clear  and  certain,  par- 


CHAP.   III.]  ASSENT   MAY  BE   EXPRESS   OR  IMPLIED.  97 

ticularly  in  a  case  like  this,  where,  so  far  as  the  record  discloses,  no 
substantial  harm  has  come  to  the  defendant  from  the  delay  or  the 
acts  of  the  principal.  In  this  case  it  is  found,  and  appears  from  the 
evidence  clearly,  that  the  trustees  who  brought  the  action  against 
Dominy  and  others  for  the  accounting,  had  at  and  before  the  com- 
mencement of  the  action  no  knowledge  whatever  of  the  fraud  per- 
petrated upon  the  town  by  the  unauthorized  execution  of  the  deed. 
During  the  progress  of  the  trial  of  that  action,  however,  there  was 
some  evidence  tending  to  show  the  unauthorized  execution  of  the  deed 
by  Dominy;  but  the  proof  was  given  by  the  defendants,  who  were 
resisting  payment  to  the  plaintiff  in  that  action,  and,  as  the  trial 
judge  found,  the  trustees  of  the  town  did  not  believe  that  evidence 
thus  given  by  the  parties  sued  in  their  defence  to  that  action,  and  it 
is  found  that  they  proceeded  to  judgment  and  execution  in  ignorance 
of  the  fraud  which  had  been  perpetrated  by  Dominy  upon  the  town. 
We  do  not,  therefore,  think  that  the  ratification  on  the  part  of  the 
town  by  its  trustees  was  so  clearly  and  unequivocally  established  that 
we  would  be  authorized  to  reverse  this  judgment.  Before  a  municipal 
corporation  can  be  held  to  have  ratified  the  unauthorized  act  of  its 
officers  or  assumed  agents,  the  rule  should  be  strictly  enforced  that  the 
facts  constituting  the  ratification  should  be  fully  and  clearly  proved, 
so  that  it  can  fairly  be  said  that  there  was  an  intention  to  confirm  the 
unauthorized  act  and  receive  the  fruits  thereof.  Here  there  is  no 
conclusive  proof  to  that  effect. 

But  as  the  plaintiff  now  holds  a  judgment  against  Dominy  in  which 
the  $200  paid  to  him  by  the  defendant  is  included,  we  think  that  as 
a  condition  of  relief  in  this  action  it  should  be  required  to  assign  so 
much  of  that  judgment  as  relates  to  the  $200  to  the  defendant. 

Our  conclusion,  therefore,  is  that  the  judgment  entered  at  the 
Special  Term  should  be  so  far  modified  as  to  require  the  plaintiff 
to  assign  to  the  defendant  so  much  of  the  judgment  recovered  by  it 
against  Dominy  as  represents  the  $200  paid  by  the  defendant  to  him, 
and  as  thus  modified  it  should  be  affirmed,  with  costs. 

All  concur.  Judgment  accordingly.^ 


KELLEY   V.   NEWBURYPORT   HORSE   RAILROAD    CO. 

141  Mass.  496.     1886. 

Contract,  upon  certain  promissory  notes  alleged  to  have  been 
made  by  defendant  corporation  to  K.  and  B.,  or  order,  and  indorsed 
to  plaintiff.    Verdict  for  plaintiff.    Defendant  alleges  exceptions. 

»  Compare  Hyatt  v.  Clark,  118  N.  Y.  563,  ante,  p.  76. 
7 


98  KELLEY   V.    NEWBDRYPORT.  HORSE   R.    R.    CO.      [CIIAP.    III. 

C.  Allen,  J.  (after  disposing  of  another  point).  The  defendant 
then  contends  that  the  notes  in  suit  cannot  be  enforced,  because  they 
were  given  to  its  own  directors  in  payment  for  the  construction  of 
the  road  by  them,  and  are  now  held  by  the  plaintiff  subject  to  all 
defences  which  might  have  been  made  to  a  suit  upon  them  by  the 
payees.  Upon  this  point,  the  only  question  properly  before  us  is, 
whether  there  was  sufficient  evidence  to  warrant  the  jury  in  finding 
a  ratification  of  the  notes  by  the  corporation.  The  presiding  judge 
assumed  that  the  notes  were  originally  void,  and  submitted  to  the 
jury  the  single  question  of  ratification.  Being  of  opinion  that  there 
was  sufficient  evidence  to  warrant  the  verdict  on  the  question  of  rati- 
fication, we  have  no  occasion  to  consider  whether  it  might  not  also 
have  been  proper  to  submit  to  the  jury,  under  proper  instructions,  the 
question  of  the  original  validity  of  the  notes. 

The  first  request  for  instructions  was  properly  refused.  It  seems 
to  refer  to  a  supposed  theory  of  the  plaintiff  that  the  notes  might  be 
ratified  by  the  directors,  whereas  the  sole  question  submitted  to  the 
jury  was  whether  they  had  been  ratified  by  the  stockholders,  that  is, 
by  the  corporation  itself. 

The  third  request  is  open  to  the  same  objection. 

The  second  request  sought  to  incorporate  into  the  doctrine  of  rati- 
fication a  new  element,  namely,  that,  in  order  to  make  a  valid  rati- 
fication, the  principal  must  have  known,  not  only  all  the  facts,  but 
also  the  legal  effect  of  the  facts,  and  then,  with  a  knowledge  both  of 
the  law  and  facts,  have  ratified  the  contracts  by  some  independent  and 
substantive  act.  This  request  also  was  properly  refused.  It  is  suffi- 
cient if  a  ratification  is  made  with  a  full  knowledge  of  all  the  material 
facts.  Indeed,  a  rule  somewhat  less  stringent  than  this  may  prop- 
erly be  laid  down,  when  one  purposely  shuts  his  eyes  to  means  of 
information  within  his  own  possession  and  control,  and  ratifies  an 
act  deliberately,  having  all  the  knowledge  in  respect  to  it  which  he 
cares  to  have.  Combs  v.  Scott,  12  Allen,  493,  497;  Phosphate  of 
Lime  Co.  v.  Green,  L.  E.  7  C.  P.  43,  57. 

The  fourth  and  fifth  requests  were  both  to  the  effect  that,  on  all 
the  evidence,  the  jury  would  not  be  warranted  in  finding  a  ratifica- 
tion. The  circumstances  of  the  case  were  such  as  to  render  the  in- 
ference of  ratification  natural  and  easy,  especially  in  view  of  the 
lapse  of  time  since  the  notes  were  given.  There  was  uncontradicted 
evidence  tending  to  show  that  the  directors  made  a  contract  with  one 
Gowan  for  building  the  road  for  a  certain  price  in  money  and  stock, 
and  that  he  gave  to  the  company  a  bond,  with  Kelley  and  Binney  as 
sureties,  for  the  faithful  performance  of  his  contract.  Gowan  fail- 
ing to  perform  his  contract,  the  board  of  directors  called  on  the 
sureties,  who  themselves  were  directors,  to  perform  it,  with  notice 
that  they  would  be  held  liable  to  the  company  for  all  damages  that 
might   accrue   to   the  company  by  their   default.     Thereupon   the 


CHAP.    III.]       RIGHT   TO    RECEDE   BEFORE   RATIFICATION.  99 

sureties  proceeded  to  finish  the  road,  according  to  the  contract,  in 
which  originally  they  had  no  interest.  The  price  was  fair  and  reason- 
able ;  the  road  as  completed  by  them  was  a  well-built  road ;  the  ad- 
vancements made  by  them  were  in  consequence  of  the  notice  given 
to  them  by  the  directors,  and  not  with  any  fraudulent  design  to  obtain 
any  pecuniary  benefit  for  themselves  from  said  contract.  The  settle- 
ment was  made  with  them  by  the  directors,  under  authority  of  a 
general  vote  of  the  stockholders  authorizing  them  to  make  any  settle- 
ment, and  the  notes  in  suit  were  given. 

As  a  general  rule,  a  contract  between  a  corporation  and  its  direc- 
tors is  not  absolutely  void,  but  voidable  at  the  election  of  the  corpora- 
tion. Such  a  contract  does  not  necessarily  require  any  independent 
and  substantive  act  of  ratification,  but  it  may  become  finally  estab- 
lished as  a  valid  contract  by  acquiescence.  The  right  to  avoid  it  may 
be  waived.  Union  Pacific  Eailroad  v.  Credit  Mobilier,  135  Mass.  367, 
376;  Twin-Lick  Oil  Co.  v.  Marbury,  91  U.  S.  587;  Hotel  Co.  v. 
Wade,  97  U.  S.  13 ;  Ashhurst's  Appeal,  60  Penn.  St.  290.  In  the 
present  case,  such  ratification  or  waiver  might  well  be  inferred,  and 
indeed  we  do  not  see  how  any  other  inference  could  fairly  be  drawn, 
from  the  act  of  the  company  in  holding  and  operating  the  road  for 
so  many  years  without  taking  any  steps  to  repudiate  the  notes,  from 
the  payment  of  interest,  from  the  acceptance  of  the  report  of  the 
treasurer  on  October  6,  1875,  and  October  2,  1878,  in  which  these 
notes  were  referred  to  as  outstanding  obligations,  and  from  the 
acceptance  of  the  Statute  of  1884,  c.  159,  authorizing  the  company  to 
issue  bonds  to  an  amount  not  exceeding  $30,000  for  the  purpose  of 
extinguishing  its  floating  debt. 

Exceptions  overruled. 


3.    Right  of  Other  Party  to  Recede  before  Ratification. 
WALTER   V.   JAMES. 

L.  R.  6  Exch.  124.     1871. 

Action  on  an  attorney's  bill  to  recover  £63  17s.  $d.  Defendant 
paid  into  court  £3  17s.  3d.,  and  to  the  residue  pleaded  payment.  Ver- 
dict for  defendant,  with  leave  to  plaintiff  to  move  to  enter  the  verdict 
I  for  him,  the  court  to  have  power  to  draw  inferences  of  fact.  Eule 
obtained  accordingly. 

Plaintiff'  had  a  claim  against  defendant.  One  Southall,  after  his 
authority  had  been  revoked,  paid  plaintiff  £60  in  satisfaction  of  the 
claim.  Subsequently,  by  agreement  between  Southall  and  plaintiff, 
the  money  was  returned  to  Southall.    No  evidence  of  defendant's  rati- 


100  WALTER  V.   JAMES.  [CIIAP.   III. 

fication  before  plea  in  this  action  was  given.  The  trial  court  ruled 
that  defendant  could  take  advantage  of  Southall's  payment. 

Kelley,  C.  B.  Southall,  in  paying  the  debt,  appeared  to  act  as 
the  defendant's  agent;  but  it  turned  out  afterwards  that,  although 
he  had  originally  been  authorized  by  the  defendant  to  come  to  an  ar- 
rangement with  the  plaintiff,  and  to  make  this  payment,  that  authority 
had  been  revoked  before  the  payment  was  made.  He  did  not,  how- 
ever, communicate  to  the  plaintiff  that  he  had  no  authority;  on  the 
contrary,  he  professed  to  act  for  the  defendant,  and  the  plaintiff 
believed  him  to  be  so  acting,  and  received  the  sum  paid  in  full  satis- 
faction of  his  debt.  But  when  the  plaintiff  found  that  the  money  had 
been  paid  without  the  defendant's  authority,  he  returned  the  money 
to  Southall.  And  now  the  question  is,  whether  the  defendant  can  by 
his  plea  of  payment  adopt  and  ratify  the  act  of  Southall,  although 
before  action  that  act  had,  by  arrangement  between  the  plaintiff  and 
Southall,  been  undone. 

Now,  the  law  is  clear,  that  where  one  makes  a  pajonent  in  the 
name  and  on  behalf  of  another  without  authority,  it  is  competent  for 
the  debtor  to  ratify  the  payment ;  and  there  seems  to  be  no  doubt  on 
the  authorities  that  he  can  ratify  after  action  by  placing  the  plea  of 
payment  on  the  record.  Prima  facie,  therefore,  we  have  here  a 
ratification  of  the  payment  by  the  defendant's  plea ;  but  whether  the 
payment  was  then  capable  of  ratification  depends  on  whether  previ- 
ously it  was  competent  to  the  plaintiff  and  Southall,  apart  from  the 
defendant,  to  cancel  what  had  taken  place  between  them.  I  am  of 
opinion  that  it  was  competent  to  them  to  undo  what  they  had  done. 
The  evidence  shows  that  the  plaintiff  received  the  money  in  satis- 
faction under  the  mistaken  idea  that  Southall  had  authority  from  the 
defendant  to  pay  him.  This  was  a  mistake  in  fact,  on  discovering 
which  he  was,  I  think,  entitled  to  return  the  money,  and  apply  to  his 
debtor  for  payment.  If  he  had  insisted  on  keeping  it,  the  defendant 
might  at  any  moment  have  repudiated  the  act  of  Southall,  and 
Southall  would  then  have  been  able  to  recover  it  from  the  plaintiff 
as  money  received  for  Southall's  use.  I  am,  therefore,  of  opinion 
that  the  plaintiff,  who  originally  accepted  this  money  under  an  entire 
misapprehension,  was  justified  in  returning  it,  the  position  of  the 
parties  not  having  been  in  the  meantime  in  any  way  altered,  and  that 
the  defendant's  plea  of  payment  fails.  The  rule  must  accordingly  be 
made  absolute. 

Martin,  B.  I  am  of  the  same  opinion.  The  rule  which  I  conceive 
to  be  the  correct  one  may  be  stated  as  follows :  When  a  payment  is  not 
made  by  way  of  gift  for  the  benefit  of  the  debtor,  but  by  an  agent  who 
intended  that  he  should  be  reimbursed  by  the  debtor,  but  who  had 
not  the  debtor's  authority  to  pay,  it  is  competent  for  the  creditor  and 
the  person  paying  to  rescind  the  transaction  at  any  time  before  the 
debtor  has  affirmed  the  payment,  and  repay  the  money,  and  there- 


I 


CHAP,    in.]       EIGHT  TO   RECEDE  BEFORE   RATIFICATION.  101 

upon  the  pa\Tnent  is  at  an  end,  and  the  debtor  again  responsible. 
This  being,  in  my  judgment,  the  true  rule,  the  plaintiff  in  this  case 
was  entitled  to  recover. 

Kelley,  C.  B.    My  Brother  Cleasby  concurs  in  the  judgment  of 
the  court. 

Rule  absolute. 


BOLTON  PARTNEES  v.   LAMBEET. 

41  Ch.  D.  (C.  A.)  295.     1889. 

Action  for  specific  performance  of  an  agreement  to  take  a  lease. 
Decree  for  plaintiff.     Defendant  appeals. 

Defendant  made  to  an  agent  of  plaintiff  an  offer  to  take  a  lease 
of  plaintiff's  premises.  The  agent,  without  authority,  accepted  the 
offer  in  behalf  of  the  company.  Later,  defendant  withdrew  his  offer, 
and,  later  still,  the  board  of  directors  of  the  plaintiff  company  rati- 
fied the  agent's  agreement. 

LiNDLEY,  L.  J.  .  .  .  The  question  is,  what  is  the  consequence  of 
the  withdrawal  of  the  offer  after  acceptance  by  the  assumed  agent, 
but  before  the  authority  of  the  agent  has  been  ratified  ?  Is  the  with- 
drawal in  time?  It  is  said  on  the  one  hand  that  the  ordinary  prin- 
ciple of  law  applies,  viz.,  that  an  offer  may  be  withdrawn  before 
acceptance.  That  proposition  is  of  course  true.  But  the  question  is, 
acceptance  by  whom?  It  is  not  a  question  whether  a  mere  offer  can 
be  withdrawn,  but  the  question  is  whether,  when  there  has  been  in 
fact  an  acceptance  which  is  in  form  an  acceptance  by  a  principal 
through  his  agent,  though  the  person  assuming  to  act  as  agent  has 
not  then  been  so  authorized,  there  can  or  cannot  be  a  withdrawal  of 
the  offer  before  the  ratification  of  the  acceptance?  I  can  find  no 
authority  in  the  books  to  warrant  the  contention  that  an  offer  made, 
and  in  fact  accepted  by  a  principal  through  an  agent  or  otherwise, 
can  be  withdrawn.  The  true  view,  on  the  contrary,  appears  to  be  that 
the  doctrine  as  to  the  retrospective  action  of  ratification  is  applicable. 

If  we  look  at  Mr.  Bricc's  argument  closely,  it  will  be  found  to  turn 
on  this,  —  that  the  acceptance  was  a  nullity,  and  unless  we  are  pre- 
pared to  say  that  the  acceptance  of  the  agent  was  absolutely  a  nullity, 
Mr.  Brice's  contention  cannot  be  accepted.  That  the  acceptance  by 
the  assumed  agent  cannot  be  treated  as  going  for  nothing  is  apparent 
from  the  case  of  Walter  v.  James,  Law  Eep.  6  Ex.  124.  I  see  no 
reason  to  take  this  case  out  of  the  application  of  the  general  principle 
as  to  ratification.    The  appeal  therefore  fails  on  all  points. 

Cotton,  L.  J.  .  .  .  But  then  it  is  said  that  on  the  13th  of  January, 
1887,  the  defendant  entirely  withdrew  the  offer  he  had  made.  Of 
course  the  withdrawal  could  not  be  effective,  if  it  were  made  after  the 


102  BOLTON    PARTNERS   V.    LAMBERT.  [CIIAP.    III. 

contract  had  become  complete.  As  soon  as  an  offer  has  been  ac- 
cepted the  contract  is  complete.  But  it  is  said  that  there  could  be 
a  withdrawal  by  the  defendant  on  the  13th  of  January  on  this  ground, 
that  the  offer  of  the  defendant  had  been  accepted  by  Scratchley,  a 
director  of  the  plaintiff  company,  who  was  not  authorized  to  bind 
the  company  by  acceptance  of  the  offer,  and  therefore  that  until  the 
company  ratified  Scratchley's  act  there  was  no  acceptance  on  behalf 
of  the  company  binding  on  the  company,  and  therefore  the  defend- 
ant could  withdraw  his  offer.  Is  that  so  ?  The  rule  as  to  ratification 
by  a  principal  of  acts  done  by  an  assumed  agent  is  that  the  ratification 
is  thrown  back  to  the  date  of  the  act  done,  and  that  the  agent  is  put 
in  the  same  position  as  if  he  had  had  authority  to  do  the  act  at  the 
time  the  act  was  done  by  him.  Various  cases  have  been  referred  to 
as  laying  down  this  principle,  but  there  is  no  case  exactly  like  the 
present  one.  The  case  of  Hagedorn  v.  Oliverson,  2  M.  &  S.  485,  is 
a  strong  case  of  the  application  of  the  principle.  It  was  there  pointed 
out  how  favorable  the  rule  was  to  the  principal,  because  till  ratification 
he  was  not  bound,  and  he  had  an  option  to  adopt  or  not  to  adopt 
what  had  been  done.  In  that  case  the  plaintiff  had  effected  an  in- 
surance on  a  ship  in  which  another  person  was  interested,  and  it  was 
held  that  long  after  the  ship  had  been  lost  the  other  person  might 
adopt  the  act  of  the  plaintiff,  though  done  without  authority,  so  as  to 
enable  the  plaintiff  to  sue  upon  the  policy.  Again,  in  Ancona  v. 
Marks,  7  H.  &  N.  686,  where  a  bill  was  indorsed  to  and  sued  on  in 
the  name  of  Ancona,  who  had  given  no  authority  for  that  purpose, 
yet  it  was  held  that  Ancona  could,  after  the  action  had  been  brought, 
ratify  what  had  been  done,  and  that  the  subsequent  ratification  was 
equivalent  to  a  prior  authority  so  as  to  entitle  Ancona  to  sue  upon  the 
bUl.  It  was  said  by  Mr.  Brice  that  in  that  case  there  was  a  previously 
existing  liability  of  the  defendant  toward  some  person;  but  the  lia- 
bility of  the  defendant  to  Ancona  was  established  by  Ancona's  au- 
thorizing and  ratifying  the  act  of  the  agent,  and  a  previously  existing 
liability  to  others  did  not  affect  the  principle  laid  down. 

The  rule  as  to  ratification  is  of  course  subject  to  some  exceptions. 
An  estate  once  vested  cannot  be  divested,  nor  can  an  act  lawful  at 
the  time  of  its  performance  be  rendered  unlawful  by  the  application 
of  the  doctrine  of  ratification.  The  case  of  Walter  v.  James,  Law 
Rep.  6  Ex.  124,  was  relied  on  by  the  appellant,  but  in  that  case  there 
was  an  agreement  between  the  assumed  agent  of  the  defendant  and 
the  plaintiff'  to  cancel  what  had  been  done  before  any  ratification  by 
the  defendant ;  in  the  present  case  there  was  no  agreement  made  be- 
tween Scratchley  and  the  defendant  that  what  had  been  done  by 
Scratchley  should  be  considered  as  null  and  void. 

The  case  of  Bird  v.  Brown,  4  Ex.  786,  which  was  also  relied  on  by 
the  appellant,  is  distinguishable  from  this  case.  There  it  was  held 
that  the  ratification  could  not  operate  to  divest  the  ownership  which 


CHAP.   III.]       RIGHT  TO   RECEDE   BEFORE   RATIFICATION.  103 

had  previously  vested  in  the  purchaser  by  the  delivery  of  the  goods 
before  the  ratification  of  the  alleged  stoppage  in  transitu.  So  also  in 
Lyell  I'.  Kennedy,  18  Q.  B.  D.  796,  the  plaintiff,  who  represented  the 
lawful  heir,  desired,  after  the  defendant  Kennedy  had  acquired  a  title 
to  the  estate  by  means  of  the  Statute  of  Limitations,  and  after  the 
title  of  the  heir  was  gone,  to  ratify  the  act  of  Kennedy  as  to  the  receipt 
of  rents,  so  as  to  make  the  estate  vest  in  the  heir.  In  my  opinion, 
none  of  these  cases  support  the  appellant's  contention. 

I  think  the  proper  view  is  that  the  acceptance  by  Scratchley  did 
constitute  a  contract,  subject  to  its  being  shown  that  Scratchley  had 
authority  to  bind  the  company.  If  that  were  not  shown,  there  would 
be  no  contract  on  the  part  of  the  company,  but  when  and  as  soon  as 
authority  was  given  to  Scratchley  to  bind  the  company,  the  authority 
was  thrown  back  to  the  time  when  the  act  was  done  by  Scratchley,  and 
prevented  the  defendant  withdrawing  his  offer,  because  it  was  then 
no  longer  an  offer,  but  a  binding  contract. 

This  point  therefore  must  also  be  decided  against  the  appellant. 
Another  point  was  raised  as  to  misrepresentation,  but,  having  regard 
to  the  evidence,  in  my  opinion  that  has  not  been  made  out.  The  appeal 
therefore  fails. 

Lopes,  L.  J.,  also  delivered  a  concurring  opinion. 

Appeal  dismissed.^ 


McCLINTOCK   V.    SOUTH   PENN   OIL   CO. 

146  Pa.  St.  144.     1892. 

Assumpsit  for  breach  of  contract  to  purchase  by  assignment  a  land 
contract  existing  between  plaintiff  and  one  Donaldson.  Judgment 
for  plaintiff.    Defendant  appeals. 

Plaintiff's  agent  made  the  sale  without  having  written  authority, 
and  indorsed  a  memorandum  of  it  upon  the  Donaldson  contract.  Sub- 
sequently plaintiff  ratified  the  act  in  writing  by  making,  signing,  and 
acknowledging  upon  the  Donaldson  contract  a  written  transfer  of  her 
interest  in  it.  Defendant  refused  to  accept  this  transfer  or  to  pay  the 
purchase  price.  Plaintiff,  relying  on  the  assignment,  did  not  perform 
the  conditions  of  the  Donaldson  contract,  nor  did  defendant,  and  it 
was  forfeited. 

'  "  We  are  of  opinion  that  T.  could  validly  ratify  and  adopt  the  contracts,  and, 
first  of  all,  that  he  could  do  so  notwithstanding  the  previous  repudiation  of  these 
contracts  by  the  buyers.  That  point  seems  to  be  covered  by  the  decision  in  Bolton 
Partners  v.  Lambert."   In  re  Tiedemann  and  Ledermann  Fr^res  [1890],  2  Q.  B.  66. 

"  The  principal,  upon  being  informed  of  an  act  of  his  agent  In  excess  of  his  au- 
thority, has  the  right  to  elect  whether  he  will  adopt  the  unauthorized  act,  or  not, 
and  so  long  as  the  condition  of  the  parties  Is  unchanged,  he  cannot  be  prevented 
from  such  adoption  because  the  other  party  to  the  contract  may  for  any  reasoa 
prefer  to  treat  the  contract  as  invalid."  Andrews  v.  ^tna  Life  Ins.  Co.,  92  N.  Y. 
596,  604. 


104  MCCLINTOCK  V.   SOUTH  PENN  OIL  CO.  [CHAP.   III. 

Mr.  Justice  Mitchell.  The  receipt  by  plaintiff's  husband  ex- 
pressed the  fact  of  a  sale,  by  the  acknowledgment  of  receipt  of  part  of 
the  purchase  money,  and  fixed  the  time  and  amount  of  the  remaining 
payment.  All  the  other  terms  of  the  contract,  including  the  identi- 
fication of  the  subject-matter,  were  shown  by  the  original  agreement 
of  Donaldson,  on  which  the  receipt  was  indorsed.  The  two  papers 
thus  constituted  one  instrument,  which,  so  far  as  appears  on  its  face, 
was  a  sufficient  memorandum  in  writing  to  satisfy  the  Statute  of 
Frauds.  Its  defect  in  that  regard  was  dehors  the  instrument  itself, 
and  lay  in  the  want  of  written  authority  in  the  husband  to  act  as 
agent  for  his  wife.  Had  his  authority  been  in  writing  at  that  time, 
even  though  on  a  separate  paper,  no  question  of  the  validity  and  bind- 
ing force  of  the  contract  could  have  arisen.  His  action  as  agent  was, 
however,  formally  ratified  and  adopted  by  the  wife,  in  writing,  before 
any  rescission  or  change  of  position  in  any  way  by  the  defendant. 

The  exact  question  before  us,  therefore,  is  whether  such  ratification 
by  the  wife,  of  its  own  force,  perfected  and  validated  the  agent's  orig- 
inal contract,  or  whether  it  still  required  acceptance  by  the  grantee. 

No  case  precisely  in  point  has  been  found,  and  we  are  left  to  deter- 
mine the  question  on  general  principles.  It  is  conceded  that  a  deed 
tendered  by  the  vendor,  but  refused  by  the  vendee,  will  not  validate  a 
parol  contract,  and  it  is  argued  that  the  present  case  stands  upon  the 
same  footing.  But  I  apprehend  that  the  rule  in  question  results  from 
the  common-law  requirement  that  every  writing  must  be  accepted  be- 
fore it  becomes  a  contract.  It  is  sometimes  said,  however,  that  the 
reason  a  deed  tendered  is  ineffectual  under  the  statute,  is  that  until 
such  tender  the  vendor  was  not  bound;  the  vendee  could  not  have 
held  him,  and,  there  being  therefore  a  want  of  mutuality  in  the  agree- 
ment, equity  will  not  specifically  enforce  it.  Whether  the  equitable 
doctrine  of  mutuality  has  any  proper  place  in  cases  arising  under  the 
Statute  of  Frauds,  is  a  vexed  question  on  which  our  decisions  are  not 
in  harmony,  and  are  badly  in  need  of  review  and  authoritative  settle- 
ment. See  Tripp  v.  Bishop,  56  Pa.  424;  Meason  v.  Kaine,  63  Pa. 
335 ;  Sands  v.  Arthur,  84  Pa.  479,  and  the  comment  upon  them  by 
Judge  Eeed  in  his  treatise  on  the  Statute  of  Frauds,  §  367.  But  what- 
ever the  foundation  of  the  rule,  it  is  doubtful  if  the  case  of  ratification 
of  an  agent's  act  comes  fairly  within  it.  If  the  agent  had  been  prop- 
erly authorized,  the  contract  would  have  bound  both  parties  in  the 
first  instance;  and  the  settled  rule  is  that  ratification  is  equivalent 
in  every  way  to  plenary  prior  authority.  The  objection  of  want  of 
mutuality  is  not  good  in  many  cases  of  dealing  with  an  agent,  for  if 
he  exceeds  his  authority,  actual  and  apparent,  his  principal  will  not  be 
bound,  yet  may  ratify,  and  then  the  other  party  will  be  bound  from 
the  inception  of  the  agreement.  The  aggregatio  mentium  of  the 
parties  need  not  commence  simultaneously.  It  must  co-exist;  but 
there  must  be  a  period  when  the  question  of  contract  or  no  contract 


CHAP.   III.]       EIGHT  TO   BECEDE  BEFORE   RATIFICATION.  105 

rests  on  the  will  of  one  party  to  accept  or  reject  a  proposition  made, 
and  this  interval  may  be  long  or  short.  The  offer,  of  course,  may  be 
revoked  or  withdrawn  at  any  time  prior  to  acceptance,  but  after  accept- 
ance, it  is  too  late.  The  contract  is  complete.  If,  in  the  present  case, 
the  defendants  had  written  a  letter  to  plaintiff,  stating  that  they  had 
made  the  agreement  with  her  husband  as  agent,  but  that,  his  author- 
ity not  being  in  writing,  they  requested  her  to  send  them  a  written 
ratification,  and  thereupon  she  had  written  and  mailed  an  acceptance 
and  ratification  of  her  agent's  act,  there  could  be  no  question  of  the 
contract.    Hamilton  v.  Insurance  Co.,  5  Pa.  339,  and  cases  cited  in 

3  Am.  &  Eng.  Encyc.  of  Law,  856,  tit.  Contract;  and  13  Am.  &  Eng. 
Encyc.  of  Law,  233,  tit.  Mail.  And,  in  effect,  that  is  just  what  the 
defendant  did  here.  It  made  the  original  agreement  with  the  husband, 
evidenced  by  his  indorsement  on  the  Donaldson  contract,  which  was 
delivered  into  its  possession.  On  the  day  that  payment  was  called 
for  by  the  indorsed  agreement,  the  defendant  further  indorsed  on  the 
contract  an  assignment  by  husband  and  wife,  which  would  be  a  writ- 
ten ratification  of  the  most  formal  kind,  of  the*  husband's  previous 
act,  and,  as  the  jury  have  found,  delivered  it  to  the  husband  uncondi- 
tionally, for  execution  and  acknowledgment.  The  defendant's  con- 
sent to  the  contract  sued  upon  was  thus  manifested;  and  upon 
acceptance  by  plaintiff,  the  contract  became  binding  as  a  common-law 
contract  of  both  parties,  and  upon  her  signature  it  became  a  contract 
in  writing  within  all  the  requirements  of  the  statute.  The  objects  of 
the  act,  certainty  of  subject-matter,  precision  of  terms,  reliability  of 
evidence,  and  clearness  of  intent  of  the  landowner  are  all  secured,  and 
we  see  no  particular  in  which  either  the  letter  or  the  policy  of  the 
statute  has  been  violated. 

The  cases  cited  by  appellee,  though  not  decisions  on  the  precise 
point,  tend  to  sustain  the  conclusion  here  reached.    Maclean  v.  Dunn, 

4  Bing.  722,  was  under  the  English  statute,  which  requires  only  that 
the  agent  shpuld  be  "  lawfully  authorized ; "  but  t^ie  opinion  of  Lord 
Chief  Justice  Best  illustrates  the  effectiveness  of  ratification  as  equiv- 
alent to  antecedent  authority.  In  our  own  case  of  McDowell  v.  Simp- 
son, 3  W.  129,  the  opinion  of  Kennedy,  J.,  is  clearly  expressed  that  a 
lease  by  an  agent  in  excess  of  any  authority,  either  parol  or  written, 
may  be  ratified,  but  the  ratification,  to  create  a  valid  term  for  seven 
years,  must  be  in  writing.  So  far  as  the  case  goes,  it  is  directly  in  line 
with  our  present  conclusion,  and  it  has  never  been  questioned,  but,  on 
the  contrary,  is  cited  with  approval  in  Dumn  v.  Eothermel,  112  Pa. 
272. 

This  disposes  of  the  main  question  in  the  case,  and  with  it  the  excep- 
tions relating  to  the  measure  of  damages  fall.  The  plaintiff  recovered 
only  the  contract  price  to  which  she  was  entitled.  .  .  . 

Judgment  affirmed. 


106  DODGE  V.   HOPKINS.  [CHAP.   III. 

DODGE   V.   HOPKINS. 

14  Wis.  630.     1861. 

Action  to  recover  instalments  alleged  to  be  due  upon  a  land  con- 
tract.   Verdict  and  judgment  for  plaintiff.    Defendant  appeals. 

Plaintiff's  agent  sold  the  lands  without  authority.  The  question 
arises  as  to  the  effect  of  plaintiff's  ratification. 

Dixon,  C.  J.  (after  deciding  that  the  agent's  acts  were  unauthor- 
ized). We  are  next  to  ascertain  the  effect  of  this  want  of  authority 
upon  the  rights  of  the  defendant.  It  is  very  clear,  in  the  present  con- 
dition of  the  case,  that  the  plaintiff  was  not  bound  by  the  contract,  and 
that  he  was  at  liberty  to  repudiate  it  at  any  time  before  it  had  actually 
received  his  sanction.  Was  the  defendant  bound  ?  And  if  he  was  not, 
could  the  plaintiff,  by  his  sole  act  of  ratification,  make  the  contract 
obligatory  upon  him?  We  answer  both  these  questions  in  the  nega- 
tive. The  covenants  were  mutual,  —  those  of  the  defendant  for  the 
payment  of  the  money  being  in  consideration  of  that  of  the  plaintiff 
for  the  conveyance  of  the  lands.  The  intention  of  the  parties  was  that 
they  should  be  mutually  bound,  —  that  each  should  execute  the  instru- 
ment so  that  the  other  could  set  it  up  as  a  binding  contract  against 
him,  at  law  as  well  as  in  equity,  from  the  moment  of  its  execution. 

In  such  cases  it  is  well  settled,  both  on  principle  and  authority,  that 
if  either  party  neglects  or  refuses  to  bind  himself,  the  instrument  is 
void  for  want  of  mutuality,  and  the  party  who  is  not  bound  cannot 
avail  himself  of  it  as  obligatory  upon  the  other.  Townsend  v.  Corning, 
23  Wend.  (N.  Y.)  435;  and  Townsend  v.  Hubbard,  4  Hill  (N".  Y.), 
351,  and  cases  there  cited.  The  same  authorities  also  show  that 
where  the  instrument  is  thus  void  in  its  inception,  no  subsequent  act 
of  the  party  who  has  neglected  to  execute  it  can  render  it  obligatory 
upon  the  party  whft  did  execute  without  his  assent.  The  opinion  of 
Judge  Bronson  in  the  first-named  case  is  a  conclusive  answer  to  all 
arguments  to  be  drawn  from  the  subsequent  ratification  of  the  party 
who  was  not  originally  bound.  In  that  case,  as  in  this,  the  vendors 
had  failed  to  bind  themselves  by  the  agreement.  He  says :  "  It  would 
be  most  extraordinary  if  the  vendors  could  wait  and  speculate  upon 
the  market,  and  then  abandon  or  set  up  the  contract  as  their  own 
interests  might  dictate.  But  without  any  reference  to  prices,  and 
whether  the  delay  was  long  or  short,  if  this  was  not  the  deed  of  the 
vendee  at  the  time  it  was  signed  by  himself  and  Baldwin  "(the  agent), 
it  is  impossible  that  the  vendors,  by  any  subsequent  act  of  their  own 
without  his  assent,  could  make  it  his  deed.  There  is,  I  think,  no  prin- 
ciple in  the  law  which  will  sanction  such  a  doctrine."  The  only  point 
in  which  the  facts  in  that  case  differ  materially  from  those  here 
presented  is  that  no  part  of  the  purchase  money  was  advanced  to 


CHAP.   III.]       RIGHT  TO   RECEDE  BEFORE   RATIFICATION".  107 

the  agent.  But  that  circumstance  cannot  vary  the  application  of  the 
principle.  The  payment  of  the  money  to  the  agent  did  not  affect  the 
validity  of  the  contract,  or  make  it  binding  upon  the  plaintiff.  He 
was  at  liberty  to  reject  the  money,  and  his  acceptance  of  it  was  an 
act  of  ratification  with  which  the  defendant  was  in  no  way  connected, 
and  which,  although  it  might  bind  him,  imposed  no  obligation  upon 
the  defendant  until  he  actually  assented  to  it.  It  required  the  assent 
of  both  parties  to  give  the  contract  any  vitality  or  force. 

I  am  well  aware  that  there  are  dicta  and  observations  to  be  found 
in  the  books,  which,  if  taken  literally,  would  overthrow  the  doctrine 
of  the  cases  to  which  I  have  referred.  It  is  said  in  Lawrence  v.  Taylor, 
5  Hill  (N.  Y.),  107,  that  "  such  adoptive  authority  relates  back  to  the 
time  of  the  transaction,  and  is  deemed  in  law  the  same  to  all  purposes 
as  if  it  had  been  given  before."  And  in  Newton  v.  Bronson,  3 
Kern.  (N.  Y.)  587  (67  Am.  Dec.  87),  the  court  say:  "  That  a  subse- 
quent ratification  is  equally  effectual  as  an  original  authority,  is  well 
settled."  Such  expressions  are,  no  doubt,  of  frequent  occurrence ;  and 
although  they  display  too  much  carelessness  in  the  use  of  language, 
yet,  if  they  are  understood  as  applicable  only  to  the  cases  in  which 
they  occur,  they  may  be  considered  as  a  correct  statement  of  the  law. 
The  inaccuracy  consists  in  not  properly  distinguishing  between  those 
cases  where  the  subsequent  act  of  ratification  is  put  forth  as  the  foun- 
dation of  a  right  in  favor  of  the  party  who  has  ratified,  and  those 
where  it  is  made  the  basis  of  a  demand  against  him.  There  is  a  broad 
and  manifest  difference  between  a  case  in  which  a  party  seeks  to  avail 
himself,  by  subsequent  assent,  of  the  unauthorized  act  of  his  own 
agent,  in  order  to  enforce  a  claim  against  a  third  person,  and  the  case 
of  a  party  acquiring  an  inchoate  right  against  a  principal  by  an  un- 
authorized act  of  his  agent,  to  which  validity  is  afterwards  given  by 
the  assent  or  recognition  of  the  principal.  Paley  on  Agency,  192, 
note.  The  principal  in  such  a  case  may,  by  his  subsequent  assent,  bind 
himself;  but,  if  the  contract  be  executory,  he  cannot  bind  the  other 
party.  The  latter  may,  if  he  choose,  avail  himself  of  such  assent 
against  the  principal,  which,  if  he  does,  the  contract,  by  virtue  of  such 
mutual  ratification,  becomes  mutually  obligatory.  There  are  many 
cases  where  the  acts  of  parties,  though  unavailable  for  their  own  bene- 
fit, may  be  used  against  them.  It  is  upon  this  obvious  distinction,  I 
apprehend,  that  the  decisions  which  I  have  cited  are  to  be  sustained. 
Lawrence  v.  Taylor  and  Newton  v.  Bronson  were  both  actions  in  which 
the  adverse  party  claimed  rights  through  the  agency  of  individuals 
whose  acts  had  been  subsequently  ratified.  And  the  authorities  cited 
in  support  of  the  proposition  laid  down  in  the  last  case  (Weed  v.  Car- 
penter, 4  Wend.  219;  Episcopal  Society  v.  Episcopal  Church,  1  Pick. 
372 ;  Coming  v.  Southland,  3  Hill,  552 ;  Moss  v.  Rossie  Lead  Mining 
Co.,  5  Id.  187 ;  Clark  v.  Van  Reimsdyk,  9  Cranch,  153 ;  Willinks  v. 
Hollingsworth,  6  Wheat.  241),  will,  when  examined,  be  found  to  have 


108  HEATH    V.   NUTTER  ET  AL.  [CHAP.   III. 

been  cases  where  the  subsequent  assent  was  employed  against  the  per- 
sons who  had  given  it,  and  taken  the  benefit  of  the  contract. 

(The  court  then  considers  the  effect  of  the  unauthorized  contract 
under  the  Statute  of  Frauds. ) 

No  original  authority  to  the  agent  making  the  contract  having  been 
shown,  and  no  evidence  offered  on  the  trial  of  such  ratification  as 
bound  the  defendant,  it  follows  that  the  judgment  must  be  revereed, 
and  a  new  trial  awarded. 

Ordered  accordingly.^ 


4.    Form  of  Ratification. 

HEATH    V.    NUTTEE    et  al. 
50  Me.  378.     1862. 

Writ  of  entry.  Defendants  claim  under  a  deed  from  one  Eob- 
bins,  by  his  attorney  Kich,  and,  in  case  the  power  of  attorney  to  Rich 
should  be  insuflBcient,  offered  to  show  a  ratification  of  the  conveyance 
by  Eobbins,  by  receiving  the  consideration  and  by  oral  statements. 
This  testimony  was  excluded,  and  the  power  held  insufficient.  Plain- 
tiff claims  under  a  quit-claim  deed  from  Eobbins. 

Appleton,  C.  J.  The  power  of  attorney  to  Eich  did  not  empower 
him  to  convey  the  demanded  premises  to  the  inhabitants  of  Tremont. 
The  authority  "  to  grant  any  and  all  discharges  by  deed  or  otherwise, 
both  personal  and  real,"  as  fully  as  the  principal  might  do,  cannot  be 
fairly  construed  as  enabling  the  agent  to  convey  by  bill  of  sale,  or  by 
deed  of  warranty,  all  the  personal  and  real  estate  of  his  principal. 
Nor  can  the  authority  to  convey  by  deed  be  found  elsewhere. 

Whenever  any  act  of  agency  is  required  to  be  done  in  the  name  of 
the  principal  under  seal,  the  authorily  to  do  the  act  must  be  conferred 
by  an  instrument  under  seal.  A  power  to  convey  lands  must  possess 
the  same  requisites,  and  observe  the  same  solemnities  as  are  necessary 
in  a  deed  directly  conveying  the  land.  Gage  v.  Gage,  30  N.  H.  420 ; 
Story  on  Agency,  §§  49,  50;  Montgomery  v.  Dorion,  6  N.  H.  250. 
So  the  ratification  of  an  unauthorized  conveyance  by  deed  must  be  by 
an  instrument  under  seal.  Story  on  Agency,  §  252.  A  parol  ratifica- 
tion is  not  sufficient.  Stetson  v.  Patten,  2  Greenl.  359 ;  Paine  v. 
Tucker,  21  Me.  138;  Hanford  v.  McNair,  9  Wend.  54;  Despatch 
Line  Co.  v.  Bellamy  Manuf.  Co.,  12  N.  H.  205. 

The  plaintiff  received  his  conveyance  with  a  full  knowledge  of  the 
equitable  rights  of  the  tenants.  The  remedial  processes  of  a  court  of 
equity  may  perhaps  afford  protection  to  the  defendants.  At  common 
law  their  defence  fails.  Defendants  defaulted. 

»  The  doctrine  of  this  case  Is  approved  and  applied  in  Atlee  v.  Bartholomew,  69 
Wis.  43  (1887). 


CHAP.   III.]  FORM  OF   RATIFICATION.  109 

McINTYRE   V.   PARK. 

11  Gray  (Mass.)  102.     1858. 

Contract  for  the  non-performaiice  of  an  indenture  whereby  de- 
fendants agreed  to  purchase  a  parcel  of  land  of  plaintiff.  Verdict  for 
plaintiff.    Defendant  alleges  exceptions. 

The  contract  was  signed  by  a  co-purchaser  in  Park's  name  without 
Park's  authority.  The  judge  ruled  that  evidence  was  competent  to 
show  Park's  adoption  or  ratification  of  this  unauthorized  execution  of 
the  instrument. 

Metcalf,  J.  We  express  no  opinion  on  the  question  whether  the 
sum  of  five  hundred  dollars,  mentioned  in  the  agreement  upon  which 
this  action  is  brought,  is  a  penalty  or  liquidated  damages.  That  point 
was  ruled  in  the  defendant's  favor,  and  the  plaintiff  has  not  excepted 
to  the  ruling. 

The  evidence  of  the  defendant's  ratification  or  adoption  of  the 
agreement  executed  in  his  name  was  rightly  admitted;  and  he,  by 
such  ratification  or  adoption,  became  answerable  for  a  breach  of  that 
agreement.  Merrifield  v.  Parritt,  11  Cush.  (Mass.)  590.  In  that 
case  the  agreement  was  not  under  seal;  and  the  defendant  contends 
that  a  sealed  instrument,  executed  without  previous  authority,  can  be 
ratified  only  by  an  instrument  under  seal.  However  this  may  be  else- 
where, by  the  law  of  Massachusetts  such  instrument  may  be  ratified 
by  parol.  Cady  v.  Shepherd,  11  Pick.  (Mass.)  400;  Swan  v.  Sted- 
man,  4  Met.  (Mass.)  548;  see  also  1  Am.  Leading  Cases,  4th  ed. 
450;  Collyer'bn  Part.  3d  Am.  ed.  sec.  467;  Story  on  Agency,  5th  ed. 
sees.  49,  51,  242,  and  notes;  McDonald  v.  Eggleston,  26  Vt.  154.  The 
cases  in  which  this  doctrine  has  been  adjudged  were  those  in  which 
one  partner,  without  the  previous  authority  of  his  co-partners,  exe- 
cuted a  deed  in  the  name  of  the  firm.  But  we  do  not  perceive  any 
reason  for  confining  the  doctrine  to  that  class  of  cases.  .  .  . 

All  the  other  rulings  and  instructions  to  which  exceptions  have  been 
alleged  we  think  were  correct ;  and  we  deem  it  unnecessary  to  do  more 
than  simply  to  aflBrm  them.  Exceptions  overruled. 


KOZEL   V.    DEARLOVE. 

144  111.  23.     1892. 

Action  in  the  nature  of  an  action  for  specific  performance.  The 
contract  was  signed  by  an  agent  of  the  vendor  upon  terms  differing 
from  those  fijxed  by  the  agent's  written  authority.    The  vendor  orally 


110  RIGHT   d.    FISHER    V.    CUTHELL.  [CHAP.    III. 

assented  to  the  terms  as  changed.     Petition  dismissed.     Petitioner 
brings  writ  of  error. 

Bailey,  C.  J.  .  .  .  The  only  question  presented  by  the  record 
which  we  need  consider  is,  whether  Clark  was  authorized  to  sign  the 
contract  sought  to  be  enforced,  or  a  note  or  memorandum  thereof,  by 
any  written  instrument  signed  by  Dearlove,  as  required  by  the  second 
section  of  the  Statute  of  Frauds.  That  he  had  competent  written 
authority  to  sell  the  lots  in  question  at  certain  specified  prices,  and 
upon  certain  prescribed  terms,  is  not  disputed.  But  the  written  in- 
strument gave  him  no  authority  to  sell  at  lower  prices  or  upon  differ- 
ent terms.  No  one,  we  presume,  would  claim  that,  if  he  had  under- 
taken to  do  so  without  consulting  his  principal,  his  act  would  have 
had  any  legal  validity,  or  have  been  enforceable  against  the  principal. 
The  agent  was  just  as  powerless  to  make  such  sale  as  he  would  have 
been  if  no  written  authority  had  existed.  To  sell  upon  different  terms 
required  a  new  and  further  authority,  and  such  new  authority,  to  be 
valid  under  the  Statute  of  Frauds,  must  itself  have  been  in  writing, 
and  signed  by  the  principal. 

It  is  of  no  avail  to  show  that  the  modified  terms  were  communi- 
cated to  Dearlove,  and  were  assented  to  by  him,  and  that  he  directed 
the  execution  of  the  contract  on  those  terms.  The  authority  thus 
given  to  the  agent  was  not  in  writing,  and  so  was  not  a  compliance 
with  the  requirements  of  the  statute.  We  think  the  petition  was 
properly  dismissed,  and  the  decree  will  therefore  be  affirmed. 

Decree  affirmed. 


5.  Legality  or  Validity  of  Act  Ratified. 

EIGHT    d.    FISHEE   v.    CUTHELL. 
5  East  (K.  B.)  491.     1804. 

Ejectment  against  a  tenant  after  six  months'  notice  to  quit,  as 
required  by  the  lease.  The  notice  was  signed  by  two  out  of  three  joint 
owners,  but  purported  to  be  in  behalf  of  all  three.  An  attempt  was 
made  to  establish  a  ratification  by  the  third  but  not  six  months  before 
the  period  fixed  for  terminating  the  lease. 

Lawrence,  J.  I  think  there  is  great  weight  in  the  argument  of 
the  defendant's  counsel,  that  for  the  notice  to  be  good  it  ought  to  be 
binding  on  all  the  parties  concerned  at  the  time  it  was  given,  and  not 
to  depend  for  its  validity,  in  part,  upon  any  subsequent  recognition 
of  one  of  them :  because  the  tenant  is  to  act  upon  the  notice  at  the 
time,  and  therefore  it  should  be  such  as  he  may  act  upon  with  secur- 
ity. But  if  it  be  to  depend  upon  a  subsequent  ratification  of  one  of 
the  joint-tenants,  landlords,  whether  or  not  it  is  to  be  binding  upon 


CHAP.    III.]       LEGALITY    OR   VALIDITY   OF    ACT   RATIFIED.  Ill 

him,  the  condition  and  situation  of  tl\e  tenant  must  remain  doubtful 
till  the  time  of  such  ratification.  Now  the  intention  of  the  parties  to 
the  lease  was,  that  the  tenant  should  not  be  obliged  to  quit  without 
being  apprised  of  it  for  a  certain  time,  that  he  might  have  an  oppor- 
tunity to  provide  himself  with  another  dwelling ;  but  if  a  ratification 
will  do,  instead  of  six  months,  he  might  not  know  certainly  for  as 
many  days  or  hours  whether  he  must  quit  or  not.  The  rule  of  law, 
that  omnis  ratihabitio  retrotrahitur ,  etc.,  seems  only  applicable  to 
cases  where  the  conduct  of  the  parties  on  whom  it  is  to  operate,  not 
being  referable  to  any  agreement,  cannot  in  the  meantime  depend  on 
whether  there  be  a  subsequent  ratification.  But  here  the  intermediate 
acts  of  the  tenant  referable  to  the  terms  of  his  lease  are  to  be  affected 
by  relation.  Rule  discharged?- 


MILFORD   BOROUGH   v.    MILFORD   WATER   CO. 

124  Pa.  St.  610.     1889. 

Assumpsit  by  the  water  company  against  the  borough  upon  a  con- 
tract for  the  supply  of  water  during  the  year  1884—1885.  Judgment 
for  plaintiff.  The  borough  appeals.  When  the  agreement  was  made 
in  1875,  the  chief  burgess  and  two  of  the  councilmen  were  officers, 
and  another  of  the  councilmen  was  a  stockholder,  in  the  plaintiff  com- 
pany. Only  two  members  of  the  council  were  not  interested  in  the 
company.  In  subsequent  years  the  number  of  town  officers  interested 
in  the  water  company  was  less,  and  in  some  years  no  officer  was  so 
interested.  During  those  years  the  borough  used  and  paid  for  the 
water.  During  1884-1885  no  member  of  the  borough  council  was 
interested  in  the  water  company,  but  the  borough  refused  to  pay  for 
the  water. 

Mr.  Chief  Justice  Paxson  (after  deciding  that  the  contract  of 
1875  was  void  under  the  provisions  of  a  statute  which  made  it  a  mis- 
demeanor, punishable  by  fine  and  forfeiture  of  office,  for  a  burgess  or 
councilman  to  be  interested  in  a  contract  for  supplies  for  the  bor- 
ough). It  appeared,  however,  upon  the  trial  below,  that  the  borough 
had  been  using  and  paying  for  this  water  for  several  years ;  that  upon 
some  occasions  when  the  bills  were  passed  there  was  less  than  a  major- 
ity of  councils  who  were  members  of  the  water  company,  and  some 
years  in  which  there^were  no  members  of  councils  who  were  also  mem- 
bers of  said  company.  From  this  it  was  urged  that  there  was  a:  rati- 
fication of  the  contract  by  councils.  The  learned  judge  below  adopted 
this  view,  and  entered  judgment  non  obstante  on  the  verdict  in  favor 
of  the  water  company.    This  will  not  do. 

1  Accord  :   Doe  v.  Goldwin,  2  Q.  B.  143 ;   Dibbins  v.  Dlbbins,  [1896]  2  Ch.  348. 


112  WORKMAN    V.    WEIGHT.  [CHAP,    III. 

There  was  no  ratification  of  the  contract  because  there  was  no  con- 
tract to  ratif}'.  The  water  company  never  contracted  with  the  bor- 
ough. They  contracted  with  themselves  to  supply  the  latter  with 
water;  to  that  agreement  the  borough  was  not  a  party  in  a  legal 
sense.  It  is  true,  the  borough  might,  after  its  councils  had  become 
purged  of  the  members  of  the  water  company,  have  passed  an  ordi- 
nance similar  to  ordinance  No.  2,  and  thus  have  entered  into  a  new 
contract.  But  no  such  ordinance  was  passed,  and  neither  councils  nor 
the  officers  of  the  municipality  can  contract  in  any  other  way.  It  is 
one  of  the  safeguards  of  municipal  corporations  that  they  can  only 
be  bound  by  a  contract  authorized  by  an  ordinance  duly  passed.  The 
Act  of  1860  is  another  and  a  valuable  safeguard  thrown  around 
municipalities.  It  was  passed  to  protect  the  people  from  the  frauds 
of  their  own  servants  and  agents.  It  may  be  there  was  no  fraud, 
actual  or  intended,  in  the  present  case,  but  we  will  not  allow  it  to  be 
made  an  entering  wedge  to  destroy  the  Act  of  1860.  Of  what  pos- 
sible use  would  that  Act  be  if  its  violations  are  condoned,  and  its  pro- 
hibited, criminally-condemned  contracts  allowed  to  be  enforced  under 
the  guise  of  an  implied  ratification?  It  is  too  plain  for  argument 
that  the  payment  by  councils  for  some  years  for  water  actually  fur- 
nished, created  no  contract  to  accept  and  pay  for  it  in  the  future, 
Nor  was  this  suit  brought  upon  any  such  implied  contract.  On  the 
contrary  it  was  brought  upon  the  contract  authorized  by  ordinance 
No.  2 ;  it  has  nothing  else  to  rest  upon,  and  with  the  destruction  of 
its  foundation  the  superstructure  crumbles. 

The  judgment  is  reversed,  and  judgment  is  now  entered  for 
the  defendant  below  non  obstante  veredicto. 


WOEKMAN   V.   WRIGHT. 

33  Oh.  St.  405.     1878. 

Action  upon  a  promissory  note  payable  to  Workman,  and  signed 
with  the  name  of  Wright  and  one  Edington.  Wright  denied  the 
execution  of  the  note  on  his  part.  Workman  set  up  that  Wright  had 
ratified  his  signature  and  promised  to  pay  the  note.  Judgment  for 
defendant.    Plaintiff  brings  error. 

Wright,  J.  Under  the  pleadings  and  findings  of  the  court  below, 
it  maybe  assumed  that  the  name  of  Calvin  Wright  was  a  forgery,  as 
there  was  evidence  tending  to  show  the  fact ;  and  we  cannot  say  that 
the  conclusion  reached,  in  this  respect,  was  clearly  against  the  testi- 
mony. It  is  claimed,  however,  that  his  admissions,  and  promises  to 
pay  the  note,  ratified  the  unauthorized  signature. 

Had  Workman,  the  owner  of  the  note,  taken  it  upon  the  faith  of 


CHAP.   III.]      LEGALITY  OR  VALIDITY   OF   ACT  RATIFIED.  113 

these  admissions,  or  had  he  at  all  changed  his  status  by  reason 
thereof,  such  facts  would  create  an  estoppel,  which  would  preclude 
Wright  now  from  his  defence.  This  appears  from  most  of  the  au- 
thorities cited  in  the  case.  But  no  foundation  for  an  estoppel  exists. 
All  these  statements  of  Wright,  whatever  they  were,  were  made  after 
Workman  became  the  owner  of  the  paper.  Workman  did  not  act 
upon  them  at  all;  he  was  in  no  way  prejudiced  by  them,  nor  did 
they  induce  him  to  do,  or  omit  to  do,  anything  whatever  to  his  disad- 
vantage. But  it  is  maintained  that,  without  regard  to  the  principle 
of  estoppel,  these  admissions  and  promises  are  a  ratification  of  the 
previously  unauthorized  act,  upon  the  well-known  maxim,  Omnia 
ratihabitio  retrotrahitur  et  mandato  priori  cequiparatur. 

It  is  said  that  a  distinction  exists  between  the  classes  of  cases  to 
which  this  principle  applies.  Where  the  original  act  was  one  merely 
voidable  in  its  nature,  the  principal  may  ratify  the  act  of  his  agent, 
although  it  was  unauthorized.  But  where  the  act  was  void,  as  in  case 
of  forgery,  it  is  said  no  ratification  can  be  made,  independent  of  the 
principle  of  estoppel,  to  which  we  have  alluded.  Most  of  the  au- 
thorities cited  by  counsel  for  plaintiff  in  error  are  of  the  first  class, 
where  the  act  was  only  voidable. 

Bank  v.  Warren,  15  K.  Y.  577,  was  where  one  partner,  without 
authority,  and  for  his  own  exclusive  benefit,  indorsed  his  own  note 
in  the  firm  name,  his  co-partner  was  held  bound  by  subsequent 
promise  to  pay  it,  without  any  independent  consideration. 

In  Crout  V.  De  Wolf,  1  E.  I.  393,  the  third  clause  of  the  head  note 
is>  "  Where  the  person  whose  signature  is  forged,  promises  the  forger 
to  pay  the  note,  this  amounts  to  ratification  of  the  signature,  and 
binds  him."  But  an  examination  of  the  case  shows  that  evidence  was 
offered  to  prove  that  plaintiff  had  bought  the  paper  in  consequence  of 
what  defendant  said  to  him,  and  the  court  charged  that  if,  before 
purchasing  the  note,  plaintiff  asked  defendant  if  he  should  buy,  and 
he  was  told  he  might,  defendant  could  not  excuse  himself  on  the 
ground  of  forgery.  So  that  the  case  may  be  put  upon  the  ground  of 
estoppel,  without  relying  upon  the  ground  stated  in  the  head  note 
quoted. 

Harper  v.  Devene,  10  La.  An.  724,  was  where  a  clerk  of  a  house 
signed  the  name  of  the  house  by  himself  as  agent.  Defendant,  a 
member  of  the  house,  afterward  took  the  note,  corrected  its  date,  and 
promised  to  pay  it;  and  this  was  held  a  ratification  to  make  him 
liable.  In  this  case,  and  many  like  it,  it  may  be  remarked  that  the 
agent  assumed  to  have  authority,  and  does  the  act  under  that  belief; 
but  in  case  of  a  forgery  there  is  no  such  authority  and  no  such  belief. 

The  case  of  Forsyth  v.  Day,  46  Me.  177,  involves  the  principle  of 
estoppel. 

The  cases  of  Bank  v.  Crafts,  4  Allen,  447,  and  Howard  v.  Duncan, 
3  Lansing,  175,  sustain  the  views  of  plaintiff  in  error,  holding  that  a 

8 


114  WORKMAN    V.    WRIGHT.  [CHAP.    III. 

forgery  may  be  ratified,  independently  of  the  principle  of  estoppel, 
and  in  the  absence  of  any  new  consideration  for  the  ratifying  promise, 
—  a  conclusion,  however,  to  which  we  cannot  agree.  The  case  in  3 
Lansing  is  criticised  in  3  Albany  Law  Journal,  331. 

L^pon  the  other  hand,  there  are  authorities  holding  that  a  forgery 
cannot  be  ratified.  There  is  a  fully  considered  case  in  the  English 
Exchequer:  Brooke  v.  Hook,  3  Albany  Law  Journal,  255;  24  Law 
Times,  34.  This  was  a  case  where  defendant's  name  was  forged,  and 
he  had  given  a  written  memorandum,  that  he  would  be  responsible 
for  the  bill.    Chief  Baron  Kelly  places  his  opinion  upon  the  grounds : 

(1)  That  defendant's  agreement  to  treat  the  note  as  his  own,  was  in 
consideration  that  plaintiff  would  not  prosecute  the  forger;    and, 

(2)  that  there  was  no  ratification  as  to  the  act  done,  —  the  signature 
to  the  note  was  illegal  and  void.  And  though  a  voidable  act  may  be 
ratified,  it  is  otherwise  when  the  act  is  originally,  and  in  its  inception, 
void.  The  opinion  fully  recognizes  the  proposition,  that  where  acts 
or  admissions  alter  the  condition  of  the  holder  of  the  paper  the  party 
is  estopped,  but  it  is  necessary  that  such  a  case  should  be  made.  It 
is  further  held,  that  cases  of  ratification  are  those  where  the  act  was 
pretended  to  have  been  done  for,  or  under  the  authority  of,  the  party 
sought  to  be  charged,  which  cannot  be  in  case  of  a  forgery.  A  dis- 
tinction is  also  made  between  civil  acts,  which  may  be  made  good  by 
subsequent  recognition,  and  a  criminal  offence,  which  is  not  capable  of 
ratification.  Baron  Martin  did  not  concur.  In  Woodruff  &  Kobin- 
son  V.  Munroe,  33  Md.  147,  this  is  held :  "  If,  in  an  action  against 
an  indorser  of  a  promissory  note  by  the  bona  fide  holders  thereof,  it  be 
shown  that  the  indorsement  was  not  genuine,  and  the  defendant  did 
not  ratify  or  sanction  it  prior  to. the  maturity  of  the  note  and  its 
transfer  to  plaintiff,  he  is  not  liable.  But  if  he  adopted  the  note 
prior  to  its  maturity,  and  by  such  adoption  assisted  in  its  negotiations, 
he  would  be  estopped  from  setting  up  the  forgery  in  a  suit  by  a  bona 
fide  holder.  But  any  admissions,  by  the  defendant,  made  subsequently 
to  the  maturity  of  the  note,  would  not  be  evidence  that  he  had  au- 
thorized the  indorsement  of  his  name  thereon."  See  also  "Williams  v. 
Bayley,  L.  R.  1  Appeals,  H.  L.  200. 

In  McHugh  V.  County  of  Schuylkill,  67  Pa.  St.  391,  the  defence 
to  a  bond  was  forgery.  The  court  below  charged  that  if  the  obligor 
subsequently  approved  and  acquiesced  in  the  forgery  or  ratified  it,  the 
bond  was  binding  on  him.  It  was  held  that,  there  being  no  new  con- 
sideration, the  instruction  was  error;  also,  that  a  contract  infected 
with  fraud  was  void,  not  merely  voidable,  and  confirmation  without  a 
new  consideration  was  nudum  pactum.  See  also  Negley  v.  Lindsay, 
67  Pa.  St.  217.  Daniel  recognizes  this  proposition.  2  Daniel,  Neg. 
Inst.  §  1352. 

Upon  principle  we  cannot  see  how  a  mere  promise  to  pay  a  forged 
note  can  lay  the  foundation  for  liability  of  the  maker  so  promising. 


CHAP.    III.]      LEGALITY   OR   VALIDITY   OF   ACT   RATIFIED.  115 

when  the  promise  was  made,  as  it  was,  under  the  circumstances  set 
forth  in  the  record.  In  addition  to  the  fact  that  there  are  no  cir- 
cumstances to  create  an  estoppel,  there  was  no  consideration  for  the 
promise.  Wright  received  nothing,  and  it  is  a  simple  nudum  pactum. 
The  consideration  for  a  promise  may  be  either  an  advantage  to  the 
promisor  or  a  detriment  to  the  promisee,  but  here  neither  exists. 
Wright  had  signed  a  note,  and  when  the  one  in  suit  was  shown  him, 
said  he  would  pay  it,  supposing  it  to  be  the  one  he  had  signed.  He 
was  an  ignorant  man  who  could  not  read  writing,  though  he  could 
sign  his  name,  and  when  he  saw  the  paper,  seeing  that  the  signature 
spelled  his  name,  and  being  unable  to  read  the  body  of  the  instrument, 
he  said  it  was  all  right,  and  he  would  pay  it.  But  the  promise  was 
without  that  consideration  which  would  make  it  a  binding  contract. 

Judgment  affirmed.^ 


GEEENFIELD   BANK   v.    CRAFTS. 

4  Allen  (Mass.)  447.     1862. 

Contract  upon  a  note,  bearing  the  name  of  Thomas  Crafts  as 
joint  maker,  and  upon  three  drafts,  bearing  the  name  of  Thomas 
Crafts  as  indorser.  The  action  was  originally  commenced  against 
Thomas  Crafts,  and  after  his  death  his  executors  appeared  and  took 
upon  themselves  the  defence,  which  was  that  the  signatures  of  his 
name  were  forged. 

The  defendants  requested  the  court  to  instruct  the  jury  that  if  they 
were  satisfied  that  the  signatures  of  the  name  of  Thomas  Crafts,  when 
made,  were  forgeries,  the  defendants  could  not  be  held  liable  upon  the 
ground  that  they  were  ratified  and  adopted,  unless  upon  proof  of  such 
facts  as  would  amount  to  an  estoppel  in  pais.  The  court  declined  to 
instruct  the  jury  in  accordance  with  this  request,  but  instructed  them 
that  the  evidence  was  competent  for  their  consideration  upon  the 
question  whether  Thomas  Crafts  had  ratified  or  adopted  the  signa- 
tures as  his  own,  and  such  ratification  or  adoption,  if  proved,  would 
be  equivalent  to  a  previous  authority;  and  upon  the  question  what 
would  constitute  such  ratification  #r  adoption,  the  court  gave  such 
instructions  as  would  be  applicable  to  an  ordinary  case  of  apparent 
or  assumed  agency,  and  no  objection  was  made  that  the  instructions 
were  not  proper  as  applied  to  such  a  case.    Defendants  excepted. 

Dewey,  J.  It  is  apparent  from  the  finding  of  the  jury,  that  the 
plaintiffs  failed  to  prove  that  the  signature  of  Thomas  Crafts'  name 
was  placed  upon  these  various  instruments  with  his  previous  author- 
ity. The  right  of  the  plaintiffs  to  maintain  their  verdict  rests  upon 
proof  of  ratification  and  adoption  by  Thomas  Crafts  of  the  act  of 

»  Accord :  Henry  v.  He€b,  114  Ind.  275. 


116  GREENFIELD  BANK  V.   CRAFTS.  [CHAP.    III. 

signing,  or  upon  the  ground  of  an  estoppel  to  deny  the  signature 
thereto,  by  reason  of  his  acts  in  reference  to  the  same,  when  brought 
to  his  knowledge.  ... 

But  it  is  now  urged  on  the  part  of  the  defendants,  that  these 
signatures  were  incapable  of  such  adoption  or  ratification.  .  .  . 

The  only  question  upon  this  part  of  the  case  is,  whether  a  signa- 
ture, made  by  an  unauthorized  person  under  such  circumstances  as 
to  show  that  the  party  placing  the  name  on  the  note  was  thereby  com- 
mitting the  crime  of  forgery,  can  be  adopted  and  ratified  by  any  acts 
and  admissions  of  the  party  whose  name  appears  on  the  note,  however 
full,  and  intentionally  made  and  designed  to  signify  an  adoption  of 
the  signature.  The  defendants  insist  that  it  cannot,  by  such  evidence 
as  would  in  other  cases  warrant  the  jury  in  finding  an  adoption ;  and 
that  nothing  short  of  an  estoppel,  having  the  element  of  actual  dam- 
age from  delay  or  postponement,  occasioned  by  the  acts  of  the  person 
whose  name  is  borne  upon  the  note,  misleading  the  holder  of  it,  will 
have  this  effect.  As  to  the  person  himself  whose  name  is  so  signed, 
it  is  difficult  to  perceive  any  sound  reason  for  the  proposed  distinc- 
tion, as  to  the  effects  of  ratifying  an  unauthorized  act,  in  the  two 
supposed  cases. 

In  the  first  case,  the  actor  has  no  authority  any  more  than  in  the 
last.  The  contract  received  its  whole  validity  from  the  ratification. 
It  may  be  ratified  where  there  was  no  pretence  of  agency.  In  the 
other  case,  the  individual  who  presents  the  note  thus  signed  passes  the 
same  as  a  note  signed  by  the  promisor,  either  by  his  own  proper 
hand,  or  written  by  some  one  by  his  authority.  It  was  clearly  com- 
petent, if  duly  authorized,  thus  to  sign  the  note.  It  is,  as  it  seems  to 
us,  equally  competent  for  the  party,  he  knowing  all  the  circumstances 
as  to  the  signature  and  intending  to  adopt  the  note,  to  ratify  the  same, 
and  thus  confirm  what  was  originally  an  unauthorized  and  illegal  act. 
We  are  supposing  the  case  of  a  party  acting  with  full  knowledge  of 
the  manner  the  note  was  signed,  and  the  want  of  authority  on  the 
part  of  the  actor  to  sign  his  name,  but  who  understandingly  and  un- 
equivocally adopts  the  signature,  and  assumes  the  note  as  his  own. 
It  is  difficult  to  perceive  why  such  adoption  should  not  bind  the  party 
whose  name  is  placed  on  the  note  as  promisor,  as  effectually  as  if  he 
had  adopted  the  note  when  executed  by  one  professing  to  be  author- 
ized, and  to  act  as  an  agent,  as  indicated  by  the  form  of  the  signature, 
but  who  in  fact  had  no  authority. 

It  is,  however,  urged  that  public  policy  forbids  sanctioning  a  rati- 
fication of  a  forged  note,  as  it  may  have  a  tendency  to  stifle  a  prose- 
cution for  the  criminal  offence.  It  would  seem,  however,  that  this 
must  stand  upon  the  general  principles  applicable  to  other  contracts, 
and  is  only  to  be  defeated  where  the  agreement  was  upon  the  under- 
standing that  if  the  signature  was  adopted  the  guilty  party  was  not 
to  be  prosecuted  for  the  criminal  offence. 


I 


CHAP.    III.]  LEGAL    EFFECTS   OF   RATIFICATION.  117 

In  the  case  of  Forsyth  v.  Day,  46  Maine,  176,  it  was  held  that 
there  might  be  a  ratification  and  adoption  of  a  forged  note  by  the 
person  whose  name  appears  as  promisor. 

We  perceive  no  valid  objections  to  the  ruling  of  the  court,  and 
instructions  given  to  the  jury  on  this  point.  .  .  . 

Defendants'  exceptions  overruled. 


6.  Legal  Effects  of  Ratification. 

GBANT   V.   BEARD. 
50  N.  H.  129.     1870. 

A  FATHER  directs  plaintiff  to  make  repairs  on  two  wagons  which 
he  said  belonged  to  his  sons.  Later  the  sons  ratified  the  act  of  the 
father  and  paid  a  part  of  the  bill. 

Among  other  things  the  jury  were  further  instructed  that,  if  they 
found  that  the  defendants  did  not  authorize  their  father  to  make 
the  contract  as  their  agent,  but  afterwards  assented  to  what  had  been 
done,  their  assent  would  not  make  them  liable  in  this  action  unless 
they  owned  the  wagons  at  the  time  they  were  repaired,  or  received 
some  benefit  from  the  repairs.  To  this  last  instruction  the  plaintiff 
excepted. 

The  plaintiff  requested  the  following  instruction:  "If  the  jury 
find  that  the  father  procured  the  credit  as  the  agent,  either  actual 
or  assumed,  of  the  defendants,  and  the  credit  was  really  given  to 
them,  then  the  subsequent  ratification  by  the  defendants  will  bind 
them,  even  though  they  may  not  have  received  the  benefit  of  the 
credit." 

The  instruction  was  not  given,  and  the  plaintiff  excepted.  Verdict 
for  the  defendants. 

Motion  to  set  aside  the  verdict. 

Foster,  J.  The  ratification,  upon  fuU  knowledge  of  all  the  cir- 
cumstances of  the  case,  of  an  act  done  by  one  who  assumes  to  be  an 
agent,  is  equivalent  to  a  prior  authority.  By  such  ratification  the 
party  will  be  bound  as  fully,  to  all  intents  and  purposes,  as  if  he  had 
originally  given  express  authority  or  direction  concerning  the  act. 

A  parol  contract  may  be  ratified  by  an  express  parol  recognition 
of  the  act,  or  by  conduct  implying  acquiescence,  or  by  silence  when 
the  party,  in  good  faith,  ought  to  speak.  And  so  the  principal  may 
be  estopped  to  deny  the  agent's  original  authority.  Story  on  Agency, 
§  239 ;  Metcalf  on  Contracts,  112 ;  Hatch  v.  Taylor,  10  N.  H.  538 ; 
Despatch  Line  v.  Bellamy  Manf.  Co.,  12  N.  H.  232 ;  Davis  v.  School 
District,  44  N.  H.  399;  Warren  v.  Wentworth,  45  N,  H.  564;  For- 


118  GRANT  V.   BEABD.  [CHAP.   III. 

syth  V.  Day,  46  Me.  194 ;  Ohio  &  Mississippi  R.  Co.  v.  Middleton,  20 
IH.  629. 

Such  ratification  relates  back  to  and  incorporates  the  original  con- 
tract or  transaction,  so  that,  as  between  the  parties,  their  rights  and 
interests  are  to  be  considered  as  arising  at  the  time  of  the  original 
act,  and  not  merely  from  the  date  of  the  ratification;  and  a  suit  to 
enforce  the  obligation  assumed  by  the  party  who  ratifies,  is,  to  all 
intents  and  purposes,  a  suit  founded  upon  the  original  act  or  contract, 
and  not  on  the  act  of  ratification.  Davis  v.  School  District,  before 
cited ;  Low  v.  Eailroad,  46  N.  H.  284 ;  Doggett  v.  Emerson,  3  Story, 
737 ;  Mason  v.  Crosby,  1  Woodb.  &  M.  342 ;  Clark's  Executors  v.  Van 
Riemsdyk,  9  Cr.  153;  Culver  v.  Ashley,  19  Pick.  301;  Forsyth  v. 
Day,  before  cited. 

Therefore  the  original  consideration  applies  to  the  ratification, 
thus  made  equivalent  to  an  original  contract,  and  supports  the  im- 
plied promise  upon  which  the  present  action  is  founded. 

The  ratification  operates  directly,  and  not  merely  as  presumptive 
evidence  that  the  act  was  originally  done  by  the  authority  of  the 
defendants;  and  therefore  it  is  unnecessary  to  consider  whether  or 
not  the  evidence  tends  to  show  an  original  authority.  The  subse- 
quent assent  is,  per  se,  a  confirmation  of  the  agent's  act;  and  there 
is  no  valid  distinction  between  a  ratification  of  the  agent's  act,  and  a 
direct  and  original  promise  to  pay  for  the  services  rendered  by  the 
plaintiff.  Wherever  there  would  have  been  a  consideration  for  the 
original  engagement  if  no  agent  or  party  assuming  to  act  as  agent 
had  intervened,  such  original  consideration  is  sufficient  to  sustain  the 
act  of  ratification. 

In  none  of  the  cases  cited  is  the  subject  of  a  new  consideration,  to 
support  the  ratification,  alluded  to  as  necessary;  but  the  logical  de- 
duction from  the  principle  that  the  ratification  relates  back  to  and 
covers  the  original  agreement,  is  wholly  inconsistent  with  such  a 
proposition ;  and  the  contrary  doctrine  is  expressly  held  in  numerous 
cases.  Commercial  Bank  of  Buffalo  v.  Warren,  15  N.  Y.  Rep.  583, 
and  cases  cited. 

There  was  abundant  evidence,  in  the  present  case,  from  which  the 
jury  might  have  found  that  the  defendants  owned  the  wagons  and 
received  a  positive  benefit  from  the  repairs;  but  such  evidence  and 
such  finding  were  wholly  unnecessary,  because  it  is  not  material  that 
the  party  making  the  promise  should  receive  a  benefit  from  the 
other  party's  act;  it  is  sufficient  if  any  trouble,  prejudice,  expense, 
or  inconvenience  accrued  to  the  party  to  whom  the  promise  is  made. 
Metcalf  on  Contracts,  163 ;  1  Parsons  on  Contracts,  431. 

We  are  therefore  of  the  opinion  that  the  instruction  of  the  court 
to  the  jury  "  that  if  they  found  that  the  defendants  did  not  authorize 
their  father  to  make  the  contract  9s  their  agent,  but  afterwards  as- 
sented to  what  had  been  done,  their  assent  would  not  make  them 


CHAP.   III.]  LEGAL   EFFECTS  OF   RATIFICATION.  119 

liable  unless  they  owned  the  wagons  at  the  time  they  were  repaired, 
or  received  some  benefit  from  the  repairs/'  was  erroneous;  and  for 
this  reason  the  verdict  must  be  set  aside,  and  a 

New  trial  granted. 


DEMPSEY   V.   CHAMBEES. 

154  Mass.  330.     1891. 

Tort,  to  recover  for  the  breaking  of  a  plate-glass  window  in  plain- 
tiff's building  by  the  negligence  of  one  McCullock.  Judgment  for 
plaintiff. 

Plaintiff  ordered  coal  of  defendant.  McCullock,  without  authority, 
delivered  the  coal  in  behalf  of  defendant,  and  in  so  doing  carelessly 
broke  the  window.  Defendant,  with  full  knowledge  of  McCullock's 
act,  presented  a  bill  for  the  coal  to  plaintiff  and  demanded  payment. 

Holmes,  J.  This  is  an  action  of  tort  to  recover  damages  for  the 
breaking  of  a  plate-glass  window.  The  glass  was  broken  by  the  neg- 
ligence of  one  McCullock,  while  delivering  some  coal  which  had  been 
ordered  of  the  defendant  by  the  plaintiff.  It  is  found  as  a  fact  that 
McCullock  was  not  the  defendant's  servant  when  he  broke  the  window, 
but  that  the  "  delivery  of  the  coal  by  McCullock  was  ratified  by  the 
defendant,  and  that  such  ratification  made  McCullock  in  law  the 
agent  and  servant  of  the  defendant  in  the  delivery  of  the  coal."  On 
this  finding,  the  court  ruled,  "  that  the  defendant,  by  his  ratification 
of  the  delivery  of  the  coal  by  McCullock,  became  responsible  for  his 
negligence  in  the  delivery  of  the  coal."  The  defendant  excepted  to 
this  ruling,  and  to  nothing  else.  We  must  assume  that  the  finding  was 
warranted  by  the  evidence,  a  majority  of  the  court  being  of  opinion 
that  the  bill  of  exceptions  does  not  purport  to  set  forth  all  the  evi- 
dence on  which  the  finding  was  made.  Therefore,  the  only  question 
before  us  is  as  to  the  correctness  of  the  ruling  just  stated. 

If  we  were  contriving  a  new  code  to-day,  we  might  hesitate  to  say 
that  a  man  could  make  himself  a  party  to  a  bare  tort,  in  any  case, 
merely  by  assenting  to  it  after  it  had  been  committed.  But  we  are  not 
at  liberty  to  refuse  to  cslttj  out  to  its  consequences  any  principle 
which  we  believe  to  have  been  part  of  the  common  law,  simply  because 
the  grounds  of  policy  on  which  it  must  be  justified  seem  to  us  to  be 
hard  to  find,  and  probably  to  have  belonged  to  a  different  state  of 
society. 

It  is  hard  to  explain  why  a  master  is  liable  to  the  extent  that  he 
is  for  the  negligent  acts  of  one  who  at  the  time  really  is  his  servant, 
acting  within  the  general  scope  of  his  employment.  Probably  master 
and  servant  are  "  fained  to  be  all  one  person,"  by  a  fiction  which  is 
an  echo  of  the  patria  potestas  and  of  the  English  frankpledge.    By- 


120  DEMPSEY    V.   CHAMBERS.  [CHAP.   III. 

ington  V.  Simpson,  134  Mass.  169,  170.  Fitz.  Abr.  Corone,  pi.  428. 
Possibly  the  doctrine  of  ratification  is  another  aspect  of  the  same  tra- 
dition. The  requirement  that  the  act  should  be  done  in  the  name  of 
the  ratifying  party  looks  that  way.  New  England  Dredging  Co.  v. 
Kockport  Granite  Co.,  149  Mass.  381,  382 ;  Fuller  &  Trimwell's  case, 
2  Leon.  215,  216;  Sext.  Dec.  5,  12;  De  Eeg.  Jur.,  Keg.  9;  D.  43,  26, 
13;   D.  43,  16,  1,  §  14,  gloss.    See  also  cases  next  cited. 

The  earliest  instances  of  liability  by  way  of  ratification  in  the 
English  law,  so  far  as  we  have  noticed,  were  where  a  man  retained 
property  acquired  through  the  wrongful  act  of  another.  Y.  B.  30 
Ed.  I.  128  (Eolls  ed.) ;  38  Lib.  Ass.  223,  pi.  9;  s.  c.  38  Ed.  III.  18, 
Engettement  de  Garde.  See  Plowd.  8  ad  fin.,  27,  31;  Bract,  fol. 
158  b,  159  a,  171  b;  12  Ed.  IV.  9,  pi.  23.  But  in  these  cases  the  de- 
fendant's assent  was  treated  as  relating  back  to  the  original  act,  and 
at  an  early  date  the  doctrine  of  relation  was  carried  so  far  as  to  hold 
that,  where  a  trespass  would  have  been  justified  if  it  had  been  done 
by  the  authority  by  which  it  purported  to  have  been  done,  a  subsequent 
ratification  might  justify  it  also.  Y.  B.  7  Hen.  IV.  34,  pi.  1.  This 
decision  is  qualified  in  Fitz.  Abr.  Bayllye,  pi.  4,  and  doubted  in  Bro. 
Abr.  Trespass,  pi.  86 ;  but  it  has  been  followed  or  approved  so  con- 
tinuously, and  in  so  many  later  cases,  that  it  would  be  hard  to  deny 
that  the  common  law  was  as  there  stated  by  Chief  Justice  Gascoigne. 
Godbolt,  109,  110,  pi.  129;  s.  c.  2  Leon.  196,  pi.  246;  Hull  v.  Pick- 
ersgill,  1  Brod.  &  Bing.  282 ;  Muskett  v.  Drummond,  10  B.  &  C.  153, 
157;  Buron  v.  Denman,  2  Exch.  167,  188;  Secretary  of  State  in 
Council  of  India  v.  Kamachee  Boye  Sahaba,  13  Moore,  P.  C.  22,  86 ; 
Cheetham  v.  Mayor  of  Manchester,  L.  E.  10  C.  P.  249 ;  Wiggins  v. 
United  States,  3  Ct.  of  CI.  412. 

If  we  assume  that  an  alleged  principal,  by  adopting  an  act  which 
was  unlawful  when  done,  can  make  it  lawful,  it  follows  that  he 
adopts  it  at  his  peril,  and  is  liable  if  it  should  turn  out  that  his  pre- 
vious command  would  not  have  justified  the  act.  It  never  has  been 
doubted  that  a  man's  subsequent  agreement  to  a  trespass  done  in  his 
name  and  for  his  benefit  amounts  to  a  command,  so  far  as  to  make  him 
answerable.  The  ratihabitio  mandato  comparatur  of  the  Eoman 
lawyers,  and  the  earlier  cases  (D.  46,  3,  12,  §  4;  D.  43,  16,  1,  §  14: 
Y.  B.  30  Ed.  I.  128)  has  been  changed  to  the  dogma  cequiparatur 
ever  since  the  days  of  Lord  Coke.  4  Inst.  317.  See  Bro.  Abr.  Trespass, 
pi.  113;  Co.  Lit.  207  a;  Wingate's  Maxims,  124;  Com.  Dig.  Tres- 
pass, C,  1;  Eastern  Counties  Eailway  v.  Broom,  6  Exch.  314,  326, 
327;   and  cases  hereafter  cited. 

Doubts  have  been  expressed,  which  we  need  not  consider,  whether 
this  doctrine  applied  to  the  case  of  a  bare  personal  tort.  Adams  .v. 
Freeman,  9  Johns.  117,  118;  Anderson  and  Warberton,  JJ.,  in 
Bishop  V.  Montague,  Cro.  Eliz.  824.  If  a  man  assaulted  another  in 
the  street  out  of  his  own  head,  it  would  seem  rather  strong  to  say 


CHAP.    III.]  LEGAL   EFFECTS   OF    RATIFICATION.  121 

that,  if  he  merely  called  himself  my  servant,  and  I  afterwards  as- 
sented, without  more,  our  mere  words  would  make  me  a  party  to  the 
assault,  although  in  such  cases  the  canon  law  excommunicated  the 
principal  if  the  assault  was  upon  a  clerk.  Sext.  Dec.  5,  11,  23.  Per- 
haps the  application  of  the  doctrine  would  be  avoided  on  the  ground 
that  the  facts  did  not  show  an  act  done  for  the  defendant's  benefit. 
Wilson  V.  Barker,  1  New.  &  Man.  409 ;  s.  c.  4  B.  &  Ad.  614,  et  seq.j 
Smith  V.  Lozo,  42  Mich.  6.  As  in  other  cases  it  has  been  on  the 
ground  that  they  did  not  amount  to  such  a  ratification  as  was  neces- 
sary.   Tucker  v.  Jerris,  75  Me.  184;  Hyde  v.  Cooper,  26  Vt.  552. 

But  the  language  generally  used  by  judges  and  text-writers,  and 
such  decisions  as  we  have  been  able  to  find,  is  broad  enough  to  cover 
a  case  like  the  present  when  the  ratification  is  established.  Perley  v. 
Georgetown,  7  Gray,  464;  Bishop  v.  Montague,  Cro.  Eliz.  824; 
Saunderson  v.  Baker,  2  Bl.  832;  s.  c.  3  Wils.  309;  Barker  v. 
Braham,  2  Bl.  866,  868 ;  s.  c.  3  Wils.  368 ;  Badkin  v.  Powell,  Cow- 
per,  476,  479;  Wilson  v.  Tumman,  6  Man.  &  G.  236,  242;  Lewis 
V.  Eead,  13  M.  &  W.  834;  Buron  v.  Denman,  2  Exch.  167,  188; 
Bird  V.  Brown,  4  Exch.  786,  799;  Eastern  Counties  Eailway  v. 
Broom,  6  Exch.  314,  326,  327;  Eoe  v.  Birkenhead,  Lancashire,  & 
Cheshire  Junction  Eailway,  7  Exch.  36,  41 ;  Ancona  v.  Marks,  7  H. 
&  N.  686,  695;  Condit  v.  Baldwin,  21  N.  Y.  219,  225;  Exum  v. 
Brister,  35  Miss.  391;  Galveston,  Harrisburg,  &  San  Antonio  Eail- 
way V.  Donahoe,  56  Texas,  162;  Murray  v.  Lovejoy,  2  Cliff.  191, 
195 ;  see  Lovejoy  v.  Murray,  3  Wall.  1,  9 ;  Story  on  Agency,  §§  455, 
456. 

The  question  remains  whether  the  ratification  is  established.  As 
we  understand  the  bill  of  exceptions,  McCullock  took  on  himself  to 
deliver  the  defendant's  coal  for  his  benefit  and  as  his  servant,  and  the 
defendant  afterwards  assented  to  McCullock's  assumption.  The  rati- 
fication was  not  directed  specifically  to  McCullock's  trespass,  and  that 
act  was  not  for  the  defendant's  benefit  if  taken  by  itself,  but  it  was 
so  connected  with  McCullock's  employment  that  the  defendant  would 
have  been  liable  as  master  if  McCullock  really  had  been  his  servant 
when  delivering  the  coal.  We  have  found  hardly  anything  in  the 
books  dealing  with  the  precise  case,  but  we  are  of  opinion  that  con- 
sistency with  the  whole  course  of  authority  requires  us  to  hold  that 
the  defendant's  ratification  of  the  employment  established  the  relation 
of  master  and  servant  from  the  beginning,  with  all  its  incidents,  in- 
cluding the  anomalous  liability  for  his  negligent  acts.  See  Coomes 
V.  Houghton,  102  Mass.  211,  213,  214;  Cooley,  Torts,  128,  129. 
The  ratification  goes  to  the  relation,  and  establishes  it  ah  initio.  The 
relation  existing,  the  master  is  answerable  for  torts  which  he  has  not 
ratified  specifically,  just  as  he  is  for  those  which  he  has  not  com- 
manded, and  as  he  may  be  for  those  which  he  has  expressly  forbidden. 
In  Gibson's  case,  Lane,  90,  it  was  agreed  that,  if  strangers  as  Servants 


122  WOOD  V.   MCCAIN.  [CHAP.   III. 

to  Gibson,  but  without  his  precedent  appointment,  had  seized  goods 
by  color  of  his  office,  and  afterwards  had  misused  the  goods,  and  Gib- 
son ratified  the  seizure,  he  thereby  became  a  trespasser  ab  initio, 
although  not  privy  to  the  misusing  which  made  him  so.  And  this 
proposition  is  stated  as  law  in  Com.  Dig.  Trespass,  C,  1;  Elder  v. 
Bemis,  2  Met.  599,  605.  In  Coomes  v.  Houghton,  102  Mass.  211, 
the  alleged  servant  did  not  profess  to  act  as  servant  to  the  defendant, 
and  the  decision  was  that  a  subsequent  payment  for  his  work  by  the 
defendant  would  not  make  him  one.  For  these  reasons,  in  the 
opinion  of  a  majority  of  the  court,  the  exceptions  must  be  overruled. 

Exceptions  overruled. 


WOOD   V.   McCAIN. 

7  Ala.  800.     1845. 

One  Revis  was  appointed  Stedman's  agent  to  collect  book  ac- 
counts. In  excess  of  his  authority  he  transferred  the  accounts  to 
Wood  to  secure  the  latter  against  possible  loss  as  surety  on  Stedman's 
note.  Wood  notified  the  debtors  of  Stedman  of  the  assignment,  and, 
among  others,  notified  one  John  S.  Smith.  Thereafter  McCain,  a 
creditor  of  Stedman,  garnisheed,  or  attached  Smith's  debt  to  Stedman. 
Later  Stedman  ratified  the  assignment  to  Wood.  Smith  now  required 
Wood  to  appear  and  contest  with  McCain  the  right  of  the  money 
owing  to  Stedman.  The  court  charged  that  Eevis  had  no  authority 
to  make  the  assignment  to  Wood  and  that  as  against  McCain  the 
subsequent  ratification  by  Stedman  was  ineffectual. 

Collier,  C.  J.  .  .  .  Now  although  the  general  rule  is,  that  the 
ratification  relates  back  to  the  time  of  the  inception  of  the  transaction, 
and  has  a  complete  retroactive  efficacy,  or  as  the  maxim  is,  omnis 
ratihabitio  retrotrdhitur,  yet  this  doctrine  is  not  universally  applicable. 
Thus,  if  third  persons  acquire  rights,  after  the  act  is  done  and  before 
it  has  received  the  sanction  of  the  principal,  the  ratification  cannot 
operate  retrospectively  so  as  to  overreach  and  defeat  those  rights.  If 
the  law  were  otherwise,  the  constituent  would  be  invested  with  the 
power  of  preferring  his  creditor  in  the  present  case,  although  his 
means  of  payment  has  been  seized  by  an  attaching  creditor.  We  have 
seen  that  the  assignment  in  question  was  inoperative  and  ineffectual 
for  all  purposes,  until  after  the  return  of  Stedman  when  he  approved 
it.  This  act  of  approval  was  entirely  voluntary,  and  could  not  have 
been  coerced.  Previous  to  its  ratification,  the  plaintiff  below  acquired 
a  lien  upon  the  debt  owing  by  the  garnishee,  which  could  not  have 
been  defeated  at  the  mere  volition  of  the  defendant  in  the  judgment. 
To  show  that  the  ratification  of  an  unauthorized  act  of  an  agent  is 


CHAP.   III.]  LEGAL   EFFECTS   OF   RATIFICATION.  133 

thus  limited  in  its  application,  we  need  but  refer  to  Story  on  Agency, 
241  to  244;   Paley  on  Agency,  345  to  347. 

The  view  we  have  taken  is  decisive  of  the  cause.  We  will  not  stop 
to  inquire,  whether  if  Eevis  had  authority  to  dispose  of  the  accounts 
of  his  principal  to  indemnify  a  surety  of  the  latter,  an  assignment 
(followed  by  a  delivery  of  the  accounts)  would  be  invalid,  because 
it  was  executed  under  seal  in  virtue  of  a  parol  authority.  Without 
adding  more,  the  result  is  that  the  judgment  must  be  affirmed. 


GELATT   V.   EIDGE. 

117  Mo.  553.     1893. 

Action  to  recover  compensation  for  services  as  a  real  estate  agent. 
Judgment  for  plaintiff.     Defendant  appeals. 

Plaintiff  was  authorized  to  sell  defendant's  land  upon  prescribed 
terms.  He  sold  with  some  variation  from  those  terms.  Defendant 
at  first  refused  to  carry  out  the  sale  as  made,  but  later  did  so  upon 
the  purchaser's  making  some  slight  concessions. 

Macfarlane,  J,  (omitting  other  matters).  It  is  next  contended 
that  there  can  be  no  recovery,  for  the  reason  that  the  contract  made 
by  the  agent  varied  from  the  terms  of  his  authority,  and  that  this 
would  be  the  case  though  the  terms  of  the  sale  made  were  more  ad- 
vantageous to  the  principal  than  was  required  under  the  letter  of 
authority.  There  is  no  doubt,  as  a  general  principle  of  law,  that  an 
agent  must  act  within  the  terms  of  his  authority,  and  a  substantial 
variance  therefrom  would  defeat  his  right  to  compensation,  though 
such  variance  may  have  been  advantageous  to  his  principal.  Nesbitt 
V.  Helser,  49  Mo.  383.  Yet  it  is  equally  well  settled  that  if  the 
principal  ratify  the  contract  made  by  the  agent,  the  substituted  terms 
become  a  part  of  the  original  agreement  and  can  be  enforced  as  such. 
Woods  V.  Stephens,  46  Mo.  555,  and  cases  cited. 

The  evidence  tends  to  prove  —  indeed  it  is  very  conclusive  —  that 
defendant  did  fully  approve  and  ratify  the  terms  of  sale  as  made  by 
plaintiff,  and  under  the  instructions  the  jury  must  have  so  found. 

The  suit  was  not  upon  a  quantum  meruit,  as  claimed  by  defendant, 
but  was  upon  the  original  contract  as  made  and  supplemented  by  the 
ratification  and  acceptance  of  defendant.  If,  as  before  stated,  the 
departure,  by  the  agent,  from  the  terms  of  the  authority  given  him, 
became,  upon  approval  and  ratification  by  the  principal,  a  part  of 
the  original  contract,  the  compensation,  if  fixed  therein,  should  be 
measured  thereunder.    Nesbitt  v.  Helser,  supra.  .  .  . 

Judgment  affirmed. 


124  TRIGGS   V.   JOXES  AND  OTHEBS.  [CHxVP.   III. 

BRAY   V.   GUNN. 

53  Ga.  144.     1874. 

Action  against  defendant,  as  agent,  for  damages  resulting  from 
his  violation  of  instructions.    Judgment  for  defendant. 

Plaintiffs  sent  defendant  a  draft  for  collection  with  instructions. 
Defendant  collected,  but  did  not  obey  instructions  as  to  the  currency 
in  which  payment  should  be  received.  Defendant  informed  plaintiffs 
of  what  he  had  done,  and  plaintiffs  did  not  dissent. 

McCay^  J.  If  an  agent,  acting  in  good  faith,  disobey  the  instruc- 
tions of  his  principal,  and  promptly  informs  the  principal  of  what 
he  has  done,  it  is  the  duty  of  the  principal,  at  the  earliest  opportunity, 
to  repudiate  the  act  if  he  disapprove.  Silence  in  such  a  case  is  a 
ratification.  See  the  case  of  McLendon  v.  Wilson  &  Callaway,  52  Ga. 
41,  from  Troup  County.  Taking  this  correspondence  altogether,  we 
think  the  jury  had  a  right  to  find  that  the  plaintiffs  were  satisfied 
with  the  act  of  Gunn  in  taking  the  money  in  the  Kimball  fimds,  and 
that  their  dissatisfaction  is  an  afterthought  in  consequence  of  the 
failure  of  Kimball.  The  evidence  is  convincing  that  if  they  had 
promptly  notified  Gunn  of  their  dissatisfaction,  he  could  have  saved 
himself.  Both  the  parties  here  were  commercial  men,  and  the  rule 
is  a  fair  and  reasonable  one  that  it  is  the  duty  of  the  principal 
promptly  to  answer  the  letters  of  his  agent,  and  if  he  do  not  do  so  he 
is  presumed  to  acquiesce  in  what  the  agent  informs  him  he  has  done 
or  proposes  to  do. 

Judgment  affirmed. 

TRIGGS   V.   JOJ^ES  and  others. 

46  Minn.  277.     1891. 

Plaintiff  recovered  a  judgment  against  defendant  Jones  for  dam- 
ages resulting  from  the  unauthorized  delivery  by  him  of  a  deed 
placed  in  his  hands  in  escrow.  From  an  order  denying  a  new  trial 
defendant  appeals. 

The  deed  was  executed  in  payment  of  prospective  stock  in  a  cor- 
poration to  be  formed.  Defendant  was  instructed  to  hold  the  deed 
in  escrow  until  the  corporation  was  organized  and  the  stock  issued 
and  delivered.  Defendant  delivered  the  deed  at  once  and  the  gran- 
tee conveyed  the  property  to  another  person.  The  whole  corporate 
scheme  failed  and  plaintiff  never  received  anything  for  his  property. 

Mitchell,  J.  .  .  .  The  remaining,  and  really  the  only  important, 
question  in  the  case  is  as  to  the  alleged  ratification  by  plaintiff  of  the 


CHAP.    Ill,]  LEGAL   EFFECTS  OF  RATIFICATION.  V2b 

act  of  Jones  in  delivering  the  deed.  It  is  claimed  that,  after  knowl- 
edge of  the  facts,  plaintiff  ratified  Jones's  act,  and  that  such  rati- 
fication operated  the  same  as  original  authority,  and  absolved  Jones 
from  all  liability,  even  if  the  delivery  of  the  deed  was  unauthorized 
when  made.  The  court  finds  that  Jones  immediately  informed  plain- 
tiff (by  letter  dated  August  8,  1887)  that  he  had  delivered  the  deed 
to  Cook,  and  that  plaintiff  did  not  at  once  repudiate  the  act,  and  never 
prior  to  the  commencement  of  this  action  notified  Cook  that  he  re- 
pudiated, but  left  the  deed  in  the  possession  of  Cook,  and  joined  with 
Jones  in  taking  the  preliminary  steps  in  the  formation  of  the  con- 
templated corporation,  in  which  it  had  been  agreed  that  plaintiff  was 
to  receive  stock  as  already  stated.  It  was  because  of  this  delay  to 
promptly  repudiate  the  act  of  Jones  that  the  court  refused  to  grant 
plaintiff'  relief  against  defendant  George,  who  was  an  innocent  pur- 
chaser. But  while  the  facts  found  may  be  evidence  of  a  ratification, 
they  do  not,  as  a  matter  of  law,  amount  to  that,  at  least  in  favor  of 
Jones,  the  party  who  committed  the  unauthorized  act.  It  is,  however, 
assigned  as  error  that  the  court  failed  to  find  that  plaintiff  had  rati- 
fied the  delivery  of  the  deed.  It  is  impracticable  to  state,  or  even 
discuss,  the  evidence  at  length.  A  careful  perusal  of  it  satisfies  us 
that,  while  plaintiff  was  informed  by  letter  as  early  as  August,  1887, 
that  the  deed  had  been  delivered,  yet  this  information  was  accom- 
panied and  frequently  followed  by  statements  and  assurances  from 
Jones  to  the  effect  that  the  original  arrangement  was  being  or  would 
be  carried  out,  so  that  he  would  get  his  stock  as  had  been  agreed,  and 
that  Cook  would  return  the  deed  or  reconvey  the  property  if  he 
(plaintiff)  desired,  etc.,  which  were  calculated  to  keep  plaintiff  quiet 
and  allay  any  possible  fears  on  his  part ;  and  that,  influenced  and  in- 
duced by  these  considerations,  he  made  no  express  repudiation  of 
Jones's  act,  but  let  matters  rest,  hoping  and  expecting  that  the  deal 
would  still  be  consummated  according  to  agreement,  and  he  get  the 
stock  to  which  he  would  be  entitled;  and  that  with  this  hope  and 
expectation,  and  at  the  instance  of  Jones,  in  whom  he  seemed  still 
to  have  implicit  confidence,  he  sent  a  proxy  to  one  Mahle,  authoriz- 
ing him  to  subscribe  for  stock  in  his  name,  and  to  vote  it  for  officers 
of  the  company  at  the  meeting  for  organization;  but  that  finally, 
having  discovered  that  the  whole  scheme  had  fallen  through,  and 
would  never  be  consummated,  he  brought  this  action  to  recover  either 
the  land  or  damages.  At  least,  the  evidence  is  such  that  it  would 
have  justified  the  court  in  taking  this  view  of  the  facts. 

There  is  no  doubt  that  the  general  rule  is  that,  by  a  ratification  of 
an  unauthorized  act,  the  principal  absolves  the  agent  from  all  re- 
sponsibility for  loss  or  damage  growing  out  of  the  unauthorized 
transaction,  and  that  thenceforward  the  principal  assumes  the  re- 
sponsibility of  the  transaction  with  all  its  .advantages  and  all  its 
burdens.     Neither  is  there  any  question  but  that,  where  the  rights 


126  TRIGGS   V.   JONES  AND  OTHERS.  [CHAP.   III. 

and  obligations  of  third  persons  may  depend  on  his  election,  the 
principal  is  bound  to  act,  and  give  notice  of  his  repudiation  or  dis- 
affirmance of  the  unauthorized  act  at  once,  or  at  least  within  a 
reasonable  time  after  knowledge  of  the  act;  and,  if  he  does  not  so 
dissent,  his  silence  will  afford  conclusive  evidence  of  his  approval. 
Such  a  rule  is  necessary  to  protect  the  rights  of  third  parties  who 
have  dealt  with  the  agent.  If  the  principal,  after  knowledge,  remains 
entirely  passive,  it  is  but  just,  when  the  protection  of  third  parties 
requires  it,  to  presume  that  what,  upon  knowledge,  he  has  failed  to 
repudiate,  he  has  tacitly  confirmed.  But  it  is  apparent  that  the 
reasons  for  such  a  rule  do  not  apply  with  equal  force  in  favor  of  the 
agent  himself,  who  has  wrongfully  committed  the  unauthorized  act. 
Consequently  mere  passive  inaction  or  silence,  which  would  amount  to 
an  implied  ratification  in  favor  of  third  parties,  might  not  amount 
to  that  in  favor  of  the  agent,  so  as  to  absolve  him  from  liability  to  his 
principal  for  loss  or  damage  resulting  from  the  unauthorized  act, 
especially  if  such  inaction  or  failure  to  immediately  disaffirm  was 
induced  by  the  assurances  or  persuasion  of  the  agent  himself.  Nor 
in  this  case  does  the  affirmative  action  of  the  plaintiff,  after  knowledge 
of  the  delivery  of  the  deed,  in  taking  part  in  the  preliminary  steps 
for  the  organization  of  the  contemplated  stock  company,  of  itself 
amount  to  a  ratification  of  the  unauthorized  act.  Such  steps  were 
right  in  the  line  of  the  original  agreement  between  the  parties,  and 
were  designed  to  carry  it  into  effect.  Induced,  as  such  action  prob- 
ably was,  by  the  assurances  of  Jones  that  the  enterprise  would  still 
go  on,  and  plaintiff  get  his  stock,  it  really  amounted  to  nothing  more 
than  an  effort  on  plaintiff's  part,  after  knowledge  of  Jones's  deviation 
from  his  instructions,  to  avoid  loss  thereby,  which  is  not  such  a  ratifi- 
cation as  will  relieve  the  agent.  Mechem,  Agency,  §  173.  Upon  proof 
that  Jones's  act  was  without  original  authority,  the  burden  was  upon 
him  to  show  such  a  subsequent  ratification  as  would  relieve  him  from 
liability.  The  court  has  not  found  any  such  ratification,  and,  in  our 
opinion,  under  the  evidence,  he  was  justified  in  finding,  as  he  in 
effect  does,  that  there  was  none.  Order  affirmed.^ 

'  See  also  Coursolle  v.  Weyerhauser,  ante,   p.   17;   Bray  t;.  Gunn,  ante,  p.  124; 
School  District  v.  Aetna  Ins.  Co.,  62  Me.  330. 


CHAP.   IV.]      FOKMATION   OF   THE  BELATION   BY   ESTOPPEL.  127 


CHAPTEE   ly. 

'FOEMATION   OF    THE    RELATION    BY   EsTOPPEL.* 

EDGERTON   v.   THOMAS. 

9  N.  Y.  40.     1853. 

Action  for  conversion  by  mortgagee  of  Mrs.  Strong  against  a 
sheriff  who  levied  on  the  property  as  that  of  her  husband.  When  the 
property  was  mortgaged  the  husband  stood  by  and  assented.  Judg- 
ment for  plaintiff. 

WiLLAHD,  J.,  delivered  the  opinion  of  the  court. 

As  between  the  plaintiff  in  this  case  and  Charles  L.  Strong,  the  bill 
of  sale  and  mortgage  were  a  valid  and  effectual  transfer  of  the  prop- 
erty from  the  latter  to  the  former.  Strong  stood  by  and  saw  his  wife 
execute  those  instruments  with  a  view  to  secure  the  plaintiff  for  his 
cash  advances  to  her,  and  assented  to  it.  She  then  became  his  agent 
for  that  purpose,  and  he  is  as  much  bound  as  if  he  had  executed  them 
himself.  In  Hopkins  v.  Mollineux  (4  Wend.  465)  it  was  held  that 
the  wife  may  act  as  the  agent  of  her  husband,  and  a  subsequent  ac- 
knowledgment or  ratification  of  her  acts  by  the  husband  is  evidence 
of  and  equivalent  to  an  original  authority.  Church  v.  Landers,  10 
Wend.  79 ;  Eiley  v.  Suydam,  4  Barb.  222 ;  Prestwich  v.  Marshall,  4 
C.  &  P.  594;  Miller  v.  Delamater,  12  Wend.  433.  This  case  is 
stronger  than  any  of  those  cited,  as  the  husband  was  by  and  expressly 
assented  to  the  act  of  the  wife.  It  is  therefore  as  obligatory  upon  him 
as  if  it  had  been  his  personal  act.  .  .  . 

Whatever  may  have  been  the  decision  of  the  court  below  on  the 
other  points,  the  one  just  considered  is  decisive  of  the  action.  If  the 
property  belonged  to  the  plaintiff  at  the  time  of  the  levy  and  sale,  and 
not  to  Strong,  the  execution  debtor,  the  plaintiff  was  entitled  to 
recover. 

Morse,  J.,  was  not  present. 

All  the  other  judges  concurring.  Judgment  affirmed.^ 

^  Many  of  the  cases  in  Chapter  IX  also  Involve  considerations  of  the  doctrine  of 
estoppel  as  applied  to  the  law  of  principal  and  agent. 

2  This  is  rather  a  case  of  ostensible  ownership  than  of  ostensible  agency,  al- 
though such  cases  are  frequently  treated  as  if  involving  an  agency  by  estoppel.  It 
is  perhaps  better  to  say  that  the  husband  (as  well  as  those  claiming  under  him)  is 
estopped  to  deny  that  the  wife  had  the  title  she  professed  to  have  when  she  mort- 
gaged the  goods  to  the  plaintiff.  See  Biggs  v.  Evans,  [1894]  1  Q.  B.  88,  post, 
p.  516.  —  Ed 


128  STEFFENS   V.   NELSON.  [CHAP.   FV. 

STEFFENS   v.   NELSON. 

94  Minn.  365.     1905. 

Action  to  foreclose  a  mechanic's  lien  for  material  furnished  by 
Steffens  to  a  contractor  for  use  in  the  building  of  Nelson's  house. 
Other  lien  holders  were  made  defendants  with  Nelson.  Nelson  paid 
the  contractor  upon  his  producing  Steffens'  and  others'  receipts.  The 
contractor  procured  these  receipts  by  giving  his  checks,  payable  at  a 
later  date.  When  the  checks  were  due  they  were  not  paid  and  Steffens 
and  others  filed  liens  on  Nelson's  house.  The  trial  court  held  that  all 
whose  receipts  were  present  when  Nelson  paid  the  contractor  were 
estopped,  but  that  no  valid  and  binding  receipt  from  plaintiff  was 
present. 

The  plaintiff  Steffens  had  no  office;  he  had  placed  the  number  of 
his  residence  on  his  cards  and  billheads.  The  agent  of  the  contractor 
called  there  in  Steffens'  absence,  gave  his  wife  a  check  of  the  con- 
tractor, dated  ahead,  for  the  amount  of  Steffens'  claim,  and  directed 
her  to  sign  a  receipt.  She  signed  that  receipt,  "  Peter  Steffens,  Maria 
Steffens."  She  had  no  express  authority  from  her  husband  so  to  do. 
This  receipt  was  taken  by  the  contractor  to  the  owner  and  agent  of 
the  mortgagee,  and  was  present  at  the  time  of  settlement  with  the 
contractor  about  noon  on  Saturday,  April  12th.  On  the  afternoon  of 
that  day  the  wife  gave  her  husband  the  contractor's  check,  and  ex- 
plained that  she  had  to  sign  a  paper  for  it.  The  husband  took  the 
check  and  deposited  it ;  that  check  was  never  paid.^ 

Jaggard,  J.  (after  stating  the  facts).  The  wife,  like  another  per- 
son, may  be  made  an  agent  for  her  husband,  and  as  such  impose  upon 
him  obligations  by  his  authority,  express  or  implied,  precedent  or  sub- 
sequent. Hopkins  v.  Mollineux,  4  Wend.  465 ;  Benjamin  v.  Benja- 
min, 15  Conn.  347,  39  Am.  Dec.  384;  Willingham  v.  Simons,  1 
Desaus.  (S.  C.)  272. 

The  proper  decision  of  the  question  thus  presented  depends  upon 
consideration  of  a  neglected  distinction  between  ratification  and  es- 
toppel. Lord  Coke  said,  "  The  name  '  estoppel '  or  *  conclusion '  was 
given  because  a  man's  own  act  or  acceptance  stoppeth  or  closeth  up 
his  mouth  to  allege  or  plead  the  truth."  However  much  this  defini- 
tion may  have  been  criticised  as  vicious  (Everest  &  Strode  on  Estop- 
pel, 9-16;  Bigelow  on  Estoppel,  5),  it  is  a  brief  statement  of  the 
effect  of  the  essential  principle  of  estoppel,  viz.j  "  that,  wherever  one 
of  two  innocent  persons  must  suffer  by  the  act  of  a  third,  he  who  en- 
ables such  third  person  to  occasion  the  loss  must  sustain  it."  Lick- 
barrow  V.  Mason,  2  T,  E.  63 ;  1  Smith,  Leading  Cas.  759 ;  Ewart  on 
Estoppel,  9.  Ratification,  on  the  other  hand,  means  confirmation. 
*'  To  ratify  is  to  give  sanction  and  validity  to  something  done  with- 

1  Facts  and  a  part  of  the  opinion  concerning  other  lien  holders  are  omitted. 


CHAP.   IV.]       FOUMATION   OF   THE   RELATION   BY   ESTOPPEL.  129 

out  authority."  Evans,  Principal  and  Agent  (Bedford's  ed.)  90. 
The  underlying  principle  upon  which  liability  for  ratification  attaches 
is  that  he  who  has  commanded  is  legally  responsible  for  the  direct 
results  and  for  the  natural  and  probable  consequences  of  his  conduct, 
and  that  it  is  immaterial  whether  that  command  was  given  before  or 
after  the  conduct. 

The  substance  of  estoppel  is  the  inducement  to  another  to  act 
to  his  prejudice.  The  substance  of  ratification  is  confirmation  after 
conduct.  "  This  is  enough,"  said  Mr.  Bigelow,  "  to  indicate  that 
there  may  be  danger  in  using  the  term  *  estoppel '  freely.  It  is 
common  enough  at  present  to  speak  of  acquiescence  and  ratification 
as  an  estoppel.  Neither  the  one  nor  the  other,  however,  can  be 
more  than  part  of  an  estoppel,  at  best.  An  estoppel  is  a  legal  conse- 
quence —  a  right  —  arising  from  acts  or  conduct,  while  acquiescence 
and  ratification  are  but  facts  presupposing  a  situation  incomplete  in 
its  legal  aspect,  t.  e.,  not  as  yet  attended  with  full  legal  consequences. 
The  most  that  acquiescence  or  ratification  can  do — and  this  either  may 
under  certain  circumstances  do — is  to  supply  an  element  necessary  to 
the  estoppel,  and  otherwise  wanting,  as,  e.  g.,  knowledge  of  the  facts 
at  the  time  of  making  a  misrepresentation.  But  each  stands  upon  its 
own  grounds,  and  must  be  made  out  in  its  own  way,  not  necessarily 
in  the  way  required  by  the  ordinary  estoppel  by  conduct."  Bigelow 
on  Estoppel  (5th  ed.)  pp.  456,  457.  And  see  Eeinhart  on  Agency, 
§  101. 

An  unauthorized  act  may  be  made  to  operate  by  ratification  as  an 
estoppel  upon  the  person  in  whose  behalf  it  was  done.  That  ratifica- 
tion presupposes  knowledge  on  the  part  of  such  person  ratifying.  If 
he  intentionally  ratify  what  another  has  done  for  him  without  author- 
ity, and  actually  or  constructively  knows  also  of  the  circumstances 
connected  with  the  unauthorized  acts  which  are  the  basis  of  the  es- 
toppel, he  should  clearly  be  held  bound  thereby.  See  Dimond  v.  Man- 
heim,  61  Minn.  178,  63  N.  W.  495. 

In  this  case  the  acceptance  of  the  check  given  to  plaintiff  by  his 
wife  operated  to  ratify  the  receipt  signed  by  her  for  him.  In  the  eyes 
of  the  law,  at  least,  he  knew  that  this  receipt  would  be  used  as  evi- 
dence of  the  payment  of  the  debt  by  the  contractor  to  whom  it  was 
delivered.  He  is  responsible  for  the  direct  results  and  the  natural 
and  probable  consequences  of  the  act  he  has  ratified.  His  situation 
is  not  therefore  different,  in  law,  from  that  of  other  creditors  who 
signed  receipts  before  the  date  of  settlement,  and  who,  as  he  did  also, 
accepted  and  now  retain  the  check  of  the  contractor.  He  is  not  en- 
titled to  recover  because  of  his  ratification.  See  Ewart  on  Estoppel, 
133,  137,  139. 

The  judgment  appealed  from  is  affirmed,  except  as  to  the  plaintiff, 
Steffens,  and  the  defendants  Delamater  &  Son.  As  to  them,  let  judg- 
ment be  entered  in  accordance  with  this  opinion. 

9 


130  COLUMBIA   MILL   CO.    V.   NAT.   BANK   OF   COMM.      [CHAP.   TV, 


COLUMBIA   MILL   CO.   v.   NATIONAL  BANK 
OF   COMMEKCE. 

52  Minn.  224.     1893. 

Appeal  by  defendant,  the  National  Bank  of  Commerce,  from  an 
order  of  the  District  Court  of  Hennepin  County,  denying  its  appli- 
cation for  a  new  trial. 

GiLFiLLAN,  C.  J.  The  plaintiff  was  a  corporation  in  the  business, 
at  Minneapolis,  of  manufacturing  and  selling  flour,  and  the  defend- 
ant was  a  bank  at  that  place. 

The  action  is  for  the  conversion  of  nineteen  checks  drawn  by  dif- 
ferent persons  or  firms  upon  difllerent  banks  or  concerns,  each  payable 
to  the  order  of,  and  the  property  of,  the  plaintiff.  The  allegations 
of  the  complaint  are  that  one  Leo  Heilpem  feloniously  abstracted 
and  purloined  the  checks  from  plaintiff,  wrongfully  and  without 
authority  impressed  on  the  back  of  each,  with  a  rubber  stamp,  the 
words  "  Columbia  Mill  Co.,"  and  wrote  underneath  his  name,  L. 
Heilpern,  and  wrongfully  sold  and  disposed  of  them  to  defendant, 
which  collected  and  appropriated  to  its  own  use  the  money  called  for 
by  them.  Heilpern  was  plaintiff's  bookkeeper  and  cashier;  that  is, 
he  had  charge  of  its  books  and  its  "  petty  cash,"  i.  e.,  the  payments 
received  upon  its  sales  at  retail. 

The  sole  controversy  was  upon  Heilpern's  authority  to  dispose  of 
and  receive  the  money  for  the  checks.  It  was  conceded  that  he  had 
no  express  authority  to  do  so,  and  the  question  was  narrowed  to  that 
of  implied  authority,  and  the  further  question,  if  it  be  not  included 
in  that,  as  to  whether  the  plaintiff  had  either  intentionally  or  negli- 
gently so  conducted  its  business  with  defendant,  or  permitted  it  to  be 
so  conducted,  that  it  had  a  right  in  good  faith  to  believe,  and  did 
believe,  that  Heilpern  had  the  authority  he  assumed  to  exercise,  and, 
acting  on  and  because  of  such  belief,  received  the  transfer  of  the 
checks,  and  paid  him  the  money. 

It  appeared  that,  when  the  relation  of  banker  and  patron  between 
defendant  and  plaintiff  began,  the  latter  left  in  the  signature  book 
of  the  former  the  signature  of  S.  Zeidler,  its  treasurer,  as  of  the  only 
person  authorized  to  sign  for  it  in  its  transactions  with  the  bank,  and 
except  during  a  short  period,  when  he  was  absent,  his  was  the  only 
signature  in  the  bank  for  that  purpose. 

It  also  appeared  that  there  grew  up  and  continued  for  years  a  usage 
that  when  plaintiff  sent  to  the  bank,  for  deposit  to  its  credit,  checks 
payable  to  its  order,  it  made  no  other  indorsement  on  them  than  by 
impressing  them  with  a  rubber  stamp.  Whether  there  was  a  similar 
usage  in  any  other  bank  is  immaterial.  It  existed  between  these 
parties. 


CHAP.   IV.]       FORMATION   OF   THE   RELATION   BY  ESTOPPEL.  131 

It  also  appeared  that  Heilpem  and  his  predecessors  in  employment 
as  bookkeeper  and  cashier,  extending  over  a  period  of  two  or  three 
years,  were  accustomed  to  take  or  send  to  the  bank,  and  transfer  to 
it,  and  receive  the  money  for,  checks,  mostly  small  ones,  payable 
to  its  order,  with  no  indorsement  except  the  stamp,  or  with  none 
at  all. 

It  was  upon  this  custom  mainly  that  defendant  relied  to  show 
implied  or  at  least  apparent  authority  in  Heilpem  to  transfer  the 
checks  without  the  signature  of  Zeidler,  and  receive  the  money  for 
them. 

And  because  one  dealing  with  an  agent  may  show  actual  authority  in 
him,  —  that  is,  such  authority  as  the  principal  in  fact  intended  to  vest 
in  the  agent,  although  such  intention  is  to  be  shown  by  acts  and  con- 
duct, rather  than  by  express  words,  —  without  showing  that  he  (the 
person  dealing  with  the  agent)  knew  when  he  dealt  with  him  of  the 
acts  and  conduct  from  which  the  intention  is  to  be  implied,  it  was 
competent  for  defendant  to  show  the  course  and  manner  of  conduct- 
ing business  in  the  office  of  plaintiff,  so  far  as  the  bookkeepers  and 
cashier  had  charge  of  it.  The  officers  of  plaintiff  testified  that  Heil- 
pem had  no  authority  to  transfer  the  checks  and  receive  the  money, 
and  that  they  never  knew  of  the  bookkeeper  and  cashier  doing  so 
with  plaintiff's  checks.  But  the  jury  were  not  bound  to  their  testi- 
mony. Such  a  manner  of  conducting  the  business  in  the  office  might 
have  been  proved  as  would  have  justified  the  jury  in  finding  that  the 
officers  must  have  known  of  the  custom  of  the  bookkeeper  and  cashier 
in  regard  to  checks;  and  had  that  been  found,  and  that  it  was  ac- 
quiesced in  by  plaintiff,  the  intention  to  vest  authority  might  have 
been  implied. 

For  the  sake  of  convenience,  we  make  a  distinction  between  im- 
plied authority  —  that  is,  such  as  the  principal  in  fact  intends  the 
agent  to  have,  though  the  intention  is  implied  from  the  acts  and  con- 
duct of  the  principal  —  and  apparent  authority,  —  that  is,  such  as, 
though  not  actually  intended  by  the  principal,  he  permits  the  agent  to 
appear  to  have.  The  rule  as  to  apparent  authority  rests  essentially 
on  the  doctrine  of  estoppel.  The  rule  is  that,  where  one  has  rea- 
sonably and  in  good  faith  been  led  to  believe  from  the  appearance  of 
authority  which  a  principal  permits  his  agent  to  have,  and  because 
of  such  belief  has  in  good  faith  dealt  with  the  agent,  the  principal  will 
not  be  allowed  to  deny  the  agency,  to  the  prejudice  of  the  one  so 
dealing. 

One  may  be  estopped  by  his  acts  of  culpable  negligence,  as  well 
as  by  his  intentional  acts;  and  if  through  culpable  negligence  the 
plaintiff  permitted  Heilpem  to  appear  to  the  bank  to  have  authority 
to  transfer  the  checks  and  receive  the  money,  and  the  latter  reasonably 
and  in  good  faith  was  induced  by  such  appearance  to  believe  he  had 
that  authority,  and  on  that  belief  received  and  paid  for  the  checks. 


132  COLUMBIA   MILL   CO.   V.   NAT.   BAXK  OF   COMM.      [CHAP.   IV. 

plaintiff  cannot  deny  the  authority,  for  to  permit  it  to  do  so  would 
sanction  a  fraud. 

The  defendant  complains  that  the  court  in  its  charge  withheld 
from  the  jury  the  proposition  that  the  plaintiff  might  be  bound  by 
the  appearance  of  authority  which  it,  through  negligence,  permitted 
Heilpern  to  have.  .  .  . 

The  court,  at  the  request  of  the  defendant,  charged :  "If  you  find 
that  the  plaintiff  so  conducted  its  business  with  the  defendant  as  to 
lead  the  defendant  reasonably  to  believe  that  Heilpern  possessed  the 
authority  which  he  assumed  to  exercise  in  the  cashing  of  the  checks 
in  questign,  your  verdict  will  be  for  the  defendant."  This,  in  giving 
other  requests  by  defendant,  was  several  times  reiterated  in  substance, 
though  in  different  terms,  sometimes  more  full ;  and,  as  I  think,  left 
it  to  the  jury  to  give  the  specified  effect  to  plaintiff's  conduct  of  its 
business,  though  through  negligence.  The  part  of  the  charge  excepted 
to,  and  claimed  to  have  withdrawn  from  the  jury  the  matter  of  negli- 
gence in  the  conduct  of  the  business  as  bearing  on  the  question  of 
authority,  we  do  not  quote  in  full,  as  it  is  very  long,  and  the  pith  of 
it  may  appear  from  only  a  part  of  it.  After  referring  to  the  transfers 
of  checks  upon  stamped  indorsements  by  the  bookkeepers,  by  Heil- 
pern's  predecessors  and  by  him,  the  court  said:  "The  plaintiff 
claims  that  it  had  no  knowledge  of  such  payment  upon  such  indorse- 
ments. Now,  unless  you  find  from  the  evidence  that  the  plaintiff  or 
its  duly-authorized  oflScers  in  the  present  instance  (and  the  duly- 
authorized  officers  would  be  only  the  president,  vice-president,  general 
manager,  secretary,  treasurer),  or  either  of  them,  knew  of  the  manner 
in  which  such  indorsements  and  payments  had  been  made,  you  cannot 
find  that  Leo  Heilpern  had  any  such  implied  authority;  the  implied 
authority  in  this  case,  resting  upon  what  we  call  a  '  ratification '  by  the 
mill  company  of  the  acts  of  its  cashiers  and  bookkeepers;  and  you 
cannot  find  that  the  mill  company  ratified  any  act  of  which  it  had  no 
knowledge."  In  the  part  of  the  charge  excepted  to,  this  is,  in  sub- 
stance, reiterated,  the  court  in  each  instance  using  the  term  "  implied 
authority."  If  by  this  the  court  meant,  or  if  the  jury  must  have  un- 
derstood it  to  mean,  to  qualify  the  part  of  the  charge  first  herein 
quoted,  so  as  to  exclude  from  the  consideration  of  the  jury  any  appear- 
ance of  authority  which  plaintiff's  negligent  conduct  of  its  business 
may  have  permitted  its  bookkeepers  to  have,  it  was  error.  After  a 
perusal  of  the  entire  charge,  to  ascertain  in  what  sense  the  jury  must 
have  understood  the  court  to  use  the  term  "  implied  authority,"  the 
majorit}'  of  this  court  are  of  opinion  (in  which,  though  I  have  my 
doubts,  I  do  not  concur)  that  the  jury  must  have  understood  that,  in 
order  to  make  a  case  of  apparent  authority,  it  was  not  enough  that  the 
plaintiff's  negligent  conduct  of  its  business  permitted  its  bookkeepers 
and  cashier  to  appear  to  have  it,  unless  such  appearance  of  authority 
was  actually  known  to  it. 


CHAP.    IV.]      FORMATION   OF  THE   RELATION   BY   ESTOPPEL.  133 

This,  of  course,  renders  a  reversal  inevitable,  and  renders  unneces- 
sary the  consideration  arising  on  rulings  excluding  or  admitting 
evidence,  which  need  not  arise  on  another  trial. 

Order  reversed. 

Vanderburgh,  J.,  took  no  part  in  this  decision. 


MAGUIEE   v.    SELDEN. 

103  N.  Y.  642.     1886. 

Action  to  foreclose  a  mortgage.  Defence,  pa3anent.  There  was 
evidence  that  when  one  Lyon  owned  the  mortgaged  premises  his 
agent,  Mykoff,  was  informed  by  plaintiff  that  one  Evans  was  her 
agent  to  receive  payment ;  but  this  was  denied  by  plaintiff.  Defend- 
ant afterward  bought  the  premises  of  Lyon  and  made  payment  of  the 
mortgage  to  Evans.    Judgment  for  plaintiff. 

Danforth,  J.  ...  It  is  quite  immaterial  to  enquire  who  of 
these  witnesses  should  be  credited.  The  trial  judge  has  found  that 
Evans  was  not  in  fact  the  agent  of  the  plaintiff  for  the  purpose  of 
receiving  the  principal  of  the  mortgage;  that  he  did  not  have  the 
bond  and  mortgage,  and  that  the  defendant  was  not  misled  to  the 
contrary  by  anything  the  plaintiff  said  or  did.  But  however  the  plain- 
.tiff's  statements,  as  testified  to  by  the  defendant's  witnesses,  are 
interpreted,  they  cannot  help  his  case.  They  were  not  made  to  the 
defendant,  nor  were  they  made  to  be  communicated  to  him.  It  so 
happened  that  Mykoff  afterward  was  employed  by  the  defendant. 
That  was  an  accidental  circumstance  not  anticipated  by  the  plaintiff 
and  not  sufficient  to  give  the  character  of  an  estoppel  to  her  statements 
in  favor  of  the  defendant.  They  were  not  intended  to  influence  his 
conduct,  and,  however  understood,  could  not  be  extended  beyond  the 
party  to  the  transaction  in  relation  to  which  they  were  made.  (May- 
enborg  v.  Haynes,  50  N.  Y.  675.)  They  were  competent  as  evidence, 
but  could  have  no  greater  effect.  Some  exceptions  have  been  argued, 
but  they  seem  to  us  without  merit. 

All  concur.  Judgment  a^rmed. 

CLAEK   V.   DILLMAN. 

108  Mich.  625.     1896. 

Hooker,  X  The  plaintiffs  are  copartners  engaged  in  the  business 
of  selling  musical  instruments.  They  appeal  from  a  judgment 
against  them  in  an  action  of  replevin  brought  by  them  for  a  piano 
which  at  one  time  belonged  to  them,  but  which  the  defendant  claims 


134  CLARK   V.   DILLMAN.  [CHAP.    17. 

to  have  purchased  from  one  Pressburg,  claiming  that  Pressburg  was 
plaintiffs'  agent,  duly  authorized  to  sell  said  piano,  or  at  least  that  the 
plaintiff  held  him  out  as  such  agent. 

The  case  turned  upon  the  right  of  the  defendant  to  deal  with  Press- 
burg as  the  agent  of  the  plaintiffs;  and,  while  the  court  seems  to 
have  considered  the  only  question  in  the  case  to  be  whether  there  was 
a  holding  out,  the  charge  left  to  the  jury  the  question  of  Pressburg's 
actual  authority.  This  was  proper,  as  there  was  some  testimony 
tending  to  show  an  admission  of  such  authority  by  the  plaintiffs ;  but 
if  that  question  was  to  be  left  to  the  jury,  the  plaintiffs  should  have 
been  permitted  to  show  whether  Pressburg  actually  was  their  agent, 
authorized  to  make  sales  generally,  which  they  offered  to  do,  but  the 
testimony  was  excluded.  At  the  time  this  offer  was  made  the  court 
seems  to  have  taken  the  view  that  the  case  should  turn  upon  an  es- 
toppel growing  out  of  the  holding  out  as  agent,  and  therefore  excluded 
the  testimony  upon  the  subject  of  agency  as  immaterial.  This  was 
error,  unless  the  jury  were  to  be  instructed  that  Pressburg  was  not 
authorized  to  make  this  sale. 

The  charge  is  silent  upon  another  essential.  It  is  undoubtedly  the 
•law  that  a  person  may  be  bound  by  the  representation  and  acts  of 
another,  as  agent,  where  there  has  been  such  a  holding  out  as  to  rea- 
sonably lead  one  dealing  with  him  to  believe  in  the  existence  of  such 
agency.  But  all  of  the  elements  of  an  estoppel  must  be  present. 
There  must  be  conduct  calculated  to  mislead,  and  it  must  be  under 
circumstances  which  justify  the  claim  that  the  alleged  principal 
should  have  expected  that  the  representations  would  be  relied  and 
acted  upon;  and,  further,  it  must  appear  that  they  were  relied  and 
acted  upon,  in  good  faith,  to  the  injury  of  an  innocent  party. 
Mechem,  Ag.  §§  85,  86;  Eailroad  Co.  v.  Chappell,  56  Mich.  190, 
22  N.  W.  278.  The  rule  that  estops  a  party  from  denying  the  exist- 
ence of  an  agency  is  a  shield  and  not  a  sword;  and  unless  the  jury 
could  find  from  the  evidence  that  the  defendant  acted  in  good  faith, 
and  in  the  honest  belief  that  Pressburg  had  authority  to  sell  this 
piano  for  $455,  and  that  he  purchased  it  to  his  injur}-,  a  verdict  for 
the  defendant  should  not  have  been  rendered.  There  is  no  allusion  in 
the  charge  to  the  other  elements  essential  to  an  estoppel,  and,  in  the 
testimony  returned,  we  discover  no  avowal  of  belief  in,  or  hojia 
fide  reliance  upon,  the  authority  of  Pressburg,  unless  the  circum- 
stances were  sufficient  evidence  to  go  to  the  jury  upon  this  subject. 
In  any  event,  there  was  ample  opportunity  for  the  jury  to  find  the 
contrary.  Maxwell  v.  Bridge  Co.,  41  Mich.  454,  2  N.  W.  639 ;  Fer- 
guson V.  Millikin,  42  Mich.  443,  4  N.  W.  185 ;  Morrill  v.  Mackman, 
24  Mich.  279,  note;  De  Mill  v.  Moffat,  49  Mich.  125,  131,  13  N".  W. 
387;  Fletcher  v.  Circuit  Judge  of  Kalkaska,  81  Mich.  193,  45  N".  W. 
641;  Bank  v.  Todd,  47  Conn.  219.  We  do  not  discover  that  the 
plaintiffs'  counsel  asked  instruction  upon  this  subject,  and  he  could 


I 


CHAP.   IV.]      FORMATION  OF  THE   RELATION   BY  ESTOPPEL.  135 

not  complain  of  the  failure  to  mention  it,  but  for  the  fact  that  the 
charge,  as  given,  was  objectionable  by  reason  of  the  exclusion  of  these 
important  considerations. 

The  first  request  of  defendant  was  given,  and  included  the  state- 
ment that  "  if,  by  word  or  act,  they  were  led  by  the  plaintiffs  to  believe 
he  [Pressburg]  had  authority,  the  plaintiffs  cannot  repudiate  the 
contract  he  made,  and  your  verdict  must  be  for  the  defendant."  The 
fact  that,  by  word  or  act,  the  plaintiffs  led  the  defendant  and  his  wife 
to  believe  that  Pressburg  had  authority,  did  not  require  a  verdict  for 
defendant.  This  was  making  the  doctrine  of  estoppel  too  broad,  and, 
by  omitting  all  of  the  elements  but  the  representation,  the  jury  may 
have  been  led  to  understand  that  reliance  upon  the  representation, 
and  action  in  good  faith,  were  not  essential.  The  judgment  is  re- 
versed, and  a  new  trial  ordered. 

Long,  C.  J.,  and  Grant  and  Moore,  JJ.,  concurred  with 
Hooker,  J. 

Montgomery,  J.  I  concur  in  the  result,  but  I  think  the  first 
request  of  defendant  not  open  to  the  criticism  made  by  Mr.  Justice 
Hooker. 


JOHNSTON   V.   MILWAUKEE   &   WYOMING 
INVESTMENT    CO. 

46  Neb.  480.     1895. 

Replevin  for  250  head  of  cattle.  Plaintiff  company  owned  a  cattle 
ranch  in  Wyoming,  but  its  corporate  and  business  oflBce  was  in  Wiscon- 
sin. One  Adams  was  employed  as  manager  of  the  ranch  with 
authority  to  purchase  supplies,  hire  men,  and  send  in  accounts  for 
the  same  to  the  treasurer  in  Milwaukee,  who  would  remit  payment 
for  the  same;  to  gather  cattle  and  ship  the  same  to  a  commission 
house  in  Chicago ;  but  with  no  authority  to  ship  elsewhere  or  to  sell 
cattle.  Prior  to  the  transaction  in  question  he  had  never  sold  cattle 
or  anything  else  from  the  ranch  except  some  old  fence  wire  and  a 
part  of  a  slaughtered  animal;  but  neither  plaintiff  nor  defendants 
knew  of  these  sales.  Adams,  through  a  cattle  salesman  in  Omaha, 
sold  to  defendants  (Johnston,  et  al.)  250  head  of  cattle  from  the 
ranch  at  $22  a  head,  defendants  then  being  in  Wyoming.  At  de- 
fendants' request  Adams  shipped  the  cattle  to  Central  City,  Nebraska, 
and  received  therefor  checks  payable  to  his  order ;  these  he  cashed  and 
embezzled  the  proceeds.  Neither  defendants  nor  their  Omaha  agent 
had  ever  before  dealt  with  either  plaintiff  or  Adams.  This  action  is 
to  replevin  the  cattle  from  defendants.* 

'  The  statement  of  facts  is  abridged  from  the  report  of  a  former  appeal  In  this 
case  (.35  Neb.  554).  It  was  decided  upon  that  appeal  that  Adams  had  no  actual 
authority  and  no  authority  derived  from  local  custom  or  usage.  —  Ed. 


136         JOHNSTON   V.   MILWAUKEE  i,   WYOMING  INV.   CO.      [CHAP.   IV. 

Judgment  was  given  in  favor  of  plaintiff.    Defendants  appeal. 

Irvine,  C.  This  was  an  action  of  replevin  for  250  head  of  cattle 
by  the  defendant  in  error  [Plaintiff]  against  the  plaintiffs  in  error 
[Defendants],  On  the  first  trial  there  was  a  verdict  and  judgment 
in  favor  of  the  defendants  in  the  district  court.  This  judgment  was 
reversed  by  this  court.  (Milwaukee  &  Wyoming  Investment  Co.  v, 
Johnston,  35  Neb.,  554.)  The  case  has  been  retried,  resulting  in  a 
verdict  and  judgment  for  the  plaintiff,  and  the  defendants  now  prose- 
cute error.  The  evidence  is  substantially  the  same  as  on  the  first  trial, 
and  the  facts  having  been  stated  somewhat  in  detail  in  the  former 
opinion,  we  refer  to  that  and  will  not  restate  them,  except  that,  in 
view  of  one  argument  now  made,  it  should  perhaps  be  stated  that  the 
business  of  the  corporation,  as  set  forth  in  its  charter,  is  "buying, 
selling,  raising,  shipping,  exchanging,  and  dealing  in  all  kinds  of 
cattle,  horses,  and  other  live  stock,  in  the  Territory  of  Wyoming," 
etc.,  and  that  the  duties  of  the  manager,  as  provided  by  the  by-laws, 
and  as  briefly  referred  to  in  the  former  opinion,  are  prescribed  as 
follows :  "  The  manager  and  assistant  manager  shall  reside  and  keep 
their  office  in  the  Territory  of  Wyoming  and  shall  have  the  charge 
and  management,  subject  to  the  orders  of  the  directors,  of  all  the 
affairs  and  property  of  the  company  in  said  territory." 

On  the  former  hearing  the  case  was  decided  solely  on  the  effect  of 
the  evidence  as  to  a  custom  in  Wyoming  whereby  the  manager  of  a 
cattle  ranch,  it  was  claimed,  had  power  to  sell  cattle  therefrom,  and 
the  court  in  the  former  opinion  laid  down  certain  rules  for  the  de- 
termination of  that  question  alone ;  that  is,  as  to  what  was  necessary 
in  order  to  establish  a  custom  vesting  in  the  manager  authority  to 
60  dispose  of  cattle.  As  now  presented,  an  entirely  different  question 
arises.  On  the  trial  in  the  district  court  a  special  verdict  was  taken 
whereby,  under  instructions  conformable  to  the  former  opinion,  the 
jury  found  that  no  such  custom  prevailed.  The  jury  also  found  that 
prior  to  the  sale  of  the  cattle  in  question  Adams  had  not,  with  the 
plaintiff's  knowledge,  performed  any  similar  acts,  and  under  a  per- 
emptory instruction  there  was  a  finding  that  Adams  possessed  no 
actual  authority  to  make  the  sale.  There  were  other  findings  not 
material  to  the  questions  which  we  shall  consider.  The  former 
opinion  strongly  implied  a  holding  that  no  actual  authority  existed 
for  the  sale  made  by  Adams,  and  we  shall  not  here  reconsider  that 
question. 

The  judgment  in  favor  of  the  plaintiff  was  evidently  entered  on  the 
theory,  that  in  the  absence  of  such  actual  authority,  or  apparent, 
conferred  either  by  a  custom  of  business  or  by  the  exercise  of  prior 
similar  acts,  the  plaintiff  could  not  be  bound  by  Adams'  acts.  One 
instruction  given  by  the  court  clearly  shows  that  the  judgment  pro- 
ceeded on  this  theory.    This  instruction  was  as  follows : 


CHAP.   IV.]      FORMATION   OF   THE   RELATION   BY   ESTOPPEL.  137 

"  An  act  is  within  the  apparent  authority  of  the  agent  when  it  is  of  like 
character  as  that  of  prior  acts  performed  by  him  for  the  same  principal,  and 
which  such  principal,  knowing  the  same,  sanctioned  or  ratified.  The  act  of 
an  agent  within  his  apparent  but  not  within  his  real  authority  will  bind  his 
principal  only  in  case  the  person  dealing  with  such  agent  knew  of  such  prior 
acts  and  dealt  with  the  agent  in  reliance  thereon;  and  in  this  case  you  are 
instructed  that  unless  you  find  from  a  preponderance  of  the  evidence  that 
Thomas  R.  Adams  had  prior  to  the  sale  of  these  cattle  performed  acts  of  a 
similar  character,  and  that  the  plaintiff,  after  knowledge  or  notice  thereof, 
sanctioned  or  ratified  such  prior. or  similar  acts,  then  you  will  not  be  justi- 
fied in  finding  that  Adams  possessed  the  apparent  authority  to  sell  the  cattle 
in  question.  The  defendants  cannot  base  any  rights  in  this  action  upon  the 
ground  that  they  dealt  with  Thomas  R.  Adams  as  having  the  apparent 
authority  to  sell  the  cattle  unless  it  appears  from  the  evidence  that  they,  or 
one  of  them,  knew  of  facts  giving  such  apparent  authority  to  Adams,  and 
acted  upon  such  appearances  in  the  transaction  of  purchasing  the  cattle  in 
question. 

"  The  mere  fact  that  the  plaintiff  had  entrusted  the  care,  management,  and 
possession  of  these  cattle  to  Thomas  R.  Adams,  gave  him  no  authority  to  sell 
them.  Although  authority  on  the  part  of  an  agent  may  in  proper  cases  be 
implied  from  the  words  and  conduct  of  the  parties,  or  from  the  circum- 
stances of  the  case,  yet  the  extent  of  the  authority  so  implied  cannot  exceed 
the  necessary  and  legitimate  eflfect  of  the  facts  from  which  it  is  inferred,  but 
must  be  limited  to  the  performance  of  like  acts  under  like  circumstances. 
The  authority,  if  implied  at  all,  can  only  be  implied  from  facts." 

In  the  light  of  all  the  instructions  it  was  clearly  the  view  of  the 
court  that,  it  having  disposed  of  the  question  of  actual  authority,  and 
the  jury  having  found  that  no  such  general  custom  existed  as  would, 
under  the  former  opinion  of  the  court,  confer  authority  upon  the 
agent,  no  apparent  authority  could  exist  unless  by  the  exercise  by  the 
agent  of  such  authority  in  the  past,  supplemented  by  knowledge  of 
those  acts  on  the  part  of  the  company,  and  by  similar  knowledge  on 
the  part  of  defendants,  relied  on  by  them  in  making  the  purchase.  It 
is  familiar  law  that  a  principal  is  bound  by  the  acts  of  his  agent,  not 
only  when  performed  within  the  scope  of  his  actual  or  implied  author- 
ity, but  when  within  the  scope  of  apparent  authority  conferred  upon 
him  by  the  principal.  There  have  been  many  cases  distinguishing  in 
this  respect  between  a  general  agent  and  a  special  agent ;  and  perhaps 
this  distinction  is  not  without  value,  although  in  most  cases  it  simply 
throws  back  one  step  the  process  of  investigation.  Indeed,  with  re- 
gard to  acts  of  corporations  it  has  often  been  said  that  the  only  gen- 
eral agents  are  its  directors  acting  in  their  corporate  capacity.  Strict 
application  of  the  distinction  would,  therefore,  constitute  all  acts  of 
corporations  not  performed  under  a  resolution  of  the  board  of  di- 
rectors the  acts  of  special  agents,  and  would  require  all  persons  deal- 
ing with  corporations,  except  in  pursuance  of  such  resolutions,  to 
proceed  at  theii*  peril.  This  at  one  stage  of  the  law  might  have  been 
a  proper  doctrine,  but  the  courts  must  take  notice  of  the  fact  that  the 
province  of  corporations  is  now  vastly  enlarged;  that  corporations 
now  exist,  not  only  for  the  transaction  of  public  or  ecclesiastical 


138         JOHNSTON   V.   MILWAUKEE   A   WYOMING   INV.    CO.      [CHAP.    IV. 

affairs,  but  for  the  purpose  of  carrying  on  ordinary  business  transac- 
tions. We  have  now  private  corporations,  not  only  operating  rail- 
roads and  other  institutions  having  quasi-public  functions,  but  also 
corporations  conducting  banks,  manufacturing  establishments,  live 
stock  raising,  as  in  the  present  instance,  and  even  retail  shops.  The 
domain  of  individual  enterprise  has,  in  other  words,  been  invaded  by 
corporations,  and  in  the  conduct  of  such  enterprises  we  can  see  no 
reason  and  no  principle  of  law  requiring  the  application  of  rules  to 
such  corporations  different  from  those  applying  to  individuals  under 
similar  circumstances,  except  where  the  acts  relate  to  the  operations 
of  the  corporation  in  its  capacity  as  such.  What  we  mean  to  express 
by  this  is  that  in  transactions  having  no  relation  to  the  corporation  in 
its  corporate  capacity,  but  solely  in  regard  to  the  conduct  of  its  busi- 
ness affairs,  the  general  principles  applicable  to  individuals  should 
apply. 

[The  court  then  holds  that  a  by-law  of  a  business  corporation  does 
not  enlarge  an  agent's  actual  authority  as  to  a  third  person  who  deals 
with  an  agent  in  ignorance  of  the  by-law.] 

The  sale  of  these  cattle  was  clearly  within  the  power  of  the  cor- 
poration, the  only  question  was  the  apparent  authority  of  this  par- 
ticular agent  of  the  corporation  to  make  the  sale,  and  we  may  thus 
divest  ourselves  in  the  present  inquiry  of  all  investigation  as  to  cor- 
porate functions,  and  consider  whether  or  not  there  was  error  in  the 
judgment  independent  of  the  fact  that  the  plaintiff  is  a  corporation. 
A  review  of  the  authorities  bearing  on  the  question  would  be  almost 
endless,  and  their  confusion  is  such  that  it  would  hardly  be  profitable. 
We  conceive  that  the  rule  whereby  a  principal  is  bound  by  the  acts  of 
his  agent  beyond  his  actual  authority,  but  within  its  apparent  scope, 
is  founded  in  the  first  place  on  the  maxim  that  where  one  of  two  in- 
nocent persons  must  suffer,  it  should  be  that  one  who  misled  the  other 
into  the  contract  (Story,  Agency,  §  443),  and  this  doctrine  is  founded 
on  a  broad  principle  of  equitable  estoppel  or  estoppel  in  pais.  We  con- 
ceive that  a  proper  statement  of  it,  with  reference  to  such  a  case  as  we 
have  before  us,  is  as  follows :  That  where  a  principal  has  by  his  volun- 
tary act  placed  an  agent  in  such  a  situation  that  a  person  of  ordinar}-- 
prudence,  conversant  with  business  usages  and  the  nature  of  the  par- 
ticular business,  is  justified  in  presuming  that  such  agent  has  author- 
ity to  perform  on  behalf  of  his  principal  a  particular  act,  such  par- 
ticular act  having  been  performed,  the  principal  is  estopped,  as 
against  such  innocent  third  person,  from  denying  the  agenf  s  authority 
to  perform  it.  We  do  not  think  that  in  order  to  bring  a  case  within 
this  principle  it  is  in  all  cases  necessary  to  show  that  by  general  cus- 
tom, as  defined  in  the  former  opinion  of  the  court,  such  agents  have 
such  authority ;  nor  do  we  think  that  it  is  necessary  in  all  cases  to 
show  that  the  same  agent  had  previously  performed  similar  acts; 
that  such  acts  were  known  to  the  principal;   that  the  third  person 


CHAP.   IV.]      FORMATION   OF   THE   RELATION   BY   ESTOPPEL.  139 

also  knew  of  them,  and  relied  on  them  in  the  transaction;  or  even 
that  similar  agents  had  in  the  past  performed  such  acts.  A  number 
of  elements  may  influence  the  solution  of  the  question.  In  this  case 
the  corporation  was  located  in  Milwaukee,  in  the  state  of  Wisconsin. 
It  was  formed  for  the  purpose  of  doing  business  in  Wyoming,  and 
most  of  its  business  was  there  conducted.  The  very  fact  that  the 
corporation  and  its  general  officers  held  their  office  at  a  remote  point 
was  an  element  for  consideration.  Rathbun  v.  Snow,  123  N.  Y.  343. 
One  might  be  justified  in  dealing  with  a  person  in  apparent  manage- 
ment of  the  business  in  Wyoming,  where  the  office  of  the  corporation 
was  in  a  distant  state,  where  he  would  not  be  so  justified  if  he 
found  the  general  offices  and  general  officers  of  the  corporation  at  or 
near  the  place  where  the  business  was  conducted.  Furthermore,  the 
general  nature  of  the  business  and  its  requirements  was  an  element 
for  consideration.  Montgomery  Furniture  Co.  v.  Hardaway,  104 
Ala.  100.  It  might  well  be  that  one  would  be  justified  in  buying 
ripe  fruit  from  one  found  in  charge  of  orchards  where  he  might 
not  be  justified  in  dealing  with  such  a  person  in  goods  not  perish- 
able in  their  nature.  Business  usage  might  have  its  infiuence, 
although  not  so  general  and  uniform  as  by  implying  notice  to  the 
principal  to  also  imply  that  such  custom  was  in  view  when  the  agent 
wa^  appointed.  We  mention  these  instances  merely  by  way  of  illus- 
tration, and  we  hold  that  the  apparent  authority  of  the  agent,  beyond 
his  actual  authority,  does  not  depend  solely  upon  custom  or  solely 
on  the  performance  of  previous  similar  acts,  whether  known  or  un- 
known to  a  person  dealing  with  him,  but  that,  subject  to  the  general 
rule  we  have  above  stated,  and  to  general  legal  principles,  the  ques- 
tion is  one  of  fact  to  be  determined  by  the  jury  under  all  the  circum- 
stances of  the  transaction  and  the  business,  as  disclosed  by  the  evidence. 
It  follows  that  the  special  findings  referred  to  were  insufficient 
whereon  to  found  the  judgment,  and  that  the  instruction  quoted  was 
erroneous. 

Reversed  and  remanded. 


CEANE   V.   GRUENEWALD. 

120  N.  Y.  274.     1890. 

Action  to  foreclose  a  mortgage.  Defence,  pa3anent.  Plaintiff 
through  an  agent,  Baker,  loaned  defendant  $8,000  and  took  a  bond 
and  mortgage  as  security.  These  were  left  in  the  custody  of  Baker 
who  had  authority  to  receive  the  interest,  but  no  authority  to  collect 
the  principal.  After  the  principal  was  due  defendant  paid  Baker 
$1,000  at  one  time  and  a  second  $1,000  at  a  later  time,  in  each  case 
seeing  the  bond  and  mortgage  in  Baker's  possession.    Still  later  de- 


♦140  CBANE   V.   GEUENEWALD.  [CHAP.   IV. 

fendant  paid  Baker  a  third  $1,000  without  seeing  the  bond  and 
mortgage,  but  being  truly  informed  by  Baker  that  he  still  held  them. 
Baker  then  sold  and  delivered  the  bond  and  mortgage  to  one  Mount 
upon  a  forged  assignment.  Defendant  afterward  paid  Baker  at 
various  times  the  remaining  $5,000  being  falsely  informed  by  Baker 
that  he  still  held  the  bond  and  mortgage.  Plaintiff  having  obtained 
the  bond  and  mortgage  brings  this  action  for  foreclosure.  The  trial 
court  held  that  defendant  was  entitled  to  credit  for  the  first  two 
payments  of  $1,000  each,  and  rendered  judgment  of  foreclosure  and 
sale  for  the  remaining  $6,000.     Defendant  appeals. 

Parker,  J.  A  mortgagor  who  makes  a  payment  to  one,  other  than 
the  mortgagee,  does  so  at  his  peril.  If  the  payment  be  denied,  upon 
him  rests  the  burden  of  proving  that  it  was  paid  to  one  clothed  with 
authority  to  receive  it.  There  is,  however,  one  exception  to  this  gen- 
eral rule.  If  payment  be  made  to  one  having  apparent  authority  to 
receive  the  money,  it  will  be  treated  as  if  actual  authority  had  been 
given  for  its  receipt.  Paley  on  Agency  (3d  ed.),  275;  Story  on 
Agency,  §  98;  Williams  v.  Walker,  2  Sandf.  Ch.  325;  Smith  v.  Kidd, 
68  N.  Y.  130;   Brewster  v.  Games,  103  Id.  556-564. 

So,  if  a  mortgagee  permits  an  attorney,  who  negotiates  a  loan,  to 
retain  in  his  possession  the  bond  and  mortgage  after  the  principal 
is  due,  and  the  mortgagor,  with  knowledge  of  that  fact,  and  relying 
upon  the  apparent  authority  thus  afforded,  shall  make  a  pajrment  to 
him,  the  owner  will  not  be  permitted  to  deny  that  the  attorney  pos- 
sessed the  authority  which  the  presence  of  the  securities  indicated 
that  he  had.  This  rule  comprises  two  elements :  First,  possession  of 
the  securities  by  the  attorney  with  the  consent  of  the  mortgagee; 
and  second,  knowledge  of  such  possession  on  the  part  of  the  mort- 
gagor. The  mere  possession  of  the  securities  by  the  attorney  is  not 
sufficient.  The  mortgagor  must  have  knowledge  of  the  fact.  It 
would  not  avail  him  to  prove  that  subsequent  to  a  payment  he  dis- 
covered that  the  securities  were  in  the  actual  custody  of  the  attorney 
when  it  was  made.  For  he  could  not  have  been  misled  or  deceived 
by  a  fact,  the  existence  of  which  was  unknown  to  him.  It  is  the  in- 
formation which  he  acquires  of  the  possession  which  apprises  him 
that  the  attorney  has  apparent  authority  to  act  for  the  principal.  It 
is  the  appearance  of  authority  to  collect,  furnished  by  the  custody  of 
the  securities,  which  justifies  him  in  making  the  pa\Tnent.  And  it 
is  because  the  mortgagor  acts  in  reliance  upon  such  appearance,  an 
appearance  made  possible  only  by  the  act  of  the  mortgagee  in  leaving 
the  securities  in  the  hands  of  an  attorney  that  estops  the  owner  from 
denying  the  existence  of  authority  in  the  attorney  which  such  pos- 
session indicates. 

Now,  applying  that  rule  to  the  facts  found  by  the  learned  trial 
court  in  this  case,  the  attorney  Baker  negotiated  the  loan  of  $8,000, 
which  was  made  to  this  defendant  on  his  bond  secured  by  a  mortgage 


CHAP.   IV.]       FORMATION   OF   THE   RELATION   BY   ESTOPPEL.  141 

on  real  estate.  The  mortgagor  and  mortgagee  never  saw  each  other. 
The  securities  were  permitted  to  remain  in  the  possession  of  the 
attorney.  He  had  authority  to  collect  the  interest,  but  was  not 
authorized  to  collect  the  principal  or  any  part  of  it.  After  the 
principal  became  due  he  received  from  the  mortgagor  two  payments 
of  $1,000  each,  on  each  occasion  exhibiting  the  bond  and  mortgage  to 
the  mortgagor.  Clearly  as  to  these  two  items  the  attorney  had  ap- 
parent authority  to  receive  the  principal  and  the  mortgagor  could  not 
deny  to  them  the  effect  of  payment  pro  tanto  by  proof  that  he  did  not 
have  actual  authority.  Subsequently,  and  while  the  bond  and  mort- 
gage still  remained  in  the  possession  of  the  attorney,  this  defendant 
paid  to  him  a  further  sum  of  $1,000,  to  be  applied  as  a  pa}'ment  on 
account  of  the  principal  due.  True,  he  did  not  at  this  time  see  the 
bond  and  mortgage,  but  it  was  actually  in  the  possession  of  the 
attorney  and  the  attorney  so  informed  him.  Here  then  was  posses- 
sion and  information  of  possession.  It  was  information  upon  which 
he  acted,  and  inasmuch  as  it  was  true,  it  constituted  apparent  author- 
ity. If  it  had  turned  out  to  be  untrue  it  could  not  have  availed  the 
defendant.  We  see  no  ground  for  insisting  that  a  party  must  actually 
see  and  examine  the  securities  in  order  to  entitle  him  to  the  protection 
of  the  doctrine  of  apparent  authority,  if  he  have  trustworthy  informa- 
tion of  the  fact  which  he  believes  and  relies  upon,  and  it  shall  prove 
to  be  true,  there  seems  to  be  no  reason  why  it  should  not  avail  him  as 
well  as  a  personal  examination  of  the  securities.  It  follows,  that 
the  defendant  should  have  been  credited  with  the  third  payment  of 
$1,000. 

The  remaining  $5,000  was  paid  to  Baker  after  he  had  parted  with 
the  possession  of  the  bond  and  mortgage,  and  the  question  presented 
is,  whether  the  defendant  is  entitled  to  be  credited  with  the  payments 
made  by  him  while  the  attorney  Baker  did  not  have  actual  possession 
of  the  securities.  It  will  be  observed  that  Baker  was  not  deprived  of 
the  possession  by  any  act  of  Mrs.  Crane.  She  believed  that  they  were 
still  in  the  custody  of  Baker.  So  far  as  she  is  concerned,  therefore,  or 
the  plaintiff  in  this  action  who  occupies  no  better  or  other  attitude, 
she  is  not  in  position  to  deny  such  responsibility  as  her  conduct  im- 
poses. She  cannot  say  that  by  any  act  of  hers  she  is  relieved  from 
the  operation  of  the  estoppel  which  prevents  her  from  denying  that 
the  first  three  payments  of  $1,000  each  were  effectual  as  such.  If 
then  the  defendant  is  not  entitled  to  be  credited  with  the  payments 
aggregating  $5,000,  it  is  because  he  is  not  in  a  situation  to  insist 
upon  the  estoppel.  We  are  of  the  opinion  that  a  proper  application 
of  this  doctrine  of  apparent  authority,  requires  us  to  hold  that  the 
defendant's  failure  to  take  the  precaution  of  ascertaining  whether 
the  attorney  was  actually  in  the  possession  of  the  securities  when  he 
paid  the  several  sums  aggregating  $5,000,  deprives  him  of  the  right 
to  assert  that  he  was  induced  to  make  the  payments  because  it  appeared 


142  CRANE   V.   GRUENEWALD.  [CHAP.   IV. 

to  him  that  the  attorney  had  the  right  to  receive  the  money.  For, 
as  we  have  already  observed,  it  cannot  appear  to  the  mortgagor  that 
an  attorney  has  authority  to  receive  the  principal,  save  where  he  has 
present  possession  of  the  securities. 

Information  of  the  physical  facts  of  possession  by  the  attorney  is 
alone  effectual  for  protection.  And  he  must  have  such  knowledge 
when  every  payment  is  made,  for  no  presumption  of  a  continuance  of 
possession  can  be  indulged  in  for  the  purpose  of  giving  support  to 
an  apparent  authority  on  the  part  of  an  attorney  to  act,  where  no 
actual  authority  exists.  This  knowledge  he  did  not  have  for  it  was 
not  the  fact.  By  his  own  wrongful  act,  the  attorney  had  parted  with 
possession,  and  as  a  necessary  consequence  has  deprived  himself  of 
the  power  to  longer  misrepresent  his  authority  in  respect  thereto  to 
the  detriment  of  the  mortgagee.  The  mortgagor  thereafter  placed 
his  trust  solely  in  the  assertions  of  the  attorney  and  was  deceived. 
In  so  doing  he  was  legally  as  much  at  fault  as  the  mortgagee,  who  also 
relied  xipon  the  attorney's  trustworthiness.  Therefore,  he  cannot  in- 
voke in  support  of  his  contention  the  doctrine  of  apparent  authority. 
A  rule  which  undoubtedly  had  its  foundation  in  the  equitable  prin- 
ciple, that  if  one  of  two  innocent  persons  must  suffer,  he  ought  to 
suffer  in  preference  whose  conduct  has  misled  the  confidence  of  the 
other  into  an  unwary  act. 

The  judgment  should  be  reversed  and  a  new  trial  granted  with 
costs  to  the  appellant;  unless  within  thirty  days  the  plaintiff  stipu- 
lates to  modify  the  judgment  by  deducting  therefrom  $104.50,  that 
being  the  amount  of  the  costs  of  General  Term,  and  the  further  sum 
of  $1,000,  with  interest  thereon  from  July  1,  1882,  to  the  date  of 
entry  of  the  judgment  together  with  any  other  sum  paid  by  Gruene- 
wald  to  Baker  whether  for  principal  or  interest  prior  to  July  20, 1883, 
for  which  he  was  not  credited  by  the  trial  court ;  in  which  event  the 
judgment  as  modified  is  affirmed  with  costs  of  this  court  to  the 
appellant.^ 

'  In  Central  Trust  Co.  v.  Folsom.  167  N.  Y.  285  (1901),  the  Court  of  Appeals 
applied  the  rule  laid  down  In  Crane  v.  Gruenewald  to  an  Investment  by  an  agent  in 
an  outstanding  bond  and  mortgage,  and  held  that  the  rule  was  not  confined  to  an 
investment  in  an  original  loan.  Cullen,  J.,  said,  in  part  (pp.  288,  289)  :  "The  gen- 
eral rule  stated  by  all  the  text-writers  is  that  where  an  agent  who  negotiates  a  loan 
for  his  principal  is  allowed  to  retain  possession  and  control  of  the  security  taken  on 
the  loan,  he  has  apparent  authority  after  maturity  to  receive  payments  for  his  prin- 
cipal. Story  on  Agency,  §  98  ;  Mechem  on  Agency,  §  273  ;  Paley  on  Agency,  §  274. 
This  nile  has  been  repeatedly  upheld  by  the  decisions  in  this  State.  Williams  v. 
Walker,  2  Sandf.  Ch.  325  :  Hatfield  v.  Reynolds,  34  Barb.  612  ;  Wardrop  v.  Dunlop,  1 
Hun.  325  ;  Merrltt  v.  Cole,  9  Hun,  98  :  Smith  v.  Kldd.  68  N.  Y.  130 ;  Crane  v.  Gruene- 
wald, 120  N.  Y.  274.  .  .  .  The  learned  Appellate  Division  did  not  question  the  gen- 
eral rule,  but  held  that  the  present  case  did  not  fall  within  It  because  Weeks  did  not 
make  the  original  loan  on  which  the  bond  and  mortgage  were  given.  The  only  au- 
thority in  this  State  in  exact  point  Is  the  case  of  Williams  v.  Walker,  supra.  In 
that  case,  as  in  the  present,  the  attorney  had  not  made  the  original  loan,  but  had 
negotiated  the  purchase  of  an  outstanding  bond  and  mortgage.  It  was  held  that 
the  rule  applied,  and  that  payments  made  to  the  attorney,  so  long  as  he  held  pos- 
session of  the  securities,  were  good  payments  to  his  principal.  The  case  has  been 
often  cited  with  approval  in  the  opinions  of  this  court,  and  I  cannot  find  that  its 
authority  has  ever  been  questioned  until  in  this  case.     But  apart  from  authority  we 


CHAP.    IV.]       FORMATION   OF   THE   RELATION    BY    ESTOPPEL.  143 

Potter,  J.,  dissented  as  to  the  foreclosure  for  the  remaining 
$5,000,  holding  that  the  mortgage  had  been  fully  paid. 
All  concur  with  Parker,  J.,  except  Potter,  J.,  dissenting. 

Judgment  accordingly. 


QUINN   V.  DRESBACH. 

75  Cal.  159.     1888. 

Appeal  from  a  judgment  of  the  Superior  Court  of  Yolo  County, 
and  from  an  order  refusing  a  new  trial. 

Hayne,  C.  Action  to  enjoin  a  sale  by  defendants  under  a  deed 
of  trust  given  to  secure  the  payment  of  a  promissory  note.  The  plain- 
tiff paid  the  amount  of  the  note  to  one  Treadwell,  who  appropriated 
the  money  to  his  own  use,  and  the  question  is,  whether  Treadwell  was 
the  agent  of  the  payee. 

Treadwell  was  not  the  actual  agent  of  the  payee  in  the  matter. 
It  is  true  that  the  plaintiff  testifies  that  he  was  instructed  by  the 
payee  to  pay  to  Treadwell.  But  the  payee  denies  this,  and  in  view 
of  the  rule  in  cases  of  a  substantial  conflict  in  the  evidence,  it  must 
be  assumed  that  there  was  no  actual  agency.  Then  was  there  an 
ostensible  agency? 

The  facts  as  shown  by  uncontradicted  evidence  are  as  follows: 
The  land  which  is  the  subject  of  the  deed  of  trust  was  sold  by  the 
defendant  Haneke  to  the  plaintiff.  The  plaintiff  gave  his  promissory 
note  for  eight  hundred  dollars,  and  assumed  the  payment  of  an  out- 
standing indebtedness  secured  upon  the  property.  Neither  of  these 
obligations  having  been  met,  the  defendant  Haneke  placed  the  matter 
in  the  hands  of  Treadwell,  who  was  an  attorney-at-law  residing  in 
Yolo  County,  where  the  property  is  situated  and  where  the  plaintiff 
resided.  The  result  of  Treadwell's  operations  was  the  advance  by 
Haneke  of  money  to  pay  off  the  outstanding  indebtedness,  and  the 
taking  of  a  new  note  from  plaintiff  covering  the  amount  of  the  former 
note  and  the  amount  advanced  by  Haneke.    So  far,  there  is  no  kind 

think  that  the  fact  that  there  was  an  Investment  In  an  existing  security.  Instead  of 
in  an  original  loan,  does  not  necessarily  distinguish  the  cases  In  principle.  The 
reason  why  a  payment  to  an  agent  who  has  made  the  loan  and  who  continues  to  hold 
the  security  Is  good  payment  to  the  principal,  and  why,  under  such  circumstances, 
the  agent  lias  apparent  authority  to  collect  the  debt  is  not  very  clearly  stated  in 
either  the  text-bo-^ks  or  the  earlier  decided  cases.  It  was  first  established  in  Eng- 
land, and  doubtless  there  grew  out  of  the  general  course  of  business  as  to  loans 
made  through  attorneys  or  scriveners.  The  fact  that  the  attorney  or  agent  has  made 
the  loan  does  not  give  him  the  authority  to  collect  the  debt,  nor.  It  seems,  does  the 
mere  possession  of  the  security  by  the  attorney  give  such  authority.  Doubleday  v. 
Kress,  50  N.  Y.  410.  Both  conditions  must  concur,  that  the  agent  acted  for  the 
principal  at  the  inception  of  the  business  and  that  he  holds  the  securities.  It  Is  said 
in  the  case  last  cited  :  '  The  reason  of  the  rule  that  one  who  has  made  the  loan  as 
agent  and  taken  the  security  is  authorized  to  receive  paymeftt  when  he  retains  pos- 
session of  the  security  is  founded  upon  human  experience  that  the  payer  knows  that 
the  agent  has  been  trusted  by  the  payee  about  the  same  business,  and  he  is  thua 
given  a  credit  with  the  payer.'  " 


144  QUINN   V.   DKESBACH.  [CHAP.   IV. 

of  doubt  but  that  Treadwell  was  the  agent  of  Haneke  for  the  collec- 
tion of  the  principal  and  interest  of  the  first  note.  This  agency, 
however,  terminated  with  the  giving  of  the  second  note.  This  note 
was  by  its  terms  payable  at  the  Bank  of  California  in  San  Francisco ; 
and  the  note  was  given  to  the  bank  for  collection.  The  plaintiff 
seems  to  have  known  of  this  fact.  He  fell  into  the  habit,  however, 
of  paying  his  interest  to  Treadwell,  who  assumed  still  to  be  the  agent 
of  Haneke.  At  least  six  payments  of  interest  were  made  in  this  way. 
Treadwell  sent  the  money  to  the  bank,  and  the  receipts  therefor  were 
forwarded  to  him,  and  by  him  delivered  to  the  plaintiff.  On  some 
occasions,  however,  the  plaintiff  sent  the  interest  to  the  bank  through 
one  K.  W.  Pendergast,  who  had  no  connection  with  Treadwell.  Not 
only  was  interest  paid  to  Treadwell,  as  above  stated,  but  on  one  oc- 
casion a  part  payment  of  the  principal  was  made  to  him.  This  pay- 
ment was  sent  by  Treadwell  to  the  bank  with  the  following  letter : 

Woodland,  December  24,  1881. 
Thomas  Bbown,  Esq.,  Cashier  Bank  of  California : 

Herewith  I  send  you  check  for  $437.50  on  the  part  of  Isaac  Quinn,  being 
$400  principal  and  $37.50  interest  on  note  favor  of  Carl  Haneke.  I  also  send 
receipt  of  tax  of  Carl  Haneke  on  mortgage  given  to  secure  said  note,  amount- 
ing to  $36,  which  was  paid  by  Mr.  Quinn.  This  makes  up  the  amount  of 
$73.50  interest  due  December  27th.    Please  acknowledge  receipt. 

Yours,  W.  B.  Tbeadweli.. 

This  payment  of  the  principal  was  properly  credited  on  the  note. 

There  can  be  no  doubt  that  the  plaintiff  believed  in  good  faith  that 
Treadwell  remained  the  agent  of  Haneke  for  the  collection  of  the 
principal  and  interest  after  the  giving  of  the  second  note.  And  this 
belief  was  justified  by  the  conduct  of  Haneke.  Plaintiff  had  made 
one  payment  of  principal  to  Treadwell,  and  this  payment  had  not 
been  repudiated  by  Haneke,  but  was  credited  upon  the  note.  Osten- 
sible authority  may  be  conferred  by  the  recognition  of  a  single  act 
of  the  agent  if  sufficiently  unequivocal.  Wilcox  v.  C.  M.  &  St.  P.  K. 
Co.,  24  Minn.  270. 

It  was  negligence  in  Haneke  to  have  allowed  the  plaintiff  to  act 
imder  the  belief  that  Treadwell  was  authorized  to  receive  the  money. 
Haneke  was  chargeable  with  knowledge  that  Treadwell  continued  to 
act  in  some  way  in  the  matter.  He  was  chargeable  with  this  knowl- 
edge, because  the  bank  knew  it,  and  the  bank  was  his  agent  for  the 
collection  of  the  debt.  See  Bierce  v.  Eed  Bluff  Hotel  Co.,  31  Cal.  166. 
Now,  if  Haneke  knew  that  Treadwell  was  continuing  to  act  in  the 
matter  at  all,  the  only  inference  which  he  was  entitled  to  draw,  and 
the  one  which  he  ought  to  have  drawn,  was  that  he  was  continuing  to 
act  as  he  had  commenced,  viz.,  as  his  (Haneke's)  agent.  It  was  not 
a  natural  inference  that  Treadwell  had  changed  his  position  in  the 
matter,  and  was  acting  for  the  other  side.  The  presumption  was  that 
he  was  assuming  to  act  for  Haneke,  and  we  think  that  this  was  what 


CHAP.   IV.]        FORMATION  OF  THE  REI,ATION  BY  ESTOPPEL.  145 

nine  out  of  ten  business  men  would  have  thought.  This  being  Uie 
ease,  Haneke  ought  to  have  repudiated  the  assumed  agency,  and  not 
have  suffered  the  matter  to  stand  as  it  did. 

The  Civil  Code  provides  that :  "  Ostensible  authority  is  such  as  a 
principal  intentionally  or  hy  want  of  ordinary  care  causes  or  allows 
a  third  person  to  believe  the  agent  to  possess."    Civ.  Code,  sec.  2319. 

And  this  is  the  embodiment  of  a  well-established  principle  of  the 
common  law,  which  has  been  called  "  the  foundation  of  the  law  of 
agency."  1  Parsons  on  Contracts,  *44;  Kasson  v.  Noltner,  43  Wis. 
650. 

Xor  does  the  fact  that  the  note  was  not  in  the  possession  of  Tread- 
well  change  the  result.  The  want  of  possession  of  the  note  is  a  cir- 
cumstance to  be  considered  in  determining  the  question  of  authority, 
but  is  not  conclusive.  The  fact  that  the  bank  held  the  note  for  collec- 
tion would  not  prevent  the  owner  from  collecting  it  himself.  Flana- 
gan V.  Brown,  70  Cal.  257.  .  .  . 

We  therefore  advise  that  the  judgment  and  order  denying  a  new- 
trial  be  reversed,  and  the  cause  remanded  for  a  new  trial. 

Belcher,  C.  C,  and  Foote,  C,  concurred. 

The  Court.  For  the  reason  given  in  the  foregoing  opinion,  the 
judgment  and  order  denying  a  new  trial  are  reversed,  and  cause  re- 
manded for  a  new  trial. 

McKiNSTRY,  J.,  expressed  no  opinion.^ 

*  "  If,  In  the  case  at  bar,  the  McKeon  securities  had  been  In  Merwin's  possession, 
with  Mrs.  Winchester's  aliowance,  at  the  time  the  contested  payments  were  made, 
and  the  payments  had  been  made  in  good  faith  in  reiiance  upon  the  facts  of  sucti 
possession,  Merwin  would  in  iaw,  as  to  such  payments,  have  been  treated  as  the 
agent  of  Mrs.  Winchester.  In  cases  lilie  that  the  iaw  is  weil  settled  that  possession 
of  the  securities  by  the  agent,  of  itself,  in  the  absence  of  countervailing  facts, 
clothes  the  agent  with  apparent  authority ;  and  justifies  a  third  party,  relying 
upon  that  fact  and  acting  in  good  faith  and  without  notice,  in  making  payments 
upon  the  securities  to  the  agent.  Wheeler  v.  Guild,  20  PIclc.  545 :  Smith  v.  Kidd, 
68  N.  Y.  130 ;  Crane  v.  Gruenewald,  120  N.  Y.  274  ;  Haines  v.  Pohlmann,  25  N.  J. 
Eq.  179 ;  Lawson  v.  Carson,  50  N.  J.  Eq.  370 ;  Central  Trust  Co.  v.  Folsom,  167 
N.  Y.,  285. 

"  But  while  this  Is  so,  It  does  not  follow  that  such  possession  is,  as  matter  of 
law,  essential  to  the  existence  of  apparent  authority,  or  that  without  It  there  can 
be  no  apparent  authority.  In  reason,  other  facts  may  justify  a  third  party  In  in- 
ferring, or  a  court  in  finding,  the  existence  of  such  authority ;  and  we  Icnow  of  no 
case  holding  a  contrary  doctrine.  On  the  contrary,  it  has  been  distinctly  held  that 
such  possession  Is  not  in  every  case  essential  to  the  existence  of  apparent  authority. 
Doyle  V.  Corey,  170  Mass.  337  ;  Qulnn  v.  Dresbach,  75  Cal.  159 ;  Fitzgerald  v. 
Beckwitb,  182  Mass.  177.  Of  course,  such  possession  or  the  want  of  It  is  ever,  in 
cases  of  this  kind,  a  fact  of  great  significance  and  importance."  Union  Trust  Co.  v. 
McKeon,  76  Conn.  $08,  513. 


DREW   V.   NUNN". 

4Q.  B.  D.  (C.  A.)  661.     1875. 

[Reported  herein  at  p.  22.] 
10 


146  HANNON   V.   SIEGEL-COOPEE  CO.  [CHAP.   IV. 

BEADISH   V.   BELKNAP. 

41  Vt.  172.     1868. 
[Reported  herein  at  p.  172.] 


HANNON  V.   SIEGEI/-COOPER  CO. 

167  N.  Y.  244.     1901. 
[Reported  herein  at  p.  470.] 


CHAP,   v.]      FORMATION   OF   THE   EELATION   BY   NECESSITY.  147 


CHAPTER   V. 

FOEMATION    OF    THE    KeLATION    BY    KeCESSITT. 

BENJAMIN"   V.   DOCKHAM. 

134  Mass.  418.     1883. 

Holmes,  J.  The  plaintiff's  declaration  was  for  milk  delivered  to 
the  defendant  by  the  plaintiff  at  the  defendant's  request.  His  proof 
was  of  a  delivery  to  the  defendant's  wife,  who  was  living  apart  from 
her  husband,  without  means  of  support,  by  reason  of  his  cruelty.  The 
only  ground  of  exception  which  we  are  asked  to  consider  is,  that  there 
was  a  variance  between  the  declaration  and  proof.  If  there  were  such 
a  variance,  as  the  case  has  been  tried  on  its  merits,  and  it  appears  from 
the  statement  of  the  defendant's  counsel  himself  that  there  can  have 
been  no  surprise,  an  amendment  would  be  allowed.  Peck  v.  Waters, 
104  Mass.  345,  351 ;  Cleaves  v.  Lord,  3  Gray,  66.  But  we  think  no 
amendment  is  necessary.  The  allegation  of  delivery  to  the  defendant 
would  seem  to  be  sufficient  in  a  common  count,  even  when  the  de- 
livery was  to  a  third  person  at  the  defendant's  request.  Bull  v.  Sibbs, 
8  T.  R.  327,  328;  2  Chitty  PL  (7th  ed.)  47,  n.  Z.;  (6th  ed.)  56,  n.  w. 
A  fortiori  when  it  was  to  the  defendant's  wife,  who  at  common  law 
is  one  person  with  her  husband.  Boss  v.  Noel,  Bull.  N.  P.  136 ;  Rams- 
den  V.  Ambrose,  1  Stra.  127.  And  in  those  cases  where  the  law  au- 
thorizes a  wife  to  pledge  her  husband's  credit,  even  against  his  will, 
it  creates  a  compulsory  agency,  and  her  request  is  his  request. 

Exceptions  overruled. 


BERGH   V.   WARNER. 

47  Minn.  250.     1891. 

Appeal  by  plaintiff  from  an  order  refusing  a  new  trial  after  a  trial 
by  the  court  and  judgment  ordered  for  defendant. 

Mitchell,  J.  It  is  sought  in  this  action  to  hold  the  defendant 
liable  for  debts  contracted  by  his  wife  during  coverture  and  cohabi- 
tation. The  first  cause  of  action  is  for  the  price  of  a  pair  of  diamond 
ear-rings,  purchased  by  the  wife  for  her  own  use.  .  .  . 

The  wife  has,  by  virtue  of  the  marriage  relation  alone,  no  authority 
to  bind  her  husband  by  contracts  of  a  general  nature.  She  may,  how- 
ever, be  his  agent,  and,  as  such,  bind  him.    This  agency  is  frequently 


148  BERGH   V.   WARNER,  [CIIAP.    V. 

spoken  of  as  being  of  two  kinds  —  First,  that  which  the  law  creates 
as  the  result  of  the  marriage  relation,  by  virtue  of  which  the  wife  is 
authorized  to  pledge  the  husband's  credit  for  the  purpose  of  obtaining 
those  necessaries  which  the  husband  himself  has  neglected  or  refused 
to  furnish;  second,  that  which  arises  from  the  authority  of  the  hus- 
band, expressly  or  impliedly  conferred,  as  in  other  cases.  The  first  of 
these,  sometimes  called  an  "  agency  in  law,"  or  an  "  agency  of  neces- 
sity," is  not,  accurately  speaking,  referable  to  the  law  of  agency ;  for 
the  liability  of  the  husband  in  such  cases  is  not  at  all  dependent  upon 
any  authority  conferred  by  him.  He  would,  under  such  circum- 
stances, be  liable  although  the  necessaries  were  furnished  to  the  wife 
against  his  express  orders.  The  real  foundation  of  the  husband's 
liability  in  such  cases  is  the  clear  legal  duty  of  every  husband  to  sup- 
port his  wife,  and  supply  her  with  necessaries  suitable  to  her  situation 
and  his  own  circumstances  and  condition  in  life.  But  the  wife's 
authority  on  this  ground  to  contract  debts  on  the  credit  of  her  hus- 
band is  limited  in  its  extent  and  nature  to  the  legal  requirements 
fixed  for  its  creation,  of  the  existence  of  which  those  persons  who 
assume  to  deal  with  the  wife  must  take  notice  at  their  peril.  If  they 
attempt  to  hold  the  husband  liable  on  this  ground,  the  burden  of 
proof  is  upon  them  to  show  —  first,  that  the  husband  refused  or 
neglected  to  provide  a  suitable  support  for  his  wife ;  and,  second,  that 
the  articles  furnished  were  necessaries.  The  term  "  necessaries,"  in 
its  legal  sense,  as  applied  to  a  wife,  is  not  confined  to  articles  of  food 
and  clothing  required  to  sustain  life  or  preserve  decency,  but  includes 
such  articles  of  utility,  or  even  ornament,  as  are  suitable  to  maintain 
the  wife  according  to  the  estate  and  rank  of  her  husband. 

In  regard  to  the  much  vexed  question  as  to  how  it  is  to  be  deter- 
mined, in  a  given  case,  whether  the  articles  furnished  were  necessaries, 
the  general  rule  adopted  is  that  laid  down  by  Chief  Justice  Shaw  in 
Davis  V.  Caldwell  (13  Cush.  512),  viz.,  that  it  is  a  question  of  fact  for 
the  jurj%  unless  in  a  very  clear  case,  where  the  court  would  be  justified 
in  directing  authoritatively  that  the  articles  cannot  be  necessaries. 

In  this  case  the  plaintiff  utterly  failed  to  establish  a  right  to  recover 
for  the  articles  sued  for  in  the  first  cause  of  action  as  "  necessaries." 
Conceding,  for  the  sake  of  argument,  that,  in  view  of  the  estate  and 
rank  of  the  defendant,  the  trial  judge  would  have  been  justified  in 
finding  as  a  fact  that  diamond  ear-rings  were  necessaries ;  yet,  so  far 
from  there  being  any  evidence  that  the  defendant  neglected  or  refused 
to  provide  his  wife  a  suitable  support,  it  affirmatively  appeared  that 
he  provided  for  her  amply,  and  even  liberally. 

The  only  other  ground  upon  which  the  defendant  could  be  held 
liable  was  by  proof  that  he  expressly  or  impliedly  authorized  his  wife 
to  purchase  the  articles  on  his  credit.  This  is  purely  and  simply  a 
question  of  agency,  which  rests  upon  the  same  considerations  which 
control  the  creation  and  existence  of  the  relation  of  principal  and 


CHAP,   v.]      FORMATION   OF  THE  RELATION   BY   NECESSITY.  149 

agent  between  other  persons.  The  ordinary  rules  as  to  actual  and 
ostensible  agency  must  be  applied.  The  agency  of  the  wife,  if  it 
exists,  must  be  by  virtue  of  the  authorization  of  the  husband,  and  this 
may,  as  in  other  cases,  be  express  or  implied.  Her  authority,  how- 
ever, when  implied,  is  to  be  implied  from  acts  and  conduct,  and  not 
from  her  position  as  wife  alone.  Of  course,  the  husband,  as  well  as 
every  principal,  is  concluded  from  denying  that  the  agent  had  such 
authority  as  he  was  held  out  by  his  principal  to  have,  in  such  a  man- 
ner as  to  raise  a  belief  in  such  authority,  acted  on  in  making  the  con- 
tract sought  to  be  enforced.  Such  liability  is  not  founded  on  any 
rights  peculiar  to  the  conjugal  relation,  but  on  other  grounds  of  uni- 
versal application.  By  having,  without  objection,  permitted  his  wife 
to  contract  other  bills  of  a  similar  nature  on  his  credit,  or  by  pay- 
ment of  such  bills  previously  incurred,  and  thus  impliedly  recognizing 
her  authority  to  contract  them,  a  husband  may  have  clothed  his  wife 
with  an  ostensible  agency  and  apparent  authority  to  contract  the  bill 
sued  on,  so  as  to  render  him  liable,  although  she  had  no  actual  author- 
ity, just  as  any  principal  would  be  liable  under  like  circumstances.  It 
is  also  true  that  where  the  wife  is  living  with  her  husband,  she,  as  the 
head  and  manager  of  his  household,  is  presumed  to  have  authority 
from  him  to  order  on  his  credit  such  goods  or  services  as,  in  the  ordi- 
nary arrangement  of  her  husband's  household,  are  required  for  family 
use.  Flynn  v.  Messenger,  28  Minn.  208,  9  N".  W.  Rep.  759 ;  Wagner 
V.  Nagel,  33  Minn.  348,  23  N".  W.  Eep.  308.  This  presumption  is 
founded  upon  the  well-known  fact  that,  in  modern  society,  almost 
universally,  the  wife,  as  the  manager  of  the  household,  is  clothed  with 
authority  thus  to  pledge  her  husband's  credit  for  articles  of  ordinary 
household  use.  But  the  articles  sued  for  here  are  not  of  that  charac- 
ter, and  no  such  presumption  would  arise  from  the  mere  fact  that  the 
parties  were  living  together  as  husband  and  wife.  To  hold  the  hus- 
band liable  there  must  have  been  some  affirmative  proof  of  authority 
•from  him,  either  express,  or  implied  from  his  acts  and  conduct.  In 
this  case  there  is  an  entire  absence  of  any  evidence  of  express  author- 
ity. Indeed,  the  evidence  tends  quite  strongly  to  show  that  it  was  his 
expressed  wish  that  his  vnie  would  incur  no  bills,  and  that  his  monthly 
allowance  to  her  of  "  pin-money  "  was  intended  to  avoid  any  occasion 
for  her  doing  so.  The  evidence  of  acts  and  conduct  on  part  of  defend- 
ant tending  to  show  that  he  had  clothed  his  wife  with  apparent  or 
ostensible  authority  to  buy  any  such  articles  on  his  credit  was  exceed- 
ingly slight.  The  mere  fact  that  he  furnished  his  wife  with  expensive 
wearing  apparel  had  little,  if  any,  tendency  to  prove  any  such  fact. 
The  same  may  be  said  of  the  evidence  that  on  one  occasion  he  paid  a 
dressmaker's  bill  of  $136,  contracted  by  his  wife,  especially  as  there 
is  no  evidence  that  plaintiff  had  any  knowledge  of  that  fact.  As  to 
previous  dealings  between  the  parties,  the  only  evidence  is  that  on 
various  occasions  plaintiff  had  sold  the  wife  articles  of  jewelry  for 


150  BERGH   V.   WARNER.  [CHAP.   V. 

cash,  but  on  one  occasion,  nearly  three  years  before,  he  had  sold  her 
on  credit  a  bill  of  jewelry  amounting  to  some  $19,  the  principal  item 
of  which  was  a  pair  of  opera  glasses  of  the  value  of  $12,  and  that  this 
bill  was  charged  on  plaintiff's  books  to  the  wife,  but  that  the  husband, 
about  a  year  afterwards,  paid  it.  AVe  do  not  think  that  the  evidence 
was  such  as  to  require  a  finding  that  the  wife  had  authority  to  pur- 
chase the  articles  on  the  credit  of  the  defendant.  .  .  . 

The  order  appealed  from  is  affirmed  as  to  the  first  cause  of 
action.^  .  .  . 

^  Gates  V.  Brower,  9  N.  Y.  205,  proceeds  upon  the  theory  of  the  husband's  assent 
or  ratification.  Wanamaker  v.  Weaver,  176  N.  Y.  75,  decides  that  where  there  Is  an 
alleged  agency  by  necessity  the  husband  may  show  that  the  wife  is  already  amply 
supplied  with  articles  of  the  same  character  as  those  purchased  or  with  money  for 
their  purchase. 

In  Johnson  v.  Briscoe,  104  Mo.  App.  493  (1903),  an  action  was  brought  against  a 
husband  to  recover  the  purchase  price  of  a  gold  watch  bought  by  the  defendant's 
wife  from  the  plaintiff.  Goode,  J.,  said  in  part  (pages  498,  500)  :  "The  defendant 
and  his  wife  were  dwelling  together  contentedly,  so  far  as  appears,  and  he  was  pro- 
viding for  the  wants  and  comfort  of  his  family,  including  herself,  to  their  satis- 
faction, or,  at  least  without  complaint.  There  was  no  proof  that  she  had  ever  asked 
him  to  get  her  a  watch,  or  that  he  was  unwilling  to  get  her  one.  There  may  be  a 
good  reason  why,  at  a  particular  time,  it  is  inexpedient  for  a  man  to  purchase  such  an 
article,  useful  but  not  Indispensable,  though  he  may  be  perfectly  willing  to  purchase 
it  when  his  affairs  permit.  He  certainly  ought  to  have  something  to  say  about  what 
debts  he  will  incur,  if  he  is  providing  for  his  family  according  to  his  means.  Nor  is  it 
conclusive  of  his  duty  that  wives  of  persons  of  his  fortune  and  station  have  watches. 
That  fact  by  no  means  determines  that  he  had  been  so  remiss  in  not  providing  one 
for  his  wife  that  she  may  get  it  on  his  credit,  as  a  thing  of  necessity.  The  case  is 
very  different  where  a  man's  neglect  is  a  source  of  distress  to  his  wife,  whether  she 
has  been  abandoned  or  is  living  with  him.  With  facts  like  those  we  have  before  us, 
we  think  the  power  of  a  wife  to  pledge  her  husband's  credit  must  rest  on  an  agency, 
either  express  or  implied.  Everything  Mrs.  Briscoe  bought  from  the  plaintiff  was 
sold  to  her  on  the  assumption,  not  that  she  was  unsuitably  provided  for,  or  was 
suffering ;  but  as  one  having  authority  to  pledge  her  husband's  credit  for  such 
articles  as  she  was  accustomed  to  buy.  The  better  decisions  declare  the  law  to  be 
that  when  husband  and  wife  are  living  together,  with  the  family  relation  undis- 
turbed, and  he  is  making  such  provision  as  excites  no  comment  among  their  friends 
and  no  complaint  from  her,  the  question  of  her  right  to  pledge  his  credit  for  any 
purchase  depends  on  her  actual  or  ostensible  authority,  and  is  to  be  determined  by 
the  rules  of  the  law  of  agency.  .  .  . 

"  As  to  necessaries  in  the  sense  of  the  old  cases,  that  is,  food,  clothing,  shelter, 
medical  attendance,  and  such  things  as  every  one  must  have,  there  can  never  be  a 
question  of  a  wife's  right  to  provide  them  if  her  husband  does  not.  The  law  holds 
that,  among  the  various  obligations  a  man  may  be  under,  the  primary  one  Is  to  sup- 
port his  family.  Hence,  our  homestead  and  exemption  statutes.  And  whether  a 
woman  is  treated  by  legal  fiction  or  by  an  inference  from  the  facts,  as  an  agent  in 
the  matter,  or  is  regarded  as  exercising  a  prerogative  attached  by  the  law  to  the 
status  of  wife,  is  for  practical  purposes  immaterial  when  the  suit  is  for  absolute 
necessaries  sold  to  her ;  though  the  agency  notion  is  then  theoretically  unsound ; 
for  such  indispensable  things  may  be  furnished  at  the  husband's  cost,  notwith- 
standing a  notice  from  him  not  to  furnish  her.  But  when  necessaries  are  taken  to 
mean  not  only  articles  of  strict  necessity,  but  those  needed  to  equalize  the  wife  in 
comfort  to  other  women  of  her  condition,  an  element  of  uncertainty  is  Introduced. 
For  when  is  a  man  bound  to  provide  such  things,  and  who  shall  Judge  if  he  was 
delinquent?  Shall  he,  his  wife,  a  merchant,  or  a  Jury  decide  the  matter?  If  the 
question  is  remitted  in  every  instance  to  a  Jury,  to  say  that  the  husband  is  or  is  not 
bound,  accordingly  as  they  may  deem  the  articles  purchased  to  be  necessary  or  the 
reverse,  a  privilege  of  no  defined  limits  to  use  her  husband's  credit  will  be  accorded 
to  the  wife,  and  his  financial  affairs  largely  taken  from  his  control.  The  sounder 
doctrine  is  that  the  husband's  responsibility  does  not  stand  on  the  question  of 
necessity  in  a  case  like  this ;  but,  as  said,  on  the  wife's  agency.  The  necessity  of 
the  article  bought,  the  means  of  the  parties,  their  condition  in  life,  and  the  previous 
conduct  of  the  husband  with  reference  to  the  wife's  purchases  In  his  name,  —  all 
enter  into  the  Inquiry  as  circumstances  bearing  on  the  measure  of  authority  she  has 
received  or  appears  to  have  received  from  him.  We  hold  this  case  should  be  referred 
to  the  Jury  on  such  evidence,  to  say  whether  Mrs.  Briscoe  acted  within  the  scope  of 


I 


CHAP,   v.]      FORMATION   OF  THE   RELATION   BY   NECESSITY.  151 

WALSH   V.   CUELEY. 
42  N.  Y.  St.  Rep.  (N.  Y.  C.  P.  Gen.  T.)  470.     1892. 

In  an  action  brought  in  the  district  court  of  the  city  of  New  York 
for  the  seventh  judicial  district  defendant  pleaded  a  counterclaim, 
which  was  allowed  by  the  court,  and  judgment  entered  for  plaintiff 
for  the  balance,  from  which  judgment  plaintiff  appeals. 

BooKSTAVER,  J.  In  April,  1890,  the  plaintiff  sent  to  defendant, 
who  was  a  carriage  builder  in  the  city  of  New  York,  a  phaeton  to  be 
sold,  fixing  the  price  which  he  was  to  receive  for  the  same  at  $125  net. 
About  a  month  later,  plaintiff  sent  defendant  another  wagon  to  be 
sold.  It  was  admitted  on  the  trial  that  the  phaeton  had  been  sold  for 
$125.  The  wagon  was  not  sold,  and  was  taken  away  by  the  plaintiff 
because  it  had  not  been.  Before  the  action  was  commenced  a  settle- 
ment was  repeatedly  asked  for  by  the  plaintiff,  and  the  defendant 
finally  rendered  him  a  bill  charging  $119.70  for  repairs  to  the  two 
wagons  and  storage,  showing  a  balance  in  plaintiff's  favor  of  $5.30 
only. 

If  we  admit  all  of  the  defendant's  evidence  to  be  exactly  as  stated 
by  him,  we  do  not  think  he  is  entitled  to  his  bill  for  repairs.  He  ad- 
mits the  plaintiff  did  not  order  the  repairs  personally,  and  that  he  had 
no  conversation  with  him  on  the  subject  at  any  time ;  and  it  is  appar- 
ent from  the  evidence  that  the  repairs,  if  ordered  by  anyone,  were 
ordered  by  the  son  of  the  plaintiff.  There  is  no  proof  that  this  son 
was  authorized  by  his  father  to  negotiate  for  repairs  or  to  order  them. 
The  defendant  himself  testifies  that  he  could  not  say  whether  the 
plaintiff  ever  authorized  his  son  to  direct  the  repairs,  and  that  he  took 
it  for  granted  that  a  man's  son  had  authority,  or  he  would  not  have 
come ;  in  other  words,  that  he  made  no  inquiry  as  to  the  son's  author- 
ity. The  son  denies  giving  the  order  for  the  repairs.  Under  these  cir- 
cumstances we  think  there  was  a  failure  to  establish  an  agency  on  the 
part  of  the  son  to  act  for  his  father. 

It  has  been  repeatedly  decided  that  mere  relationship  does  not  con- 
fer authority  to  act  as  agent.  In  Le  Count  v.  Greenley,  6  St.  Rep.  91, 
it  was  held  that  a  father  could  not  be  presumed  to  have  authority  to 
act  for  a  daughter.  In  Ritch  v.  Smith,  82  N.  Y.  627,  it  was  held  that 
a  son,  merely  as  such,  did  not  have  authority  to  act  for  his  father.  In 
Hutchinson  v.  Brook,  15  Daly,  486 ;  29  St.  Rep.  317,  it  was  held  by 
this  court  that  a  husband  who  was  acting  as  a  general  agent  for  his 
wife  in  the  management  of  the  feed  business  could  not  bind  her  for 
the  repairs  to  his  stable. 

her  ostensible  or  actual  agency  when  she  bought  the  watch.    The  instructions  given 
at  the  trial  went  further  than  this  rule,  and  made  the  defendant  answerable  If  the  • 
watch  was  needed  to  adorn  the  defendant's  wife  like  her  neighbors  and  women  In 
the  same  social  sphere."     A  Judgment  for  plaintiff  was  reversed  and  a  new  trial 
ordered. 


152  TERRE  HAUTE   &   IXD.   R.   R.   CO.    V.   McMURRAT.       [CHAP.    V. 

It  was,  therefore,  error  for  the  justice  to  allow  anything  for  these 
repairs,  and  for  this  reason  the  judgment  should  be  reversed  and  a 
new  trial  ordered,  with  costs  to  the  appellant  to  abide  the  event.  On 
such  new  trial  it  may  be  more  satisfactorily  established  that  the  de- 
fendant was  entitled  to  storage  for  the  wagon  that  was  taken  away  so 
that  he  should  be  allowed  it,  and,  on  the  other  hand,  it  may  appear 
that  the  defendant  neglected  his  duty  in  regard  to  the  sale  of  the  sec- 
ond wagon,  and  would  be  entitled  to  no  storage. 

BiscHOFF,  J.,  concurs. 


TEEEE   HAUTE   AND    INDIANAPOLIS    KAILEOAD    CO. 
V.  McMUEEAY. 

98  Ind.  358.     1884. 

Action  for  compensation  for  services  as  surgeon.  Judgment  for 
plaintiff.    Defendant  appeals. 

Elliott,  J.  The  facts  in  this  case  are  simple,  and  lie  within  a 
narrow  compass,  but  the  questions  of  law  are  important  and  difficult. 

Frankfort  is  a  way  station  on  the  line  of  appellant's  road,  distant 
many  miles  from  the  principal  offices  of  the  company  and  from  the 
residences  of  its  chief  officers.  At  this  station,  at  one  o'clock  of  the 
morning  of  July  2,  1881,  Thomas  Coon,  a  brakeman  in  the  service  of 
the  appellant,  had  his  foot  crushed  between  the  wheel  of  a  car  of  the 
train  on  which  he  was  employed  as  a  brakeman,  and  the  rail  of  the 
track.  The  injury  was  such  as  demanded  immediate  surgical  atten- 
tion. The  conductor  of  the  train  requested  the  appellee,  who  was  a 
surgeon,  residing  in  the  town  of  Frankfort,  to  render  the  injured  man 
professional  aid,  and  informed  the  appellee  that  the  company  would 
pay  him  for  such  services.  At  the  time  the  accident  happened,  and  at 
the  time  the  surgeon  was  employed,  there  was  no  officer  superior  to 
the  conductor  at  the  town  of  Frankfort.  There  was  at  the  station  a 
resident  agent  who  had  full  knowledge  of  the  injury  to  Coon,  and  of 
appellee's  employment.  This  agent  was  in  telegraphic  communica- 
tion with  the  principal  officers  of  the  company,  but  did  not  communi- 
cate with  them.  The  trial  court  held  the  appellant  liable  for  the 
reasonable  value  of  the  services  rendered  by  the  appellee,  and  awarded 
him  $100. 

In  ordinary  cases,  a  conductor  or  other  subordinate  agent  has  no 
authority  to  employ  surgical  assistance  for  a  servant  of  the  corpora- 
tion who  receives  an  injury  or  becomes  ill.  We  do  not  doubt  that  the 
general  rule  is  that  a  conductor  has  no  authority  to  make  contracts 
with  surgeons,  and  if  this  principle  governs  all  cases  the  discussion 
is  at  an  end;  but  we  do  not  think  it  does  rule  every  case,  for  there 


CHAP,   v.]      FORMATION   OF  THE  RELATION   BY   NECESSITY.  153 

may  be  cases  so  strongly  marked  as  to  constitute  a  class  in  themselves 
and  one  governed  by  a  different  rule. 

The  authority  of  an  agent  is  to  be  determined  from  the  facts  of  the 
particular  case.  Facts  may  exist  which  will  greatly  broaden  or  greatly 
lessen  an  agent's  authority.  A  conductor's  authority  in  the  presence 
of  a  superior  agent  may  dwindle  into  insignificance ;  while  in  the  ab- 
sence of  a  superior  it  may  become  broad  and  comprehensive.  An 
emergency  may  arise  which  will  require  the  corporation  to  act  in- 
stantly, and  if  the  conductor  is  the  only  agent  present,  and  the  emer- 
gency is  urgent,  he  must  act  for  the  corporation,  and  if  he  acts  at  all, 
his  acts  are  of  just  as  much  force  as  those  of  the  highest  officer  of  the 
corpora:tion.  In  this  instance  the  conductor  was  the  highest  officer  on 
the  ground;  he  was  the  sole  representative  of  the  corporation;  he  it 
was  upon  whom  devolved  the  duty  of  representing  the  corporation  in 
matters  connected  within  the  general  line  of  his  duty  in  the  sudden 
emergency  which  arose  out  of  the  injury  to  the  fellow-servant  imme- 
diately under  his  control;  either  he,  as  the  superior  agent  of  the 
company,  must,  in  such  cases,  be  its  representative,  or  it  has  none. 
There  are  cases  where  the  conductor  is  the  only  representative  of  the 
corporation  that  in  the  emergency  it  can  possibly  have.  There  are 
cases  where  the  train  is  distant  from  the  supervision  of  superior 
officers,  where  the  conductor  must  act,  and  act  for  the  company,  and 
where,  for  the  time,  and  under  the  exigencies  of  the  occasion,  he  is  its 
sole  representative,  and  if  he  be  its  only  representative,  he  must,  for 
the  time  and  the  exigency,  be  its  highest  representative.  Simple 
examples  will  prove  this  to  be  true.  Suppose,  for  illustration,  that  a 
train  is  brought  to  a  halt  by  the  breaking  of  a  bolt,  and  that  near  by 
is  a  mechanic  who  can  repair  the  broken  bolt  and  enable  the  train  to 
proceed  on  its  way,  may  not  the  conductor  employ  the  mechanic? 
Again,  suppose  a  bridge  is  discovered  to  be  unsafe,  and  that  there  are 
timbers  at  a  neighboring  mill  which  will  make  it  safe,  may  not  the 
conductor,  in  behalf  of  his  principal,  employ  men  to  haul  the  timber 
to  the  bridge?  Once  more,  suppose  the  engineer  of  a  locomotive  to 
be  disabled,  and  that  it  is  necessary  to  at  once  move  the  train  to  avoid 
danger,  and  there  is  near  by  a  competent  engineer,  may  not  the  con- 
ductor employ  him  to  take  the  train  out  of  danger  ?  In  these  examples 
we  mean  to  include,  as  a  silent  factor,  the  fact  that  there  is  an  emer- 
gency, allowing  no  time  for  communicating  with  superior  officers,  and 
requiring  immediate  action.  If  it  be  true  that  there  are  cases  of 
pressing  emergency  where  the  conductor  is  on  the  special  occasion  the 
highest  representative  of  the  company,  then  it  must  be  true  that  he 
may  do,  in  the  emergency,  what  the  chief  officer,  if  present,  might  do. 
If  the  conductor  is  the  only  agent  who  can  represent  the  company, 
then  it  is  inconceivable  that  he  should,  for  the  purposes  of  the  emer- 
gency, and  during  its  existence,  be  other  than  the  highest  officer.  The 
position  arises  with  the  emergency,  and  ends  with  it.    The  authority 


154  TEERE   HAUTE  &   IND.    R.   R.   CO.    V.   McMURRAY.       [CHAP.    V. 

incident  to  the  position  is  such,  and  such  only,  as  the  emergency  im- 
peratively creates. 

Assuming,  as  we  may  justly  do,  that  there  are  occasions  when  the 
exigency  is  so  great,  and  the  necessity  so  pressing,  that  the  conductor 
stands  temporarily  as  the  representative  of  the  company,  with  au- 
thority adequate  to  the  urgent  and  immediate  demands  of  the  occa- 
sion, we  inquire  what  is  such  an  emergency  as  will  clothe  him  with 
this  authority  and  put  him  in  the  position  designated.  Suppose  that 
a  locomotive  is  overturned  upon  its  engineer,  and  he  is  in  immediate 
danger  of  great  bodily  harm,  would  it  not  be  competent  for  the  con- 
ductor to  hire  a  derrick,  or  a  lifting  apparatus,  if  one  were  near  at 
hand,  to  lift  the  locomotive  from  the  body  of  the  engineer?  Surely 
some  one  owes  a  duty  to  a  man,  imperilled  as  an  engineer  would  be 
in  the  case  supposed,  to  release  him  from  peril;  and  is  there  any 
one  upon  whom  this  duty  can  be  so  justly  put  as  upon  his  employer  ? 
The  man  must,  in  the  case  supposed,  have  assistance,  and  do  not  the 
plainest  principles  of  justice  require  that  the  primary  duty  of  yielding 
assistance  should  devolve  upon  the  employer  rather  than  on  strangers  ? 
An  employer  does  not  stand  to  his  servants  as  a  stranger;  he  owes 
them  a  duty.  The  cases  all  agree  that  some  duty  is  owing  from  the 
master  to  the  servant,  but  no  case  that  we  have  been  able  to  find 
defines  the  limits  of  this  duty.  Granting  the  existence  of  this  general 
duty,  and  no  one  will  deny  that  such  a  duty  does  exist,  the  inquiry  is 
as  to  its  character  and  extent.  Suppose  the  axle  of  a  car  to  break 
because  of  a  defect,  and  a  brakeman's  leg  to  be  mangled  by  the  de- 
railment consequent  upon  the  breaking  of  the  axle,  and  that  he  is 
in  immediate  danger  of  bleeding  to  death  unless  surgical  aid  is  sum- 
moned at  once,  and  suppose  the  accident  to  occur  at  a  point  where 
there  is  no  station  and  when  no  officer  superior  to  the  conductor  is 
present,  would  not  the  conductor  have  authority  to  call  a  surgeon? 
Is  there  not  a  duty  to  the  mangled  man  that  some  one  must  discharge ; 
and  if  there  be  such  a  duty,  who  owes  it,  the  employer  or  a  stranger? 
Humanity  and  justice  unite  in  affirming  that  some  one  owes  him 
this  duty,  since  to  assert  the  contrary  is  to  affirm  that  upon  no  one 
rests  the  duty  of  calling  aid  that  may  save  life.  If  we  concede  the 
existence  of  this  general  duty,  then  the  further  search  is  for  the  one 
who  in  justice  owes  the  duty,  and  surely,  where  the  question  comes 
between  the  employer  and  a  stranger,  the  just  rule  must  be  that  it 
rests  upon  the  former. 

(After  discussing  various  authorities,^  the  court  proceeds.)  If 
we  are  right  in  our  conclusion  that  an  emergency  may  arise  which 

»  Marquette,  &c.  R.  v.  Taft,  28  Mich.  289 ;  Northern  Central  Ry.  v.  State,  29  Md. 
420 ;  Walker  v.  Great  Western  Ry.,  L.  R.  2  Exch.  228  ;  Swazey  v.  Union  Mfg.  Co..  42 
Conn.  556 ;  Atlantic,  &c.,  R.  v.  Relsner,  18  Kans.  458 ;  Atchison,  &c.,  R.  v.  Reecher, 
24  Kans.  228;  Toledo,  &c.,  Ry.  v.  Rodrlgues,  47  111.  188;  Toledo.  &c.,  Ry.  v. 
Prince,  50  111.  26;  Indianapolis,  Ac,  R.  v.  Morris,  67  III.  295;  Cairo,  &c.,  R.  v. 
Mahoney,  82  111.  73. 


I 


CHAP,    v.]       FORMATION   OF   THE   RELATION   BY   NECESSITY.  155 

will  constitute  a  conductor,  for  the  time  and  the  emergency,  the  chief 
officer  of  the  corporation  present,  then  these  cases  are  strongly  in 
support  of  our  position  that  he  may,  in  cases  of  urgent  necessity, 
bind  the  corporation  by  contracting  with  a  surgeon.  For,  once  it  is 
conceded  that  the  officer  having  a  right  to  represent  the  company  is  the 
company,  it  inevitably  follows  that  his  contract  is  that  of  the  cor- 
poration. These  cases  do  deny,  however,  in  general  terms,  the  au- 
thority of  a  station  agent  or  conductor  to  employ  a  surgeon,  but  they 
affirm  that  if  the  superintendent  has  notice  of  the  services  rendered 
by  the  surgeon,  and  does  not  disavow  the  agent's  acts,  the  company 
will  be  bound.  It  is  to  be  noted  that  in  all  of  these  cases  the  com- 
pany was  held  liable  on  the  ground  of  ratification  by  the  superin- 
tendent, and  there  was  really  no  decision  of  any  other  question  than 
that  a  failure  of  the  superintendent  to  disavow  the  contract  of  the 
conductor  or  station  agent  rendered  the  company  liable.  There  was 
no  discussion  of  the  authority  of  a  conductor  in  cases  of  immediate 
and  urgent  necessity.  The  reasoning  of  the  court  in  these  cases 
strongly  indicates  that  the  act  of  the  superior  officer,  whoever  he  may 
be,  on  the  occasion  and  under  the  emergency,  would  be  deemed  the 
act  of  the  corporation  which  he  assumes  to  represent.  In  the  last  of 
these  cases  it  is  said :  "  While  a  railroad  company  is  under  no  legal 
obligation  to  furnish  an  employee,  who  may  receive  injuries  while  in 
the  service  of  the  company,  with  medical  attendance,  yet,  where  a 
day  laborer  has,  by  an  unforeseen  accident,  been  rendered  helpless 
when  laboring  to  advance  the  prosperity  and  the  success  of  the  com- 
pany, honesty  and  fair  dealing  would  seem  to  demand  that  it  should 
furnish  medical  assistance."  If  it  be  conceded  that  honesty  and  fair 
dealing  require  that  medical  assistance  should  be  furnished,  then  the 
law  requires  it,  for  the  law  always  demands  honesty  and  fair  dealing. 
It  would  be  a  cruel  reproach  to  the  law,  and  one  not  merited,  to 
declare  that  it  denied  to  an  injured  man  what  honesty  and  "  fair 
dealing  require." 

If  it  should  appear  that  a  man  had  been  denied  what  honesty  and 
fair  dealing  required  of  his  master,  and  death  should  result,  it  would 
seem  clear,  on  every  principle  of  justice,  that  the  master  would  be 
responsible  for  the  servant's  death.  Of  course  this  duty  could  not 
rest  upon  the  master  in  ordinary  cases,  but  should  rest  upon  him  in 
extraordinary  cases,  where  immediate  medical  assistance  is  impera- 
tively demanded.  The  case  of  Tucker  v.  St.  Louis,  &c.,  R.  W.  Co., 
54  Mo.  177,  does  decide  that  a  station  agent  has  no  authority  to  em- 
ploy a  surgeon,  but  no  element  of  pressing  necessity  entered  into  the 
case.  There  is  no  authority  cited  in  support  of  the  opinion,  nor  is 
there  any  reasoning.  All  that  is  said  is :  "  It  is  only  shown  that  they  " 
(the  station  agent  and  the  conductor)  "were  agents  of  defendant  in 
conducting  its  railroad  business,  which  of  itself  could  certainly  give 
them  no  authority  to  employ  physicians,  for  the  defendant,  to  attend 


156  TERRE  HAUTE  &  IND.   R.   R.    CO.    V.   MCMURRAT.       [CHAP.    V. 

to,  and  treat,  persons  accidentally  injured  on  the  roads."  It  may  be 
that  this  statement  is  true  in  ordinary  cases,  but  when  we  add  the 
element  of  immediate  and  pressing  necessity,  a  new  and  potent  factor 
is  introduced  into  the  case.  A  brief  opinion  was  rendered  in  Brown 
V.  Missouri,  &c.,  R.  W.  Co.,  67  Mo.  122,  declaring  that  the  superin- 
tendent of  the  company  could  not  bind  the  company  for  "  a  small  bill 
of  drugs  furnished  a  woman  who  had  been  hurt  by  the  locomotive  or 
cars  of  the  defendant."  It  may  be  said  of  the  last  cited  case  that  it 
presented  no  feature  of  emergency  requiring  prompt  action,  and  for 
aught  that  appears  in  the  meagre  opinion  of  a  very  few  lines,  there 
may  have  been  no  necessity  for  action.  But  it  is  further  to  be  said  of 
it,  that  if  it  is  to  be  deemed  as  going  to  the  extent  of  denying  the 
right  of  one  of  the  principal  officers  to  contract  for  medicine  in  a 
case  of  urgency,  it  finds  no. support  from  any  adjudged  case.  The 
case  of  Mayberry  v.  Chicago,  &c.,  R.  R.  Co.,  75  Mo.  492,  is  not  in 
point,  for  there  a  physician  employed  to  render  medical  aid,  and 
employed  for  no  other  purpose,  undertook  to  contract  for  boarding 
for  an  injured  man. 

The  learned  counsel  for  appellant  says,  in  his  argument :  "  In 
several  of  these  cases  the  court  takes  occasion  to  say  that  humanity,  if 
not  strict  justice,  requires  a  railroad  company  to  care  for  an  employee 
who  is  injured  without  fault  on  his  part  in  endeavoring  to  promote 
the  interests  of  the  company.  Whilst  this  may  be  true,  I  think  that 
humanity  and  strict  justice,  too,  would  at  least  permit  the  company 
to  adopt  the  proper  means  for  exercising  the  required  care,  and  of 
determining  the  cases  wherein  it  ought  to  be  exercised." 

It  seems  to  us  that  while  the  concession  of  the  counsel  is  required 
by  principle  and  authority,  his  answer  is  far  from  satisfactory.  Can 
a  man  be  permitted  to  die  while  waiting  for  the  company  to  determine 
when  and  how  it  shall  do  what  humanity  and  strict  justice  require? 
Must  there  not  be  some  representative  of  the  company  present,  in 
cases  of  dire  necessity,  to  act  for  it?  The  position  of  counsel  will 
meet  ordinary  cases,  but  it  falls  far  short  of  meeting  cases  where  there 
is  no  time  for  deliberation,  and  where  humanity  and  justice  demand 
instant  action.  From  whatever  point  of  view  we  look  at  the  subject, 
we  shall  find  that  the  highest  principles  of  justice  demand  that  a  sub- 
ordinate agent  may,  in  the  company's  behalf,  call  surgical  aid,  when 
the  emergencies  of  the  occasion  demand  it,  and  when  he  is  the  sole 
agent  of  the  company  in  whose  power  it  is  to  summon  assistance  to 
the  injured  and  suffering  servant.  Humanity  and  justice  are,  for  the 
most  part,  inseparable,  for  all  law  is  for  the  ultimate  benefit  of  man. 
The  highest  purpose  the  law  can  accomplish  is  the  good  of  society 
and  its  members ;  and  it  is  seldom,  indeed,  that  the  law  refuses  what 
humanity  suggests.  Before  this  broad  principle  bare  pecuniary  con-, 
siderations  become  as  things  of  little  weight.  There  may  be  cases  in 
which  a  denial  of  the  right  of  the  conductor  to  summon  medical 


CHAP,    v.]       FORMATION   OF   THE    RELATION   BY    NECESSITY.  157 

assistance  to  one  of  his  train  men  would  result  in  suffering  and  death ; 
while,  on  the  other  hand,  the  assertion  of  the  right  can,  at  most, 
never  do  more  than  entail  upon  the  corporation  pecuniary  loss.  It 
may  not  do  even  that,  for  prompt  medical  assistance  may,  in  many 
cases,  lessen  the  loss  to  the  company  by  preventing  loss  of  life  or  limb. 
The  authority  of  a  conductor  of  a  train  in  its  general  scope  is 
known  to  all  intelligent  men,  and  the  court  that  professes  itself 
ignorant  of  this  matter  of  general  notoriety  avows  a  lack  of  knowl- 
edge that  no  citizen  who  has  the  slightest  acquaintance  with  railroad 
affairs  would  be  willing  to  confess.  It  is  true  that  the  exact  limits  of 
his  authority  cannot  be  inferred  from  evidence  that  he  is  the  conductor 
in  charge  of  the  train,  but  the  general  duty  and  authority  may  be. 
This  general  authority  gives  him  control  of  the  train  men  and  of  the 
train,  and  devolves  upon  him  the  duty  of  using  reasonable  care  and 
diligence  for  the  safety  of  his  subordinates.  The  authority  of  the  con- 
ductor may  be  inferred,  as  held  in  Columbus,  &c.,  R.  W.  Co.  v.  Powell, 
40  Ind.  37,  from  his  acting  as  such  in  the  control  of  the  train,  but 
this  inference  only  embraces  the  ordinary  duties  of  such  an  agent. 
Many  cases  declare  that  the  conductor,  in  the  management  of  the 
train  and  matters  connected  with  it,  represents  the  company.  It  is 
true  that  the  agency  is  a  subordinate  one,  confined  to  the  subject- 
matter  of  the  safety  of  the  train  and  its  crew,  and  the  due  manage- 
ment of  matters  connected  with  it;  but  although  the  conductor  is  a 
subordinate  agent,  he  yet  has  broad  authority  over  the  special  subject 
committed  to  his  charge.  It  was  said  in  Jeffersonville  Ass'n  v.  Fisher, 
7  Ind.  699,  that  "  It  is  not  the  name  given  to  the  agent,  but  the  acts 
which  he  is  authorized  to  do,  which  must  determine  whether  they  are 
valid  or  not,  when  done."  In  another  case  it  was  said :  "  The  au- 
thority of  an  agent  being  limited  to  a  particular  business  does  not 
make  it  special ;  it  may  be  as  general  in  regard  to  that,  as  though  its 
range  were  unlimited."  Cruzan  v.  Smith,  41  Ind.  288.  This  subject 
was  discussed  in  Toledo,  &c.,  E.  W.  Co.  v.  Owen,  43  Ind.  405,  where 
it  was  said :  "  A  general  agent  is  one  authorized  to  transact  all  his 
principal's  business,  or  all  of  his  principal's  business  of  some  par- 
ticular kind.  A  special  agent  is  one  who  is  authorized  to  do  one  or 
more  special  things,  and  is  usually  confined  to  one  or  more  particular 
transactions,  such  as  the  sale  of  a  tract  of  land,  to  settle  and  adjust 
a  certain  account,  or  the  like.  That  the  authority  of  an  agent  is 
limited  to  a  particular  kind  of  business  does  not  make  him  a  special 
agent.  Few,  if  any,  agents  of  a  railroad  company  do,  or  can  attend 
to,  every  kind  of  business  of  the  company,  but  to  each  one  is  assigned 
duties  of  a  particular  kind,  or  relating  to  a  particular  branch  or 
department  of  the  business."  Wharton  says :  "  A  general  agent  is  one 
who  is  authorized  by  his  principal  to  take  charge  of  his  business  in 
a  particular  line."  Wharton  on  Agency,  117.  It  results  from  these 
familiar  principles,  that  the  conductor  of  a  train,  so  far  as  concerns  the 


158  LOUISVILLE,   ETC.,   RY.   V.   SMITH.  [CHAP.   V. 

direct  and  immediate  management  of  the  train  when  it  is  out  on  the 
road,  is,  in  the  absence  of  some  superior  officer,  the  general  agent  of 
the  company ;  but  even  general  agents  do  not  have  universal  powers, 
and  the  authority  of  such  agents  is  to  be  deduced  from  the  facts  sur- 
rounding the  particular  transaction.  2  Greenl.  Ev.  sees.  64-64a.  In 
some  instances,  then,  the  conductor  is  the  general  agent  of  the  com- 
pany ;  and  we  think  it  clear,  upon  principle  and  authority,  that  he  is 
such  an  agent  for  the  purpose  of  employing  surgical  assistance  where 
the  brakeman  of  his  train  is  injured  while  the  train  is  out  on  the 
road,  and  where  there  is  no  superior  officer  present,  and  there  is  an 
immediate  necessity  for  surgical  treatment.  A  conductor  cannot  be 
regarded  as  having  authority  to  employ  a  surgeon  when  the  train 
is  not  on  the  road  under  his  control,  or  where  there  is  one  higher  in 
authority  on  the  ground,  or  where  there  is  no  immediate  necessity 
for  the  services  of  a  surgeon. 

•  •••••• 

Judgment  affirmed} 

ZoLLAES,  C.  J.,  dissents  on  the  ground  that  it  is  not  sufficiently 
shown  that  the  conductor  had  authority  to  bind  the  company  by  his 
contract  with  appellee. 


LOUISVILLE,   ETC.,   EY.   v.    SMITH. 

121  Ind.  353.     1889. 

Elliott^  C.  J.  Jesse  Vawter  was  in  the  service  of  the  appellant, 
in  the  capacity  of  a  brakeman  on  one  of  its  freight  trains,  and  on  the 
morning  of  June  11th,  1885,  while  engaged  in  the  discharge  of  the 
duties  of  his  service,  at  Stinesville,  his  leg  was  broken.  Dr.  Judah, 
a  competent  and  skilful  surgeon,  of  Stinesville,  was  called  to  treat  the 
injured  man.  He  set,  dressed,  and  bandaged  the  broken  limb,  and 
gave  the  unfortunate  man  such  treatment  as  his  injury  required. 
After  the  broken  limb  had  been  set  and  bandaged  the  conductor 
caused  the  appellees,  who  lived  at  Gosport,  to  be  summoned  by  tele- 
graph, and  one  of  them  obeyed  the  summons  and  treated  the  patient 
in  conjunction  with  Dr.  Judah. 

The  appellant  had  fully  discharged  its  duty  to  its  injured  brakeman 
when  it  procured  the  services  of  a  competent  surgeon.    The  conductor 

>  A  petition  for  a  rehearing  was  overruled  In  98  Ind.  371.  This  case  was  disap- 
proved in  The  Pennsylvania  R.  Co.  v.  Gary.  22  Pla.  356,  where  the  court  holds  that 
a  roadmaster  or  conductor  has  no  authority  to  employ  a  physician.  See,  also,  as 
tending  to  the  same  conclusion,  Cooper  v.  N.  Y.  C,  etc.,  R.,  6  Hun  (N.  Y.)  276  (sta- 
tion-agent) ;    Stephenson  v.  N.  Y.  &  Harlem  R..  2  Duer  (N.  Y,)  341  (superintendent). 

Even  if  the  railroad  company  is  liable  for  the  physician's  services,  it  is  not  liable 
to  the  injured  person  for  the  physician's  mistake  or  want  of  skill.  Pittsburgh,  etc., 
R.  V.  Sullivan,  141  Ind.  83. 


CHAP,   v.]      FORMATION   OF  THE   RELATION   BY   NECESSITY.  159 

had  no  authority  to  employ  other  surgeons,  for  his  authority  was 
special,  not  general,  and  it  did  not  extend  beyond  the  duty  created 
by  the  emergency  which  required  him  to  act.  With  that  duty  his 
authority  arose,  and  with  it  terminated.  He  had  authority  to  do 
what  the  emergency  demanded,  in  order  to  preserve  his  injured  fellow- 
employee  from  serious  harm,  but  he  had  no  authority  to  do  more. 
When  the  company  had  procured  the  services  of  a  competent  surgeon 
it  did  all  that  it  was  morally  or  legally  bound  to  do,  and  the  con- 
ductor could  not  impose  upon  it  any  greater  obligation.  We  hold 
that  the  conductor  did  have  authority  to  at  once  employ  the  surgical 
aid  demanded  by  the  urgency  of  the  occasion ;  but  we  hold,  also,  that 
his  authority  did  not  extend  beyond  this  limit.  Terre  Haute,  etc, 
E.  E.  Co.  V.  McMurry,  98  Ind.  358 ;  Terre  Haute,  etc.,  E.  E.  Co.  v. 
Brown,  107  Ind.  336 ;  Terre  Haute,  etc.,  E.  E.  Co.  v.  Stockwell,  118 
Ind.  98. 

In  the  case  of  Terre  Haute,  etc.,  E.  E.  Co.  v.  Brown,  supra,  the 
distinction  is  drawn  between  cases  where  the  conductor  may  bind 
the  company,  and  cases  where  he  may  not;  and  this  case  belongs  to 
the  latter  class.  The  authority  of  the  conductor  was  exhausted  when 
a  competent  surgeon  was  procured,  and  he  could  not,  as  the  agent 
of  the  company,  employ  additional  surgeons.  If  the  urgency  of  the 
case  demanded  additional  surgical  aid,  the  surgeon  might  possibly 
be  justified  in  summoning  it ;  but,  as  held  in  Terre  Haute,  etc.,  E.  E. 
Co.  V.  Brown,  supra,  if  additional  assistance  is  required,  the  surgeon 
first  called  must  include  the  expense  in  his  charges. 

It  is  immaterial  whether  Dr.  Judah  was  called  by  a  brakeman  or 
by  the  conductor  in  person;  for,  if  he  was  called  by  the  direction, 
express  or  implied,  of  the  conductor,  or  if  the  conductor  confirmed 
what  had  been  done,  he  could  not  subsequently  employ  another  sur- 
geon. 

It  is  possible  that  Dr.  Smith  may  be  entitled  to  compensation  for 
one  visit,  that  made  in  obedience  to  the  telegram,  for  it  may  be  that 
he  had  a  right  to  act  upon  it  at  once,  but  when  he  found  the  in- 
jured man  attended  by  a  competent  surgeon  he  had  no  right  to  con- 
tinue to  give  the  case  attention,  and  charge  the  company.  He  was 
bound  to  know  that  when  the  agent,  who  possessed  limited  special 
authority,  had  procured  the  services  of  a  competent  surgeon  his  au- 
thority was  exhausted,  and  if,  with  this  knowledge,  he  continued  to 
give  the  injured  man  attention,  he  did  it  at  the  expense  of  some 
other  person  than  the  agent's  principal. 

Judgment  reversed. 


160  HOLMES   V.    MCALLISTER.  [CHAP.   ?. 

HOLMES  V.  McAllister. 

123  Mich.  493.     1900. 

Assumpsit  b}-  Arthur  D.  Holmes  against  David  J.  McAllister  and 
James  A.  McAllister,  copartners  as  the  Siau  Laundering  Company, 
for  medical  services  rendered  to  an  employee  of  defendants.  From, 
a  judgment  for  plaintiff,  defendants  bring  error. 

The  employee,  Augusta  Senken,  had  her  hand  seriously  injured  on 
April  19,  1898,  Neither  of  the  defendants  was  in  the  laundry  at  the 
time.  Defendant  James  usually  spent  most  of  his  time  there.  One 
Miss  McGrath,  the  forewoman,  had  charge  of  the  work  on  the  four 
floors  of  the  building;  hired  and  discharged  girls  when  she  saw  fit; 
and,  when  James  was  not  there,  acted  in  case  of  an  emergency.  The 
injury  was  so  serious  that  Miss  McGrath  deemed  prompt  medical 
assistance  advisable.  She  sent  a  boy  for  a  physician,  not  designating 
any  particular  one.  The  boy  called  plaintiff.  He  immediately  re- 
sponded, dressed  the  wound,  and  ordered  her  to  be  taken  home,  saying 
that  he  would  have  to  see  her  again.  She  was  taken  home  in  a 
carriage.  In  the  afternoon  of  the  same  day  she  was  suffering  pain, 
and  sent  a  note  to  a  store  near  by  to  telephone  to  the  laundry.  Some 
one  at  the  laundry  telephoned  to  plaintiff,  and  he  went  to  see  her. 
Defendants  had  no  knowledge  of  this.  Plaintiff  treated  her  at  her 
home  until  she  was  able  to  go  out,  and  then  she  went  to  his  office, 
and  there  received  treatment  until  the  wound  was  healed.  She  was 
under  treatment  for  about  three  months. 

There  was  evidence  that  defendants  had  promised  to  pay  the  bill, 
or  some  portion  of  it. 

Grant,  J.  (after  stating  the  facts).  Had  defendants'  forewoman 
authority  to  bind  them  by  sending  for  plaintiff  to  attend  the  injured 
employee?  She  had  no  general  authority  to  do  so.  If  she  was 
clothed  with  any  authority  to  do  so,  it  must  be  because  an  emergency 
arose  in  which  it  was  the  defendants'  duty  to  have  some  one  to  act  for 
them.  There  are  authorities  which  hold  parties  liable  in  certain 
emergencies  for  the  acts  of  their  managers  or  foremen  in  employing 
physicians.  These  authorities,  however,  go  no  further  than  to  hold 
the  parties  liable  for  the  immediate  services  made  necessary  by  a 
present  urgency.  Authority  to  act  is  implied  from  the  necessity  of 
the  case.  Chaplin  v.  Freeland,  7  Ind.  App.  676  (34  N.  E.  1007) ; 
Terre  Haute,  etc.,  E,  Co.  v.  McMurray,  98  Ind.  358  (49  Am.  Eep. 
752)  ;  St.  Louis,  etc.,  R.  Co.  v.  Hoover,'53  Ark.  377  (13  S.  W.  1092) ; 
Louisville,  etc.,  R.  Co.  v.  Smith,  121  Ind.  353  (22  N.  E.  775,  6  L.  R. 
A,  320)  ;  Arkansas  Southern  R.  Co.  v.  Loughridge,  65  Ark.  300 
(45  S,  W,  907),  Neither  the  authorities  nor  reason  carry  the  rule 
beyond  the  emergency.    Such  employment  does  not  make  the  employer 


CHAP,   v.]      FORMATION   OF  THE   RELATION   BY   NECESSITY.  161 

liable  for  the  services  rendered  by  the  physician  to  the  employee 
after  the  emergency  has  passed.  If  the  physician  desires  to  hold  the 
employer  responsible  for  subsequent  services,  he  must  make  a  special 
contract  with  him. 

The  cases  above  cited,  and  others,  are  those  in  which  the  employ- 
ment is  hazardous,  exposing  the  employees  to  dangers  and  risks 
greater  than  those  in  the  ordinary  pursuits  of  life.  The  ground  for 
such  liability  is  thus  stated  in  Chaplin  v.  Freeland,  supra: 

"  Eailroad  companies  occupy  a  peculiar  position  with  reference  to 
such  matters,  exercising  quasi  public  functions,  clothed  with  extra- 
ordinary privileges,  carrying  their  employees  necessarily  to  places 
remote  from  their  homes,  subjecting  them  to  unusual  hazards  and 
dangers.  The  law  has,  by  reason  of  the  dictates  of  humanity  and  the 
necessities  of  the  occasion,  imposed  upon  such  companies  the  duty  of 
providing  for  the  immediate  and  absolutely  essential  needs  of  injured 
employees,  when  there  is  a  pressing  emergency  calling  for  their  im- 
mediate action.  In  such  cases,  even  subordinate  officers  are  sometimes, 
for  the  time  being,  clothed  with  the  powers  of  the  corporation  itself 
for  the  purposes  of  the  immediate  emergency,  and  no  longer." 

There  is  no  evidence  in  this  case  that  emplo}Tiient  in  a  laundry  is 
accompanied  by  any  such  dangers.  We  may  infer  the  contrary,  as 
no  accident  had  ever  before  occurred  in  the  defendants'  business,  an 
extensive  one.  An  employee  in  a  bank,  store,  or  shop,  or  upon  a 
farm,  may  become  suddenly  very  ill,  or  in  some  way  seriously  in- 
jured, so  that  some  foreman  or  other  employee  might  properly  deem 
immediate  medical  attendance  necessary,  and,  in  the  absence  of  the 
employer,  summon  a  physician.  Is  the  employer  liable?  We  are 
cited  to  no  authority  which  so  holds.  It  is  doubtful  whether  such  an 
employer  would  be  liable  if  he  himself  sent  for  the  physician  to 
attend  one  of  his  employees.  It  is  unnecessary  upon  this  point  to 
express  an  opinion.  We  do  not,  however,  hesitate  to  hold  that,  in 
those  avocations  of  life  unaccompanied  by  dangers,  an  employer  is 
not  liable  for  the  services  of  a  physician  summoned  by  his  manager 
or  foreman  or  other  servant  to  attend  an  employee  in  a  case  of  a 
sudden  illness  or  injury,  whatever  his  moral  obligation  may  be.^  If, 
therefore,  the  plaintiff  had  known  that  Miss  McGrath  summoned  him, 
the  defendants  would  not  be  liable.  He  did  not  know  and  made  no 
inquiries  as  to  who  summoned  him.  He  testified,  "  A  boy  from  their 
office  summoned  me  from  the  laundry."    He  never  informed  defend- 

•  "  We  hare  been  referred  to  no  cases  where  It  has  been  held  to  be  within  the 
duties  of  the  manager  of  a  factory  for  either  an  individual  or  corporation  to  employ 
physicians  or  surgeons  for  employees.  We  are  not,  therefore,  prepared  to  hold  as 
a  matter  of  law  that  the  employment  of  physicians  or  surgeons  for  Injured  employees 
comes  within  the  scope  of  the  duties  of  a  general  manager  of  an  ordinary  manufac- 
turing business.  It  seems  to  us  that  the  rule  that  appellant  seeks  to  have  applied  to 
this  case  Is  confined  exclusively  to  railroad  companies,  and,  generally.  In  cases  which 
Involve  some  act  of  negligence  on  the  part  of  ttie  company  which  occasioned  the  In- 
jury."    Godshaw  v.  3.  N.  Struck  &  Bro.,  109  Ky.  285,  290. 

11 


162  GWILLIAM    V.   TWIST   ET   AL.  [CHAP.   V. 

ants  that  he  was  treating  her,  or  that  he  expected  them  to  pay  him,  or 
presented  a  bill,  until  he  had  ceased  to  treat  her.  He  now  seeks  to 
bind  defendants,  not  only  for  his  own  services,  but  for  the  services  of 
other  physicians  whom  he  employed  to  assist  him  without  their 
knowledge  or  assent.  He  could,  in  no  event,  recover  for  the  services 
of  the  other  physicians.  Mayberry  v.  Eailroad  Co.,  75  Mo.  492. 
We  therefore  hold  that  there  was  no  original  contract. 

There  is  no  evidence  of  ratification.  The  testimony  of  Mr.  Knack 
and  the  attorney,  Mr.  Kissane,  does  not  show  a  ratification.  To 
Mr.  Kissane  defendant  James  denied  liability,  though  willing  to 
pay  for  the  first  visit  at  the  laundry.  As  already  shown,  defendants 
were  not  originally  liable.  The  language  of  Knack  and  Kissane 
imports  no  more  than  the  promise  to  pay  the  debt  of  another,  which 
is  void  under  the  statute  of  frauds. 

Judgment  reversed,  and  new  trial  ordered. 

The  other  Justices  concurred.^ 


GWILLIAM   V.   TWIST   et   al. 

[1895]   1  Q.  B.  557.     [1895]  2  Q.  B.   (C.  A.)   84. 

Action  for  damages  for  injuries  received  through  the  careless 
management  of  defendants'  omnibus.  Judgment  for  plaintiff.  De- 
fendants appeal. 

Defendants'  servant  Harrison,  to  whom  had  been  intrusted  the 

'  *  The  manager  of  a  business  corporation  has  no  authority  to  furnish  medical  aid 
and  assistance  to  a  servant  of  the  corporation  who  has  been  injured  outside  the  line 
of  his  duties.     Chase  v.  Swift  &  Co.,  60  Neb.  696. 

Where  employees  of  a  mining  company,  while  working  in  its  mines,  suffer  bodily 
injury  by  the  explosion  of  a  blast,  and  it  does  not  appear  that  the  company  was  in 
anywise  at  fault,  the  secretary  and  general  manager  of  the  company  has  no  power, 
by  virtue  of  his  oflBce,  to  bind  the  company  by  a  contract  for  medical  attendance  on 
such  Injured  employees.  Quaere,  whether  in  a  case  where  an  employee  is  injured 
through  the  actionable  negligence  of  the  company,  the  general  manager  of  a  mining 
company  can  bind  his  principal  by  such  a  contract.  Spelman  v.  Gold  Coin  Mining, 
etc..  Co.,  26  Mont.  76. 

In  Raney  v.  Weed,  3  Sandf.  (Superior  Ct.  N.  Y.  City)  577,  the  plaintiffs  sued  de- 
fendants to  recover  for  an  advertisement  of  the  sale  of  lands  under  an  execution, 
which  the  plaintiffs  had  published  in  their  newspaper  by  direction  of  the  officer  in 
whose  hands  the  defendants  had  placed  the  execution.  The  evidence  failed  to  show 
any  authority  in  fact  in  the  officer  to  bind  the  defendants,  and  the  court  held  that 
the  law  gave  him  no  such  authority.  "  It  Is  perfectly  just  that  he,  who  employs  an 
agent,  should  be  responsible  for  the  acts,  within  the  scope  of  his  authority,  of  the 
person  whom  he  selects,  trusts,  and  controls ;  but  it  is  not  just  that  any  person 
should  be  responsible  for  the  acts  of  a  public  officer,  whom,  without  regard  to  his 
own  wishes,  the  law  commands,  and  unless  he  choose  to  abandon  his  rights,  compels 
him  to  employ.  It  is  not  just  that  he  should  be  liable  for  the  acts  of  a  person  whom 
he  does  dot  select,  may  not  trust,  and  has  no  power  to  remove.  So  far  as  by  special 
instructions  he  controls  his  discretion,  and  so  far  as  he  participates  In  the  wrongful 
acts  of  the  officer,  he  is  justly  liable,  and  no  further.  .  .  .  The  referee  has  erred  in 
founding  his  report  upon  the  supposition  of  an  existing  privity  between  the  parties, 
which  entitles  plaintiffs  to  maintain  this  action ;  he  has  erred  in  deciding  that  the 
defendants  were  in  any  sense  parties  to  the  contract  upon  which  the  claim  of  the 
plaintiffs  is  founded." 


CHAP,   v.]      FORMATIOISr   OP.  THE  RELATION   BY  NECESSITY.  163 

driving  of  the  omnibus,  was  stopped  by  a  police  officer  for  intoxica- 
tion, and  forbidden  to  drive  the  omnibus  further.  One  Veares 
volunteered  to  drive  the  omnibus  to  defendants'  yard,  which  was  dis- 
tant about  a  quarter  of  a  mile.  Harrison  and  the  conductor  ac- 
quiesced, and  both  remained  in  the  omnibus,  Harrison  shouting 
directions  to  Veares  to  drive  carefully  at  the  corners.  Veares  drove 
negligently  and  injured  plaintiff.  The  county  court  judge  (Judge 
Chalmers)  found  for  the  plaintiff.  An  appeal  was  taken  to  the 
Queen's  Bench  Division. 

[1895]  1  Q.  B.  557. 

Lawrance,  J.  The  question  is  whether  Harrison  and  the  con- 
ductor, by  acquiescing  in  Veares  driving  the  omnibus,  constituted 
Veares  the  servant  of  the  defendants,  so  as  to  render  the  defendants 
liable  for  the  accident  which  happened  while  he  was  so  driving.  The 
judge  held  that,  if  they  had  the  power  to  do  so,  they  must  be  taken 
to  have  authorized  Veares  to  drive  on  the  defendants'  behalf.  Then, 
had  they  the  power  to  do  so  ?  In  the  absence  of  an  express  authority 
in  that  behalf,  is  an  authority  to  employ  Veares  to  be  implied?  I 
think  that,  having  regard  to  the  necessity  which  the  judge  apparently 
found  as  a  fact  to  have  arisen,  such  an  authority  must  be  implied. 
The  judgment  must  therefore  be  affirmed. 

Wright^  J.  This  case  raises  a  very  serious  question  of  law,  upon 
which,  so  far  as  I  am  aware,  there  is  little  or  no  authority.  The  view, 
however,  which  I  take  upon  the  matter  is  this.  I  think  that  in  cases 
of  sudden  emergency  a  servant  has  an  implied  authority  from  his  em- 
ployer to  act  in  good  faith  according  to  the  best  of  his  judgment  for 
that  employer's  interests,  subject  to  this,  that  in  so  doing  he  must 
violate  no  express  limitation  of  his  authority,  and  must  not  act  in  a 
manner  which  is  plainly  unreasonable.  And  in  cases  to  which  this 
doctrine  applies  I  think  the  servant  must  be  regarded  as  not  the  less 
acting  within  the  scope  of  his  emploj^ment  because  his  judgment  hap- 
pens to  be  mistaken  and  wrong.  Of  course  a  servant  cannot  have  any 
implied  authority  to  do  on  behalf  of  his  master  any  act  which  it 
would  be  illegal  for  the  master  to  do  himself;  for  instance,  if  there 
had  been  a  statute  or  by-law  applying  to  those  omnibuses,  making  it 
illegal  to  employ  an  unlicensed  person  to  drive  them,  I  think  the 
defendants'  servants  would  not,  however  great  the  emergency  was, 
have  been  acting  within  the  scope  of  their  employment  in  authorizing 
such  a  person  as  Veares  to  drive  on  their  employers'  behalf.  But  no 
such  illegality  was  shown  here.  Such,  then,  being  my  view  of  the 
legal  doctrine  applicable  to  the  facts  of  this  case,  I  cannot  say  that 
there  was  not  some  evidence  on  which  the  county  court  judge  might 
find  that  such  an  emergency  existed  as  would  bring  the  case  within 
the  limits  of  that  doctrine.  Whether  upon  the  question  of  fact  I 
should  have  arrived  at  the  same  conclusion  is  another  matter;  but  I 


164  GWILLIAM   V.   TWIST   ET   AL.  [CHAP.   7. 

am  of  opinion  that  we  cannot  upon  the  question  of  law  say  that  the 
judgment  was  wrong.  Appeal  dismissed. 

The  defendants  then  appealed  to  the  Court  of  Appeal. 
[64  L.  J.  Q.  B.  474.]» 

Lord  Esher,  M.  E.  This  case  raises  a  question  of  great  impor- 
tance, which,  however,  it  does  not  seem  to  me,  we  have  now  to  decide. 
That  question  is  whether,  where  it  may  become  necessary  for  a  servant 
who  is  intrusted  with  a  particular  duty  to  delegate  that  duty  to  some 
one  else,  that  delegation  makes  that  person  to  whom  the  duty  has  been 
so  delegated  the  servant  of  the  master  so  as  to  render  the  master 
liable  for  his  wrongful  acts.  This  proposition,  however,  is  clear,  — 
namely,  that  a  servant  employed  for  a  particular  purpose  can  have 
no  authority  to  delegate  that  duty  to  any  one  else,  unless  there  is  a 
necessity  that  he  should  do  so.  The  servant  cannot  delegate  unless 
there  is  a  necessity  to  do  so.  The  question  here  is  whether  there  was 
any  evidence  upon  which  the  county  court  judge  could  reasonably  find 
that  there  was  a  necessity  for  the  driver  of  the  defendants'  omnibus 
to  delegate  his  duty  to  Veares.  First  of  all,  I  do  not  think  that  the 
county  court  judge  did  find,  as  a  fact,  that  there  was  any  such  neces- 
sity; but  afterwards,  when  he  delivered  judgment,  he  did  seem  to 
assume  that,  upon  the  facts  of  the  case,  such  a  necessity  did  arise. 
The  question,  therefore,  is  whether  the  servant  had  any  right  to 
delegate  his  duty  without  first  consulting  his  master,  for,  if  he  had 
an  opportunity  to  do  so,  no  question  of  necessity  could  arise.  Here 
the  driver  became  incapable  of  driving  the  omnibus ;  such  incapacity 
being  the  result  of  an  order  given  by  the  police  forbidding  him  to  drive 
it.  It  is  obvious  that  the  omnibus,  which  was  only  about  a  quarter 
of  a  mile  from  the  defendants'  yard,  might  have  been  left  standing 
in  reasonable  safety  where  it  was,  and  the  horses  might  have  been 
watched,  while  the  defendants'  servants  communicated  with  their 
masters  for  directions  as  to  what  was  to  be  done.  The  moment  that 
was  clear,  the  county  court  judge  would  have  been  bound  to  tell  the 
jury  that  no  case  of  necessity  had  been  made  out  for  the  driver  dele- 
gating his  duty  without  first  communicating  with  his  masters.  There 
was  no  evidence  upon  which  he  could  reasonably  say  that  there  was 
any  necessity  on  the  part  of  the  driver  to  delegate  his  duty  to  Veares 
so  as  to  make  the  defendants  liable  by  reason  of  Veares  being  their 
servant  for  this  purpose.  I  agree  with  the  remarks  of  Mr.  Baron 
Parke  in  Hawtayne  v.  Bourne,  7  M.  &  W.  595,  and  of  Chief  Justice 
Eyre  in  Nicholson  v.  Chapman,  2  H.  Black.  254,  that  the  delegation 
of  duty  by  reason  of  necessity  is  confined  to  certain  well-known  cases 
—  as,  for  instance,  in  the  cases  of  the  master  of  a  ship,  or  of  an  ac- 
ceptor of  a  bill  of  exchange  for  the  honor  of  the  drawer,  or  of  salvage ; 

»   [1895]    2  Q.   B.    (C.   A.)    84. 


CHAP,   v.]      FORMATION   OF  THE   RELATION   BY   NECESSITY.  165 

but  those  are  cases  which  are  excepted,  some  by  the  law  of  nations,  and 
some  by  the  law  of  this  country.  The  appeal  must  therefore  be 
allowed. 

Smith,  L.  J.  I  am  of  the  same  opinion  ...  It  is,  however,  said 
that  such  circumstances  may  arise  that  the  coachman  is  constituted  an 
agent  of  his  master  by  necessity.  That  may  be  so,  but  the  agent  must 
be  placed  in  such  a  position  that  he  has  to  act  upon  Ms  own  responsi- 
bility and  common  sense  when  he  is  not  able  to  communicate  with 
his  principal.  A  resume  of  the  cases  which  show  what  constitutes  an 
agent  of  necessity  in  the  case  of  goods  carried  on  board  ship,  will  be 
found  in  Carver's  Carriage  by  Sea,  where  it  is  said,  in  section  299, 
that,  "  If  there  is  a  fair  expectation  of  obtaining  directions,  either 
from  the  owners  of  the  goods  or  from  agents  known  by  the  master 
to  have  authority  to  deal  with  the  goods,  within  such  a  time  as  would 
not  be  imprudent,  the  master  must  make  every  reasonable  endeavor  to 
get  those  directions ;  and  his  authority  to  sell  does  not  arise  until  he 
has  failed  to  get  them,"  —  that  is  to  say,  that  until  he  has  made  that 
endeavor  and  failed,  he  does  not  become  an  agent  of  necessity.  I 
adopt  the  words  of  the  passage  which  I  have  read.  It  is  true  that 
when  the  county  court  judge  gave  his  findings  here  on  the  questions  of 
fact  in  the  first  instance,  he  did  not  deal  with  the  question  whether  a 
case  of  necessity  arose;  but  when  he  delivered  judgment,  after  fur- 
ther consideration,  he  said  that  it  was  clearly  necessary  that  some  one 
should  drive  the  omnibus  home.  It  appears  to  me,  however,  that  that 
did  not  make  Harrison  an  agent  of  necessity  within  the  law  appli- 
cable to  such  a  question.  It  is  impossible,  upon  the  admitted  facts  of 
the  case,  to  say  that  there  was  evidence  that  Harrison  was,  under  the 
circumstances  of  the  case,  an  agent  of  necessity.  The  omnibus  was 
within  a  quarter  of  a  mile  of  his  masters'  yard,  and  it  is  obvious  that 
he  had  an  opportunity  of  communicating  with  them.  Upon  these 
grounds,  I  think  that  Harrison  was  not  acting  within  the  scope  of  his 
authority  when  he  permitted  Veares  to  drive  the  omnibus  home, 
and  consequently  the  defendants  are  not  liable  for  the  injuries  caused 
by  Veares'  negligence. 

RiGBY,  L.  J.  I  am  of  the  same  opinion.  The  county  court  judge 
here  found  certain  facts,  and  reserved  the  question  of  law.  I  should  be 
inclined  to  say  that  in  his  judgment  he  assumes  there  was  a  necessity 
from  the  facts  found.  I  think  there  was  no  evidence  here  of  such  a 
necessity  as  is  required  by  law  to  justify  Harrison  in  placing  Veares 
in  the  position  of  driver,  and  by  so  doing  make  the  defendants  liable 
for  his  negligence.  I  do  not  think  any  of  the  cases  even  point  to  such 
a  liability  unless  there  be  such  a  necessity ;  and,  for  the  reasons  that 
have  been  given,  I  do  not  think  there  is  any  evidence  of  such  neces- 
sity in  this  case.  Appeal  allowed. 


166  BO  WE,   TRUSTEE  v.   RA.ND,   RECEIVER.  [CHAP.   71. 


CHAPTER   VI. 
Termination  of  the  Agenct. 

1.  By  Accomplishment  of  Purpose. 
EOWE,  Trustee  v.  RAND,  Receiveb. 

Ill  Ind.  206.     1887. 

Intervening  petition  by  Eowe,  designating  himself  "trustee," 
against  Rand,  as  receiver  of  the  Indiana  Banking  Co.,  praying  that  an 
allowance  be  made  in  his  favor  for  funds  deposited  in  the  bank  by 
him  as  " trustee."  Defence:  (1)  denial;  (2)  payment;  (3)  release. 
Judgment  for  defendant.    Petitioner  appeals. 

Rowe  was  intrusted  with  certain  property  belonging  jointly  to  the 
First  N.  B.  (No.  55)  and  the  Indiana  Banking  Co.,  with  instructions 
to  sell  it  and  divide  the  proceeds  between  the  two  companies  in  a 
given  proportion.  '  Rowe  sold  the  property  and,  with  the  consent  of 
both  companies,  deposited  the  proceeds  to  his  own  credit,  under  the 
name  of  "  William  Eowe,  trustee,"  in  the  bank  of  the  Indiana  Bank- 
ing Co.  He  used  this  designation  because  he  already  had  accounts 
there  in  his  individual  name,  in  his  name  as  "  agent,"  and  in  his 
name  as  "receiver."  Later  the  First  N.  B.  (No.  55)  was  replaced 
by  a  new  organization  known  as  the  First  N.  B.  (No.  2556)  which 
succeeded  to  the  assets  and  business  of  the  former  bank.  Later  still 
the  Indiana  Banking  Co.  became  insolvent,  and  defendant  Rand  was 
appointed  receiver.  The  insolvent  company  owed  the  two  national 
bank  organizations  a  large  sum  of  money,  and  there  was  an  additional 
claim  which  was  contested.  The  representatives  of  the  three  organ- 
izations met,  before  the  appointment  of  the  receiver,  adjusted  their 
claims  and  signed  mutual  releases. 

Notwithstanding  this  settlement  Rowe  claimed  the  right  to  recover 
the  amount  deposited  by  him  in  his  name  as  trustee. 

NiBLACK,  J.  ...  A  trustee  is  one  to  whom  an  estate  has  been  con- 
veyed in  trust,  and,  consequently,  the  holding  of  property  in  trust  con- 
stitutes a  person  a  trustee.  An  agent  is  one  who  acts  for,  or  in  place 
of,  another,  denominated  the  principal,  in  virtue  of  power  or  author- 
ity conferred  by  the  latter,  to  whom  an  account  must  be  rendered. 
In  the  case  of  an  ordinary  agency  for  the  sale  or  disposition  of  prop- 
erty, the  title  to  the  property,  as  well  as  to  the  proceeds,  remains  in 
the  principal.    Such  an  agency  may  be  revoked  at  any  time,  in  the 


CHAP.   VI.]  BY   ACCOMPLISHMENT   OF   PURPOSE.  167 

discretion  of  the  principal.  It  may,  also,  be  in  like  maimer  termi- 
nated by  the  renunciation  of  the  agent,  he  being  liable  only  for  the 
damages  which  may  result  to  the  principal.  An  agency  may  also  be, 
and  is,  revoked  by  operation  of  law  in  certain  cases,  among  which  are 
the  bankruptcy  of  the  principal,  the  extinction  of  the  subject-matter 
of  the  agency,  the  loss  of  the  principal's  power  over  such  subject- 
matter,  or  the  complete  execution  of  the  business  for  which  the  agency 
was  created;  also,  where  the  changed  condition  becomes  such  as  to 
produce  an  incapacity  in  either  party  to  proceed  with  the  business 
of  the  agency.  Where  a  power  or  authority  to  act  as  agents  is  con- 
ferred on  two  persons,  the  death  of  one  of  them  terminates  the  agency. 
So,  where  two  persons  are  jointly  appointed  agents  to  take  charge  of 
a  particular  business  for  a  specified  term  or  purpose,  and  one  of  them 
becomes  incapacitated  before  the  term  is  completed  or  the  purpose  is 
accomplished,  the  other  cannot  proceed  alone  without  the  consent  of 
the  principal,  and  hence  the  agency  is  thereby  in  effect  revoked. 
Abbott's  and  Bouvier's  Law  Dictionaries,  titles  "  Agent,"  and 
"Agency";  1  Wait,  Actions  and  Defences,  289;  1  Parsons  on  Cont. 
39,  et  seq. ;  Story  on  Agency,  sees.  38,  42,  474,  499. 

The  inevitable  inference  from  these  legal  propositions  is,  that  when 
two  principals  jointly  appoint  an  agent  to  take  charge  of  some  matter 
in  which  they  are  jointly  interested,  and  a  severance  of  their  joint 
interest  afterwards  occurs,  the  severance  revokes  the  agency. 

An  agent  may  sue  in  his  own  name :  First.  When  the  contract  is 
in  writing,  and  is  expressly  made  with  him,  although  he  may  have 
been  known  to  act  as  agent.  Secondly.  When  the  agent  is  the  only 
known  or  ostensible  principal,  and  is,  therefore,  in  contemplation  of 
law,  the  real  contracting  party.  Thirdly.  When  by  the  usage  of 
trade  he  is  authorized  to  act  as  owner,  or  as  a  principal  contracting 
party,  notwithstanding  his  well  known  position  as  agent  only.  But 
this  right  of  an  agent  to  bring  an  action,  in  certain  cases,  in  his  own 
name  is  subordinate  to  the  rights  of  the  principal,  who  may,  unless 
in  particular  cases,  where  the  agent  has  a  lien  or  some  other  vested 
right,  bring  suit  himself,  and  thus  suspend  or  extinguish  the  right  of 
the  agent. 

-  Applying  the  general  principles  thus  announced  to  the  facts  herein- 
above stated,  our  conclusions  are,  that  Rowe  became  an  agent  only, 
and  hence  not  a  trustee,  for  the  sale  of  the  property  left  with  him 
by  the  banks ;  that  he  acquired  no  lien  either  upon  the  property  or 
its  proceeds  which  would  have  prevented  the  national  banks,  or  either 
one  of  them,  as  the  situation  might  have  authorized  at  the  time,  from 
revoking  Rowe's  authority  as  their  agent,  and  demanding  an  account- 
ing from  the  banking  company  as  to  the  money  deposited  with  it  by 
him,  or  from  demanding  such  an  accounting  without  revoking  Rowe's 
agency;  that,  consequently,  the  money  so  deposited  constituted  a 
fund  upon  which  the  national  banks  might  have  based  a  claim  against 


168  BEOOKSHIRE  V.   BROOKSHIRE.         [CHAP.  VI. 

the  banking  company  when  the  agreement  was  mutually  entered  into 
on  the  tenth  day  of  August,  1883,  and  that,  if,  in  fact,  all  claim 
against  that  fund  was  released  by  the  agreement  of  that  date,  the 
agency  of  Rowe  in  all  matters  concerning  the  fund  was  thereby  re- 
voked, leaving  him  in  a  position  to  demand  only  an  accounting  for 
his  services  and  expenses. 

(The  court  further  holds  that  the  mutual  releases  must  be  con- 
strued to  include  all  claims  of  every  kind  held  by  the  national  banks 
against  the  banking  company.) 

Judgment  affirmed. 


2.    By  Revocation. 
BEOOKSHIRE   v.   BROOKSHIRE. 

8  Ired.  Law  (N.  C.)  74.     1847. 

Assumpsit  to  recover  expenses  and  commissions  as  agent.  Judg- 
ment for  plaintiff  for  expenses  only.    Both  parties  appeal. 

Plaintiff's  authority  was  by  deed.  Defendant  revoked  the  author- 
ity by  parol.  The  expenses  were  incurred  in  part  after  such  parol 
revocation.  The  court  charged  that  if  there  was  a  parol  revocation, 
plaintiff  could  recover  for  expenses  and  services  up  to  the  time  of 
the  revocation,  but  not  after.  The  verdict  was  for  expenses  up  to 
the  time  of  the  revocation. 

Nash,  J.  It  is  not  denied  by  the  plaintiff,  that,  in  this  case,  it 
was  within  the  power  of  the  defendant  to  put  an  end  to  his  agency, 
by  revoking  his  authority.  Indeed,  this  is  a  doctrine  so  consonant 
with  justice  and  common  sense  that  it  requires  no  reasoning  to  prove 
it.  But  he  contends  that  it  is  a  maxim  of  the  common  law  that 
every  instrument  must  be  revoked  by  one  of  equal  dignity.  It  is  true 
an  instrument  under  seal  cannot  be  released  or  discharged  by  an 
instrument  not  under  seal  or  by  parol;  but  we  do  not  consider  the 
rule  as  applicable  to  the  revocation  of  powers  of  attorney,  especially 
to  such  an  one  as  we  are  now  considering.  The  authority  of  an  agent 
is  conferred  at  the  mere  will  of  his  principal,  and  is  to  be  executed 
for  his  benefit;  the  principal,  therefore,  has  the  right  to  put  an  end 
to  the  agency  whenever  he  pleases,  and  the  agent  has  no  right  to 
insist  upon  acting,  when  the  confidence  at  first  reposed  in  him  is 
withdrawn.  In  this  case  it  was  not  necessary  to  enable  the  plaintiff 
to  execute  his  agency,  that  his  power  should  be  under  seal;  one  by 
parol,  or  by  writing  of  any  kind,  would  have  been  sufficient;  it  cer- 
tainly cannot  require  more  form  to  revoke  the  power  than  to  create 
it.  Mr.  Story,  in  his  treatise  on  Agency,  page  606,  lays  it  down  that 
the  revocation  of  a  power  may  be,  by  a  direct  and  formal  declaration 


CHAP.   VI.]  BY  BEVOCATION.  16^ 

publicly  made  known,  or  by  an  informal  writing,  or  by  parol ;  or  it 
may  be  implied  from  circumstances,  and  he  nowhere  intimates,  nor 
do  any  of  the  authorities  we  have  looked  into,  that  when  the  power 
is  created  by  deed,  it  must  be  revoked  by  deed.  And,  as  was  before 
remarked,  the  nature  of  the  connection  between  the  principal  and  the 
agent  seems  to  be  at  war  with  such  a  principle.  It  is  stated,  by  Mr. 
Story,  in  the  same  page,  that  an  agency  may  be  revoked  by  implica- 
tion, and  all  the  text-writers  lay  down  the  same  doctrine.  Thus,  if 
another  agent  is  appointed  to  execute  powers,  previously  intrusted 
to  some  other  person,  it  is  a  revocation,  in  general,  of  the  power  of 
the  latter.  For  this  proposition  Mr.  Story  cites  Copeland  v.  The 
Marine  Insurance  Company,  6  Pick.  198.  In  that  case,  it  was 
decided  that  a  power,  given  to  one  Pedrick  to  sell  the  interest  of  his 
principal  in  a  vessel,  was  revoked  by  a  subsequent  letter  of  instruction 
to  him  and  the  master,  to  sell.  As  then,  an  agent  may  be  appointed 
by  parol,  and  as  the  appointment  of  a  subsequent  agent  supersedes 
and  revokes  the  powers  previously  granted  to  another,  it  follows  that 
the  power  of  the  latter,  though  created  by  deed,  may  be  revoked  by 
the  principal,  by  parol.  But  the  case  in  Pickering  goes  further.  The 
case  does  not  state,  in  so  many  words,  that  the  power  granted  to 
Pedrick  was  under  seal,  but  the  facts  set  forth  in  the  case  show  that 
was  the  fact,  and,  if  so,  it  is  a  direct  authority  in  this  case.  This  is 
the  only  point  raised,  in  the  plaintiff's  bill  of  exceptions,  as  to  the 
judge's  charge. 

(The  court  then  decides  against  the  defendant  upon  his  appeal  on 
a  question  of  costs  and  of  practice.) 

Pee  Curiam.  Judgment  affirmed,  on  each  appeal,  and  each  appel- 
lant must  pay  the  costs  of  his  appeal. 


\ 


DA  VOL   V.    QUIMBY. 

11  Allen  (Mass.)  208.     1865. 

Contract,  to  recover  wages.  The  defence  was  pa3nnent  to  the 
plaintiff's  agent ;  whose  agency  was  denied  by  the  plaintiff. 

Plaintiff  authorized  one  Howe  to  collect  a  debt  due  plaintiff  from 
defendant.  Afterward  plaintiff  authorized  an  attorney  to  collect  the 
debt,  and  the  attorney  demanded  it  of  defendant.  After  this  the  de- 
fendant paid  the  money  to  Howe.  Plaintiff  did  not  notify  Howe  of 
any  withdrawal  of  his  authority. 

The  plaintiff's  counsel  requested  the  court  to  instruct  the  jury 
that  if  the  defendant  had  notice  to  pay  the  attorney  of  the  plaintiff, 
he  could  not  be  justified  in  paying  the  money  to  Howe  after  such 
notice  from  the  plaintiff,  and  if  he  did  so  he  did  it  at  his  own  risk, 
and  did  not  discharge  himself  from  liability  to  the  plaintiff.  The 


170  WALKER  V.  BABRINGTON.  [CHAP.  VI. 

judge  refused  so  to  rule,  and  the  jury  returned  a  verdict  for  the 
defendant;  and  the  plaintiff  alleged  exceptions. 

BiGELOW,  C.  J.  The  instruction  asked  for  by  the  defendant  was 
rightly  refused.  It  appeared  distinctly  from  the  evidence  that  the 
plaintiff  authorized  Howe  to  receive  the  money  from  the  defendant; 
but  it  was  not  shown  that  this  authority  v^as  subsequently  revoked. 
The  mere  fact  that  the  plaintiff  also  authorized  another  person  to 
receive  the  same  money  did  not  prove  a  revocation.  There  may  be 
two  persons  appointed  to  exercise  the  same  power  as  agents  for  a 
principal.  If  there  is  nothing  in  the  nature  of  the  agency  to  render 
an  authority  in  one  person  inconsistent  with  a  like  authority  in  an- 
other, both  may  well  be  authorized,  and  the  acts  of  either  or  both, 
within  the  scope  of  the  agency,  will  be  valid  and  binding  on  the 
principal.  So  it  was  in  the  case  at  bar.  The  defendant  paid  to  one 
agent  of  whose  authority  he  had  had  notice.  This  authority  was  not 
revoked  by  the  notice  given  to  the  defendant  that  the  plaintiff  had 
also  appointed  another  agent  with  similar  authority.  There  was  no 
other  evidence  of  revocation. 

Exceptions  overruled.^ 


WALKER   v.   BAREINGTON. 

28  Vt.  781.     1856. 

.  Book  Account.  In  the  plaintiff's  account  were  charges  which  were 
allowed  in  his  favor,  for  a  shoat,  and  for  a  quantity  of  coal  sold  to 
the  defendant.  Items  17  and  18,  in  the  defendant's  account,  were 
*'  for  cash  for  pig,  paid  to  Wilbur  Barrington,"  and  "  for  cash  for 
coal,  paid  to  the  same,"  which  the  auditor  disallowed,  subject  to  the 
opinion  of  the  court  upon  the  following  facts. 

At  the  time  the  plaintiff  let  the  defendant  have  the  shoat  and  coal, 
the  defendant  was  to  pay  for  the  same  to  his  father  Wilbur  Barring- 
ton,  and  so  offered  to  do;  but  said  Wilbur  refused  to  receive  it,  for 
the  reason  that  he  thought  it  would  affect  certain  contracts  between 
him  and  the  plaintiff.  Said  sums  were  not  paid  by  said  defendant  to 
his  father  until  the  15th  day  of  December,  1855,  which  was  after  the 
commencement  of  this  suit.  The  balance  reported  in  the  plaintiff's 
favor  was  five  dollars  and  seventy-nine  cents.  The  items  17  and  18, 
in  the  defendant's  account,  amounted  to  thirteen  dollars  and  thirty- 
nine  cents. 

The  county  court,  January  Term,  1856,  —  Poland,  J.,  presiding, 
—  rendered  judgment  on  the  report  for  the  plaintiff  for  the  above 
balance  reported  in  his  favor.    Exceptions  by  the  defendant. 

*  Contra:  Williamson  v.  Richardson,  30  Fed.  Cas.  17. 


CHAP.   VI.]  BY   REVOCATION.  171 

The  opinion  of  the  court  was  delivered  by 

Bennett,  J.  The  only  dispute  in  this  case  is  in  relation  to  items 
17  and  18  in  the  defendant's  account.  If  the  defendant  is  not  en- 
titled to  recover  for  these  items,  the  balance  on  the  accounts,  as  al- 
lowed, is  for  the  plaintiff.  The  auditor  finds  that  at  the  time  the 
plaintiff  let  the  defendant  have  the  shoat  and  the  coal,  it  was  agreed 
that  the  defendant  was  to  pay  the  amount  for  the  same  to  the  father 
of  the  defendant;  and  that  the  defendant  offered  to  pay  his  father, 
but  he  at  first  declined  to  receive  the  pay,  for  reasons  assigned  in  the 
report ;  but  the  case  finds,  as  we  understand  it,_  that  he  did  pay  his 
father  the  two  items,  on  the  15th  day  of  December,  1855,  which  was 
after  the  suit  was  commenced,  but  before  the  audit.  It  being  a  part 
of  the  agreement,  when  the  shoat  and  coal  were  sold  to  the  defendant, 
that  payment  should  be  made  for  the  same  to  the  father  of  the  de- 
fendant, it  may  well  be  questioned  whether  it  was  competent  for  the 
plaintiff  to  countermand  the  authority  to  pay  the  amount  to  the 
father.  But  be  this  as  it  may,  it  is  quite  clear,  we  think,  that  the 
bringing  of  this  suit  is  not,  per  se,  a  revocation  of  the  authority; 
and  there  is  nothing  else  in  the  case  to  ground  such  a  claim  upon. 
There  were  running  accounts  between  these  two  parties,  which  the 
action  was  brought  to  settle ;  and  the  auditor  has  not  found  any  rev- 
ocation, in  fact,  of  the  authority  to  make  payment  for  these  items 
to  the  father. 

We  think,  then,  the  judgment  of  the  county  court  should  be  re- 
versed, and  judgment  be  rendered,  on  the  report,  for  the  defendant, 
allowing  to  him  items  17  and  18,  in  his  account. 


AHERK   V.   BAKER. 

34  Minn.  98.     1885. 

Action  for  damages  for  refusal  to  perform  a  contract  to  sell  land. 
Answer,  revocation  of  authority  of  agent  who  concluded  the  sale. 
Demurrer  to  answer  overruled. 

Vanderburgh,  J.  The  defendant,  on  the  ninth  day  of  September, 
1884,  specially  authorized  one  Wheeler,  as  his  agent,  to  sell  the  .real 
property  in  controversy,  and  to  execute  a  contract  for  the  sale  of  the 
same.  He  in  like  manner  on  the  same  day  empowered  one  Fairchild 
to  sell  the  same  land,  the  authority  of  the  agent  in  each  instance  being 
limited  to  the  particular  transaction  named.  On  the  same  day 
Wheeler  effected  a  sale  of  the  land,  which  was  consummated  by  a 
conveyance.  Subsequently,  on  the  tenth  day  of  September,  Fairchild, 
as  agent  for  defendant,  and  having  no  notice  of  the  previous  sale 
made  by  Wheeler,  also  contracted  to  sell  the  same  land  to  this  plain- 


172  BRADISH    V.   BELKNAP   ET   AL.  [CHAP.    VI. 

tiff,  who,  upon  defendant's  refusal  to  perform  on  his  part,  brings 
this  action  for  damages  for  breach  of  the  contract.     ^ 

This  is  a  case  of  special  agency,  and  there  is  nothing  in  the  case 
going  to  show  that  the  plaintiff  would  be  estopped  from  setting  up  a 
revocation  of  the  agency  prior  to  the  sale  by  Fairchild.  A  revocation 
may  be  shown  by  the  death  of  the  principal,  the  destruction  of  the 
subject-matter,  or  the  determination  of  his  estate  by  a  sale,  as  well  as 
by  express  notice.  The  plaintiff  had  a  right  to  employ  several  agents, 
and  the  act  of  one  in  making  a  sale  would  preclude  the  others  with- 
out any  notice,  unless  the  nature  of  his  contract  with  them  required 
it.  In  dealing  with  the  agent  the  plaintiff  took  the  risk  of  the  revo- 
cation of  his  agency.    1  Parsons  on  Cont.  71. 

Order  affirmed,  and  case  remanded. 


BEADISH   V.   BELKNAP   et   al. 

41  Vt.  172.     1868. 

Action  on  book  account.  Judgment  for  plaintiff  on  the  special 
report  of  the  auditor.    Exceptions  by  defendants. 

PiERPONT,  C.  J.  The  report  in  this  case  shows  that,  for  a  long 
period  prior  and  up  to  1863,  one  Brockway  was  the  agent  of  the  de- 
fendants in  taking  stoves  about  the  country,  and  selling  them  as  he 
could  find  purchasers.  This  fact  was  generally  known,  and  was  well 
known  to  the  plaintiff.  In  1863  Brockway  and  the  defendants 
changed  their  arrangement,  and  Brockway  ceased  to  be  their  agent  in 
fact;  but  he  continued  the  business  of  selling  stoves,  which  he  took 
of  the  defendants  as  before.  It  does  not  appear  that  this  new  ar- 
rangement was  known  to  any  one  except  Brockway  and  the  defend- 
ants. No  public  notice  was  given  of  the  fact.  Brockway  continued 
to  hold  himself  out  to  the  world  as  the  agent  of  the  defendants  in 
the  business,  and  was  in  the  habit  of  taking  notes  for  stoves  sold, 
payable  to  the  defendants ;  and  this  was  known  to  the  defendants. 

While  the  business  was  being  so  conducted,  the  plaintiff,  believing 
Brockway  to  be  the  agent  of  the  defendants,  proposed  to  Broctway 
to  buy  a  stove  of  him  and  pay  in  pine  lumber.  Brockway  said 
he  was  selling  the  stoves  for  the  defendants,  and,  if  they  wanted 
the  lumber,  he  would  take  it  and  let  him  have  the  stove.  Afterward 
Edson,  one  of  the  defendants,  went  to  the  plaintiff's,  looked  at  the 
lumber,  ascertained  the  price,  and  said  it  would  answer  their  pur- 
pose. Afterward  Edson  went  to  the  plaintiff's,  and  measured  out  a 
part  of  the  lumber,  and  laid  it  by  itself,  and  the  plaintiff  and  Brock- 
way subsequently  measured  out  the  remainder  of  the  lumber  charged, 
and  the  defendants  and  Brockway  drew  it  away,  and  the  defendants 
converted  it  to  their  own  use.    The  plaintiff  charged  the  lumber  to 


CHAP.    VI.]  BY    REVOCATION.  173 

the  defendants,  and  took  the  stove,  giving  the  defendants  credit  for 
it  against  the  lumber. 

Brockway  during  all  this  time  was  perfectly  poor  and  irrespon- 
sible, and  this  fact  was  known  by  both  parties.  Brockway  repre- 
sented himself  as  the  agent  of  the  defendants,  and  the  conduct  of 
the  defendants  was  such  as  to  justify  the  plaintiff  in  regarding  them 
as  the  principals;  and  we  can  hardly  conceive  it  possible  under  the 
circumstances,  that  the  defendants  did  not  understand  that  the 
plaintiff  so  regarded  them.  And  to  allow  them  now  to  deny  the 
agency  and  thus  defeat  the  plaintiff's  right  to  recover  for  the  bal- 
ance of  the  lumber,  would  be  permitting  them  to  perpetrate  a 
palpable  fraud  on  the  plaintiff. 

Judgment  of  the  county  court  is  affirmed. 


BARKLEY  v.  RENSSELAER  and  SARATOGA  R.   CO. 
71  N.  Y.  205.     1877. 

This  action  was  brought  to  recover  a  balance  alleged  to  be  due 
on  the  sale  of  a  quantity  of  wood. 

In  1870,  one  Rising,  plaintiff's  assignor,  and  one  Wilson,  who 
was  the  wood  measurer  of  the  defendant  authorized  to  purchase, 
measure  and  accept  wood  for  it,  entered  into  a  parol  agreement  by 
which  Rising  agreed  to  sell  and  deliver  to  defendant  2,000  cords 
of  wood  at  $4.50  per  cord,  to  be  delivered  at  Rupert.  During  the 
year  1871  a  portion  of  the  wood  was  delivered,  accepted  by  Wilson, 
and  paid  for  by  defendant.  In  May,  1871,  defendant  leased  its 
road  to  the  Delaware  &  Hudson  Canal  Company,  which  company 
thereafter  operated  it,  and  Wilson  thereupon  became,  and  thereafter 
acted,  as  the  wood  measurer  of  said  lessee;  and  defendant's  super- 
intendent and  employees  continued  to  occupy  their  respective  posi- 
tions. Rising,  without  notice  or  knowledge  of  this  change,  continued 
to  deliver,  and  did  deliver,  during  1871,  1,232  cords  of  wood,  which 
were  measured  and  accepted  by  Wilson.  Rising,  after  the  wood  was 
delivered  and  accepted,  received  from  the  Delaware  &  Hudson  Canal 
Company  $4  per  cord  for  the  wood  so  delivered.  An  account  of  the 
wood,  with  a  receipt  at  the  foot  in  full  of  the  account,  was  presented 
to  Rising  by  the  station  agent  at  the  time  of  the  pa}Tnent,  and  he 
was  required  to  sign  the  receipt  as  a  voucher.  The  bill  was  headed 
*'  The  Delaware  &  Hudson  Canal  Company,  Rensselaer  &  Saratoga 
Railroad  Department,  to  Seth  Rising,  Dr." 

The  referee  directed  a  verdict  for  the  balance  unpaid,  —  i.  e. 
fifty  cents  per  cord,  with  interest. 

Per  Curiam.  It  is  conceded  that  Wilson  was  authorized  by  the 
defendant  to  make  the  contract  with  Rising  for  the  purchase  of  the 


174  BARKLET   V.   RENSSELAER   &   SARATOGA   R.    CO.      [CHAP.   VI. 

2jOOO  cords  of  wood.  By  the  contract,  which  was  verbal,  Rising 
was  to  deliver  the  wood  at  the  defendant's  yard  at  Eupert,  subject 
to  inspection  and  measurement  by  the  defendant;  and  a  portion  of 
the  wood  was  to  be  delivered  more  than  a  year  after  the  contract 
was  made.  The  contract  for  this  reason  was  void  by  the  statute  of 
frauds.  But  Rising  delivered  the  wood  at  the  place  fixed  by  the 
contract,  and  if  the  defendant  accepted  it,  it  was  bound  to  pay  for 
it  at  the  contract-price.  The  vendor  delivered  a  portion  of  the 
wood  prior  to  May,  1871,  which  was  inspected  and  measured  by 
Wilson,  the  wood-buyer  and  measurer  of  the  defendant,  and  paid 
for  by  the  defendant.  The  balance  of  the  wood,  about  1,232  cords, 
was  delivered  subsequently  and  prior  to  January,  1872,  after  the 
defendant  had  leased  its  road  to  the  Delaware  &  Hudson  Canal 
Company.     It  was  inspected,  measured,  and  accepted  by  Wilson. 

The  referee  finds  that  the  plaintiff  had  no  notice  of  the  lease, 
or  that  the  agency  of  Wilson  for  the  defendant  had  terminated, 
until  after  all  the  wood  was  delivered. 

There  was  no  change  of  employees  on  the  road,  and  it  was  man- 
aged and  operated  after  the  lease  apparently  as  it  had  been  before. 
Under  these  circumstances,  the  acceptance  of  Wilson  bound  the  de- 
fendant. Rising  had  a  right  to  assume  that  his  agency  for  the 
defendant  continued  until  he  had  notice  to  the  contrary,  and  that 
in  accepting  the  wood,  Wilson  was  acting  for  the  defendant.  Wil- 
son, before  the  lease,  had  authority  to  receive  wood  on  the  con- 
tract, notwithstanding  it  was  void;  and,  as  to  Rising,  the  authority 
continued  until  he  had  notice  of  Wilson's  change  of  relation  to 
the  defendant. 

Upon  the  findings  and  evidence,  the  averment  that  the  wood  was 
delivered  to  the  defendant  is  established,  and  the  right  of  the  plain- 
tiff to  recover  the  contract-price  became  perfect  as  soon  as  it  was 
measured  and  accepted  by  Wilson. 

The  fact  that  Rising  subsequently  accepted  part  payment  for 
the  1,232  cords  from  the  Delaware  &  Hudson  Canal  Company,  did 
not  discharge  the  defendant  from  its  liability  to  pay  the  balance 
of  the  purchase-price.  There  was  no  agreement  by  Rising  to  accept 
the  Delaware  &  Hudson  Canal  Company  as  his  debtor  in  place  of 
the  defendant. 

The  form  of  the  receipt  given  for  the  money  received  from  that 
company  did  not  conclude  the  plaintiff  from  claiming  that  the  wood 
was  sold  to,  and  accepted  by,  the  defendant.  It  was  taken  as  a 
voucher  for  the  money  paid,  and  for  no  other  purpose.  It  certainly 
was  not  conclusive  evidence  that  the  wood  mentioned  in  the  receipts 
was  sold  to  the  Delaware  &  Hudson  Canal  Company. 

The  judgment  should  be  affirmed. 

All  concur,  except  Folger  and  Miller,  JJ.,  absent. 

Judgment  affirmed. 


CHAP.   VI. J  OPERATION   OF   LAW.  175 

3.     Operation  of  Law. 
COX   V.   BOWLING. 

54  Mo.  App.  289.     1893. 

Gill,  J.  This  is  a  suit  for  commissions  for  sale  of  real  estate. 
Plaintiff  had  judgment  below,  and  defendant  appealed.  The  ma- 
terial facts  are  about  as  follows:  Bowling  owned  a  house  and  lot 
in  Lamar,  Missouri,  which  he  desired  to  sell.  He  agreed  with  Cox, 
an  agent,  that  if  he,  Cox,  would  find  a  purchaser  for  the  house  and 
lot  at  the  price  of  $2,500  he  would  allow  him  $100  as  commissions. 
Cox  entered  into  negotiations  with  one  Snyder,  a  resident  of  Lamar, 
and  made  an  effort  to  sell  the  property  to  Snyder  at  the  fixed  price 
of  $2,500.  Snyder  refused  to  give  that  sum  and  offered  to  purchase 
at  a  less  amount,  which  Bowling  then  declined.  Cox  made  repeated 
efforts  to  get  the  parties  together,  but  to  no  purpose,  and  the  negoti- 
ations then  ceased.  A  short  time  thereafter  the  building  on  the  lot 
was  destroyed  by  fire.  A  few  days  after  the  fire  Bowling  and  Snyder 
met  on  the  street,  and  after  a  brief  interview  Bowling  sold  the  lot 
(then  vacant)   to  Snyder  for  $2,000. 

Plaintiff  originally  brought  his  action  before  the  justice  of  the 
peace  on  the  special  contract  which,  as  already  stated,  was  that 
defendant  was  to  pay  plaintiff  the  agreed  price  of  $100  if  he  sold 
the  property  for  $2,500 ;  but  since  plaintiff  was  unable  to  prove  that 
the  lot  was  sold  for  $2,500  the  complaint  was  amended  in  the 
circuit  court,  over  defendant's  objection,  so  as  to  sue  in  quantum 
meruit,  and  it  was  upon  this  amended  petition  plaintiff  was  allowed 
to  recover.  .  ,  . 

Plaintiff  did  not  secure  a  purchaser  for  the  house  and  lot  he 
engaged  to  sell.  Snyder  and  Bowling  were  never  able  to  agree  on 
a  price  for  the  property  as  it  stood  when  Cox  conducted  the  nego- 
tiations. Bowling's  price  —  and  that,  too,  at  which  Cox  undertook 
to  sell  —  was  $2,500,  but  Snyder  was  not  willing  to  pay  that  for 
the  property.  Subsequently,  however,  when  the  building  was  de- 
stroyed and  the  property  became  materially  changed  (so  that  indeed 
it  was  not  the  same  as  when  Cox  was  employed  to  sell  it).  Bowling 
and  Snyder  came  together  and  a  sale  of  the  vacant  lot  was  effected. 
But  this  was  not  the  property  that  Cox  was  empowered  to  sell.  There 
was  nothing  said  between  Bowling  and  Cox  after  the  destruction  of 
the  building.  So  material  a  change  in  the  subject-matter  of  the 
agency  amounts  to  a  revocation  of  Cox's  authority  as  agent.  It  is 
well  settled  that  the  authority  of  the  agent  is  determined  by  the 
destruction  of  the  subject-matter  of  the  agency.  Story  on  Agency, 
sec.  499;  Ewell's  Evans  on  Agency,  sec.  132;  Mechem  on  Agency, 
sec.  238. 

The  judgment  of  the  circuit  court  must  be  reversed.    All  concur. 


176  TURNER  V.   GOLDSMITH.  [CHAP.   VI. 

TUENER   V.   GOLDSMITH. 

[1891]   1  Q.  B.   (C.  A.)   544. 

Action  for  damages  for  breach  of  contract  of  employment.  De- 
fence, destruction  of  defendant's  manufactory  by  fire.  Judgment 
for  defendant.    Plaintiff  appeals. 

LiNDLEY,  L.  J,  This  is  an  action  for  breach  of  contract  in  not 
employing  the  plaintiff  for  the  period  of  five  years.  The  contract 
turns  upon  the  construction  of  the  agreement  entered  into  by  the 
parties,  and  the  application  of  it  in  the  events  which  have  happened. 
The  plaintiff  wished  to  act  as  traveller  to  the  defendant,  and  the 
defendant  wished  to  engage  him  in  that  capacity.  An  agreement, 
dated  January  31,  1887,  was  entered  into  between  them,  which  con- 
tained this  recital :  — 

"  Whereas,  in  consideration  of  the  agreement  of  the  said  A.  S.  Turner,  the 
said  company  "  (t.  e.,  Mr.  Goldsmith,  and  any  partner  he  might  have)  "  agree 
to  employ  the  said  A.  S.  Turner  as  their  agent,  canvasser,  and  traveller,  upon 
the  terms  and  subject  to  the  stipulations  and  conditions  hereinafter  con- 
tained; and  in  consideration  of  the  premises  the  said  A.  S.  Turner  hereby 
agrees  with  the  said  company  that  he,  the  said  A.  S.  Turner,  shall  and  will 
diligently,  faithfully,  and  honestly  serve  the  said  company  as  their  agent, 
canvasser,  and  traveller,  upon  the  terms  and  subject  to  the  stipulations  and 
conditions  hereinafter  contained." 

Stopping  there,  we  have  a  clear  agreement  by  the  company  to 
employ  the  plaintiff,  and  by  the  plaintiff  to  serve  the  company  — 
and  on  what  terms?  (1)  That  the  agency  shall  commence  as  from 
January  31,  1887,  and  shall  be  determinable  either  by  the  company 
or  Turner  at  the  end  of  five  years  from  the  date  of  the  agreement 
upon  giving  such  notice  as  therein  mentioned.  (2)  "The  said  A. 
S.  Turner  shall  do  his  utmost  to  obtain  orders  for  and  sell  the 
various  goods  manufactured  or  sold  by  the  said  company  as  shall 
be  from  time  to  time  forwarded  or  submitted  by  sample  or  pattern 
to  him,  at  list  price,  to  good  and  substantial  customers."  Clause  5 
is  only  material  because  it  repeats  the  words  "  manufactured  or  sold 
by  the  said  company."  The  8th  clause  provides  for  the  plaintiff's 
remuneration  by  a  commission  on  the  goods  sold  by  him.  The 
other  clauses  are  not  material  as  regards  the  question  before  us. 

It  was  contended  by  the  defendant  that  the  agreement  did  not 
contain  any  stipulation  that  the  company  should  furnish  the  plain- 
tiff with  any  samples,  and  that  there  was,  therefore,  no  agreement 
to  do  what  was  necessary  to  enable  him  to  earn  commission.  The 
answer  to  that  is,  that  the  company  would  not  be  employing  the 
plaintiff  within  the  meaning  of  the  agreement  unless  they  supplied 
him  with  samples  to  a  reasonable  extent.  Then  it  was  said  that 
there  is  no  undertaking  by  the  company  to  go  on  manufacturing. 


CHAP.   VI.]  OPEUATION   OF   LAW.  177 

It  is  true  that  there  is  no  express,  nor,  so  far  as  I  see,  any  implied 
undertaking  by  the  company  to  manufacture  even  a  single  shirt; 
they  might  buy  the  articles  in  the  market.  The  defendant's  place 
of  business  was  burned  down;  the  defendant  has  given  up  business, 
and  has  made  no  effort  to  resume  it.  The  plaintiff  then  says,  "  I 
am  entitled  to  damages  for  your  breach  of  the  agreement  to  employ 
me  for  five  years."  The  defendant  pleads  that  the  agreement  was 
conditional  on  the  continued  existence  of  his  business.  On  the  face 
of  the  agreement  there  is  no  reference  to  the  place  of  business,  and 
no  condition  as  to  the  defendant's  continuing  to  manufacture  or  sell- 
How,  then,  can  such  a  condition  as  the  defendant  contends  for  be 
implied  ? 

It  was  contended  that  the  point  was  settled  by  authority.  I  will 
refer  to  three  cases  on  the  subject.  In  Ehodes  v.  Forwood,  1  App. 
Cas.  256,  it  was  held  that  an  action  very  similar  to  the  present  was 
not  maintainable.  But  that  case  went  on  the  ground  that,  there  not 
being  any  express  contract  to  employ  the  agent,  such  a  contract 
could  not  be  implied.  In  the  present  case  we  find  an  express  con- 
tract to  employ  him. 

In  Cowasjee  Nanabhoy  v.  Lallbhoy  Vullubhoy,  Law  Rep.  3  Ind. 
App.  200,  there  was  a  contract  in  a  partnership  deed  to  employ  one 
of  the  partners  during  his  life  as  sole  agent  to  effect  purchases  and 
sales  on  behalf  of  the  partnership  at  a  commission  upon  his  sales. 
The  partnership  was  dissolved  by  decree  of  the  High  Court  of  Bom- 
bay on  the  ground  that  the  business  could  not  be  carried  on  at  a 
profit.  It  was  held  that  the  employment  was  to  sell  on  behalf  of  the 
partnership;  that,  the  partnership  having  come  to  an  end,  the  em- 
ployment ceased,  and  that  the  partner  could  not  claim  any  compen- 
sation, for  that  a  contract  to  carry  on  the  partnership  during  the 
claimant's  life  under  all  circumstances  could  not  be  implied. 

Taylor  v.  Caldwell,  3  B.  &  S.  826,  833,  contains  some  observa- 
tions which  are  very  much  in  point.  Blackburn,  J.,  there  says: 
"  There  seems  no  doubt  that  where  there  is  a  positive  contract  to 
do  a  thing  not  in  itself  unlawful,  the  contractor  must  perform  it 
or  pay  damages  for  not  doing  it,  although  in  consequence  of  unfore- 
seen accidents  the  performance  of  his  contract  has  become  unex- 
pectedly burdensome  or  even  impossible.  .  .  .  But  this  rule  is  only 
applicable  when  the  contract  is  positive  and  absolute,  and  not  sub- 
ject to  any  condition,  either  express  or  implied,  and  there  are 
authorities  which  we  think  establish  the  principle  that  where  from 
the  nature  of  the  contract  it  appears  that  the  parties  must  from  the 
beginning  have  known  that  it  could  not  be  fulfilled,  unless  when 
the  time  for  the  fulfilment  of  the  contract  arrived  some  particular 
specified  thing  continued  to  exist,  so  that  when  entering  into  the 
contract  they  must  have  contemplated  such  continuing  existence 
as  the  foundation  of  what  was  to  be  done,  then,  in  the  absence  of  any 

12 


178  TURNER  V.   GOLDSMITH.  [CHAP.   VI. 

express  or  implied  warranty  that  the  thing  shall  exist,  the  contract 
is  not  to  be  construed  as  a  positive  contract,  but  as  subject  to  an 
implied  condition  that  the  parties  shall  be  excused  in  case  before 
breach  performance  becomes  impossible  from  the  perishing  of  the 
thing  without  default  of  the  contractor."  The  substance  of  that 
is  that  the  contract  will  be  treated  as  subject  to  an  implied  condition 
that  it  is  to  be  in  force  only  so  long  as  a  certain  state  of  thinga 
continues,  in  those  cases  only  where  the  parties  must  have  contem- 
plated the  continuing  of  that  state  of  things  as  the  foundation  of 
what  was  to  be  done.  Here  the  parties  cannot  be  taken  to  have 
contemplated  the  continuance  of  the  defendant's  manufactory  as 
the  foundation  of  what  was  to  be  done;  for,  as  I  have  already  ob- 
served, the  plaintiff's  employment  was  not  confined  to  articles  manu- 
factured by  the  defendant.  The  action  therefore,  in  my  opinion, 
is  maintainable. 

The  plaintiff  then  is  entitled  to  damages,  and  in  my  opinion 
not  merely  to  nominal  damages;  for,  if  I  am  right  in  my  construc- 
tion of  the  agreement,  he  has  suffered  substantial  loss.  We  think, 
however,  that  £125  is  too  much,  and  the  plaintiff's  counsel  having 
agreed  to  take  our  assessment  of  damages  rather  than  be  sent  to 
a  new  trial,  we  assess  them  at  £50,  and  direct  judgment  to  be  entered 
for  the  plaintiff  for  that  amount. 

Kay^  L.  J.  The  Lord  Justice  Lopes  desires  me  to  say  that  he 
concurs  in  our  decision.  If  it  had  been  shown  that  not  only  the 
manufactory  but  the  business  of  the  defendant  had  been  destroyed 
by  vis  major,  without  any  default  of  the  defendant,  I  think  that 
the  plaintiff  could  not  recover.  But  there  is  no  proof  that  it  is  im- 
possible for  the  defendant  to  carry  on  business  in  articles  of  the 
nature  mentioned  in  the  agreement.  The  contract  is  peculiar ;  it  is 
to  employ  the  plaintiff  for  five  years  certain,  with  power  to  either 
party  to  determine  the  employment  at  the  end  of  that  time  by  notice. 
The  defendant  has  ceased  to  employ  the  plaintiff  within  the  five 
years,  and  contends  that  a  condition  is  to  be  implied  that  the  manu- 
factory must  continue  to  exist.  The  plaintiff  is  not  seeking  to  import 
anything  into  the  contract;  the  defendant  seeks  to  import  the  implied 
condition  which  I  have  mentioned.  I  cannot  import  any  such  con- 
dition. If  it  had  been  proved  that  the  defendant's  power  to  carry 
on  business  had  been  taken  away  by  something  for  which  he  was 
not  responsible,  I  should  say  that  there  was  no  breach  of  the  agree- 
ment; but  here  it  was  not  taken  away,  and  our  decision  is  quite 
consistent  with  the  class  of  cases  where  the  parties  have  been  excused 
from  the  performance  of  a  contract,  because  it  was  considered  to 
be  subject  to  an  implied  condition. 

Appeal  allowed.^ 

^  Compare  Stewart  v.  Stone,  127  N.  Y.  500,  where  It  was  held  that  defendant  was 
excused  from  his  contract  to  manufacture  and  sell  cheese  from  milk  furnished  by 
plaintiff,  by  the  destruction  of  defendant's  factory. 


CHAP.    VI.]  OPERATION   OF   LAW.  179 

LACY  V.   GETMAN,   Executrix. 

119  N.  Y.  109.     1890. 

Plaintiff  contracted  to  work  for  McMahan  upon  his  farm  for 
one  year.  At  the  end  of  about  four  months  McMahan  died  making 
defendant  executrix  and  willing  a  life  estate  in  the  farm  to  his 
widow.  Plaintiff  without  any  new  contract  with  either  the  widow 
or  executrix  remained  to  the  end  of  the  year  working  under  the 
direction  of  the  widow.  He  recovered  from  the  executrix  the  full 
amount  of  his  year's  wages. 

Finch,  J.  The  relation  of  master  and  servant  is  no  longer 
bounded  by  its  original  limits.  It  has  broadened  with  the  advance 
of  civilization  until  the  law  recognizes  its  existence  in  new  areas 
of  social  and  business  life,  and  yields  in  many  directions  to  the 
influence  and  necessities  of  its  later  surroundings.  When,  there- 
fore, it  is  said  generally,  as  the  commentators  mostly  agree  in  saying, 
that  the  contract  relations  of  principal  and  agent,  and  of  master  and 
servant,  are  dissolved  by  the  death  of  either  party,  it  is  very  certain 
that  the  statement  must  be  limited  to  cases  in  which  the  relation 
may  be  deemed  purely  personal,  and  involves  neither  property  rigtits 
nor  independent  action.  Beyond  that,  a  further  limitation  of  the 
doctrine  is  asserted,  which  approaches  very  near  to  its  utter  destruc- 
tion, and  is  claimed  to  be  the  result  of  modern  adjudication.  The 
limitation  is  that  the  rule  applies  only  to  the  contract  of  the  servant, 
and  not  to  that  of  the  master,  and  not  at  all,  unless  the  service  em- 
ployed is  that  of  skilled  labor  peculiar  to  the  capacity  and  experience 
of  the  servant  employed,  and  not  the  common  possession  of  men 
in  general;  and  it  is  proposed  to  adopt  as  a  standard  or  test  of  the 
limitation  an  inquiry  in  each  case  whether  the  contract  on  the  side 
of  the  master  can  be  performed  after  his  death  by  his  representatives 
substantially,  and  in  all  its  terms  or  requirements,  or  cannot  be  so 
performed  without  violence  to  some  of  its  inherent  elements.  .  .  . 

We  have  then  the  peculiar  case  of  a  contract  made  to  work  for 
McMahan  and  under  his  direction  and  control,  which  could  not  be 
performed  because  of  his  death,  transmuted  into  a  contract  to  work 
for  Mrs.  Getman  upon  a  farm  which  she  did  not  possess  and  had  no 
right  to  enter;  and  performed  by  working  for  the  widow  and  under 
her  direction  and  control  alone;  and  this  because  of  the  supposed 
rule  that  the  contract  survived  the  death  of  the  master  and  remained 
binding  upon  his  personal  representatives.  .  .  . 

It  seems  to  be  conceded  that  the  death  of  the  servant  dissolves 
the  contract.  Wolfe  v.  Howes,  20  N.  Y.  197;  Spaulding  v.  Rosa, 
71  id.  40 ;  Devlin  v.  Mayor,  etc.,  63  id.  14 ;  Fahy  v.  North,  19  Barb. 
341;   Clark  v.  Gilbert,  32  id.  576;   Seymour  v.  Cagger,  13  Hun,  29; 


180  LACY   V.   GETMAN,   EXECUTBIX.  [CHAP.    VI. 

Boast  V.  Firth,  L.  E.  (4  C.  P.)  1.  Almost  all  these  eases  were 
marked  by  the  circumstance  that  the  services  belonged  to  the  class 
of  skilled  labor.  In  such  instances  the  impossibility  of  a  substi- 
tuted service  by  the  representative  of  the  servant  is  very  apparent. 
The  master  has  selected  the  servant  by  reason  of  his  personal  quali- 
fications, and  ought  not,  when  he  dies,  to  abide  the  choice  of  another 
or  accept  a  service  which  he  does  not  want.  While  these  cases  possess, 
with  a  single  exception,  that  characteristic,  I  do  not  think  they  de- 
pend upon  it.  Fahy  v.  North  was  a  contract  for  farm  labor,  ended 
by  the  sickness  of  the  servant,  and  quite  uniformly  the  general  rule 
stated  is  that  the  servant's  agreement  to  render  personal  services  is 
dissolved  by  his  death.  There  happens  a  total  inability  to  perform; 
it  is  without  the  servant's  fault;  and  so  further  performance  is  ex- 
cused and  the  contract  is  apportioned.  If  in  this  case.  Lacy  had 
died  on  that  day  in  July,  his  representative  could  not  have  per- 
formed his  contract.  McMahan,  surviving,  would  have  been  free 
to  say  that  he  bargained  for  Lacjr's  services,  and  not  for  those  of 
another  selected  and  chosen  by  strangers,  and  either  the  contract 
would  be  broken  or  else  dissolved.  I  have  no  doubt  that  it  must  be 
deemed  dissolved,  and  that  the  death  of  the  servant,  bound  to  render 
personal  services  under  a  personal  control,  ends  the  contract,  and 
irrespective  of  the  inquiry  whether  those  services  involve  skilled 
or  common  labor.  For,  even  as  it  respects  the  latter,  the  servant's 
character,  habits,  capacity,  industry,  and  temper,  all  enter  into  and 
affect  the  contract  which  the  master  makes,  and  are  material  and 
essential  where  the  service  rendered  is  to  be  personal  and  subject 
to  the  daily  direction  and  choice  and  control  of  the  master.  He 
was  willing  to  hire  Lacy  for  a  year;  but  Lac/s  personal  representa- 
tive, or  a  laborer  tendered  by  him,  he  might  not  want  at  all  and  at 
least  not  for  a  fixed  period,  preventing  a  discharge.  And  so  it  must 
be  conceded  that  the  death  of  the  servant,  employed  to  render  per- 
sonal services  under  the  master's  daily  direction,  dissolves  the  con- 
tract.   Babcock  v.  Goodrich,  3  How.  Pr.  (n.  s.)  53. 

But  if  that  be  so,  on  what  principle  shall  the  master  be  differently 
and  more  closely  bound  ?  There  is  no  logic  and  no  justice  in  a  con- 
trary rule.  The  same  reasoning  which  relieves  the  servant's  estate 
relieves  also  the  master's,  for  the  relation  constituted  is  personal  on 
both  sides  and  contemplates  no  substitution.  If  the  master  selects 
the  servant,  the  servant  chooses  the  master.  It  is  not  everyone  to 
whom  he  will  bind  himself  for  a  3'^ear,  knowing  that  he  must  be 
obedient  and  render  the  services  required.  Submission  to  the  mas- 
ter's will  is  the  law  of  the  contract  which  he  meditates  making.  He 
knows  that  a  promise  by  the  servant  to  obey  the  lawful  and  reasonable 
orders  of  his  master  within  the  scope  of  his  contract  is  implied  by 
law ;  and  a  breach  of  this  promise  in  a  material  matter  justifies  the 
master  in  discharging  him.    King  v.  St.  John,  Devizes,  9  B.  &  C. 


CHAP.    VI.]  OPERATION   OF  LAW.  181 

896.  One  does  not  put  himself  in  such  a  relation  for  a  fixed  period 
without  some  choice  as  to  whom  he  will  serve.  The  master's  habits, 
character,  and  temper  enter  into  the  consideration  of  the  servant 
before  he  binds  himself  to  the  service,  just  as  his  own  personal  char- 
acteristics materially  affect  the  choice  of  the  master.  The  service, 
the  choice,  the  contract  are  personal  upon  both  sides,  and  more  or 
less  dependent  upon  the  individuality  of  the  contracting  parties, 
and  the  rule  applicable  to  one  should  be  the  rule  which  governs  the 
other. 

If  now,  to  such  a  case  —  that  is  to  the  simple  and  normal  relation 
of  master  and  servant,  involving  daily  obedience  on  one  side  and 
constant  direction  on  the  other  —  we  apply  the  suggested  test  of 
possibility  of  performance  in  substantial  accord  with  the  contract, 
the  result  is  not  different.  It  is  said,  that  if  the  master  dies  his 
representatives  have  only  to  pay,  and  anyone  may  do  that.  But 
under  the  contract,  that  is  by  no  means  all  that  remains  to  be  done. 
They  must  take  the  place  of  the  master  in  ordering  and  directing 
the  work  of  the  farm,  and  requiring  the  stipulated  obedience.  That 
may  prove  to  effect  a  radical  change  in  the  situation  of  the  servant, 
as  it  seems  to  have  done  in  the  present  case,  leading  the  plaintiff  to 
the  verge  of  refusing  to  work  further  for  either  widow  or  executrix, 
whose  views  apparently  jangled.  The  new  master  cannot  perform 
the  employer's  side  of  the  contract  as  the  deceased  would  have  per- 
formed it,  and  may  vary  so  far,  from  incapacity  or  fitful  temper 
or  selfish  greed,  as  to  make  the  situation  of  the  servant  materially 
and  seriously  different  from  that  which  he  contemplated  and  for 
which  he  contracted. 

We  are,  therefore,  of  opinion  that  in  the  case  at  bar  the  contract 
of  service  was  dissolved  by  the  death  of  McMahan,  and  his  estate 
was  only  liable  for  the  services  rendered  to  the  date  of  his  death. 

The  judgment  should  be  reversed  and  a  new  trial  granted  with 
costs  to  abide  the  event.    All  concur. 

Judgment  reversed. 


WEBEB,   Adm'x   v.   BEIDGMAN. 

113  N.  Y.  600.     1889. 

This  action  was  for  the  foreclosure  of  a  mortgage  executed  by 
James  Dunn  to  Thomas  Bierds,  covering  premises  situated  on  Carl- 
ton Avenue,  Brookljm,  as  security  for  the  payment  of  his  bond  of 
$2,000,  dated  May  9,  1872.  It  was  assigned  to  Paul  Weber.  He 
died  intestate.  On  the  4th  of  June,  1874,  the  plaintiff,  Louisa 
Weber,  his  widow,  was  appointed  administratrix  of  his  estate,  and 
on  July  1,  1886,  commenced  this  action.    Both  the  defendants  aver 


182  WEBER,   ADM'X   V.   BRIDGMAN.  [CHAP.*  VI. 

that  the  mortgage  in  suit  was  paid  to  the  then  holder  and  duly  satis- 
fied of  record  May  13,  1874. 

The  trial  judge  found  in  favor  of  the  plaintiff  and  directed  the 
usual  judgment  of  foreclosure  and  sale.  The  General  Terra,  upon 
the  defendant's  appeal,  reversed  the  judgment  "  upon  questions  of 
fact  and  questions  of  law."  The  question  of  fact  litigated  upon  the 
trial  arose  upon  the  defence  of  payment.  It  appeared,  to  the  satis- 
faction of  the  trial  judge,  that  Paul  Weber,  then  residing  in  New 
York,  but  about  to  visit  Europe  with  his  wife  and  family,  did,  on 
June  6,  1871,  execute  to  one  August  Hartwig  a  power  of  attorney 
under  seal,  authorizing  him  to  collect  all  debts  and  demands  due 
him  and  give  receipts  therefor.  "Weber  died  Jan.  11,  1874.  During 
his  absence  Hartwig  bought  for  him  the  bond  and  mortgage  in 
question,  taking  an  assignment  to  Paul  Weber,  and,  after  record, 
held  possession  of  said  bond,  mortgage  and  assignment  till  May  12, 
1874,  collected  and  receipted  for,  in  Paul  Weber's  name,  the  semi- 
annual interest. 

On  April  23,  1874,  Bridgman  acquired  title  to  the  premises  and 
assumed  payment  of  the  mortgage.  It  became  due  May  9,  1874, 
and  was  paid  by  him  by  check  to  Hartwig  May  12,  1874,  and  a 
discharge  was  given  by  Hartwig  as  attorney  for  Weber.  At  the  same 
time  the  bond  and  mortgage,  the  assignment  to  Weber,  and  the 
power  of  attorney  were  delivered  to  Bridgman.  Hartwig,  during 
all  this  transaction,  knew  of  the  death  of  Weber,  having  been  in- 
formed of  it  as  early  as  the  first  of  February,  1874,  but  he  did  not 
disclose  that  fact  to  Bridgman.  But  the  trial  judge  also  finds  that 
Bridgman  made  no  inquiry  "  as  to  the  whereabouts  of  the  principal, 
Paul  Weber,  or  whether  he  was  dead  or  alive." 

Mrs.  Weber  returned  from  Europe  on  the  twenty-second  or  twenty- 
fourth  of  May.  The  trial  judge  also  found  that  Hartwig  never 
accounted  to  the  plaintiff  for  the  bond  and  mortgage  or  its  proceeds,^ 
nor  for  the  assets  in  his  hands,  nor  did  he  pay  her  any  money;  that 
plaintiff  never  ratified  the  act  of  Hartwig  in  cancelling  said  mort- 
gage ;  that  she  had  no  notice  of  the  existence  of  said  bond  and  mort- 
gage or  the  cancellation  thereof,  and  never  knew  of  the  cancellation 
until  within  a  ^hort  time  before  the  commencement  of  this  action; 
that  said  Hartwig  left  no  record  of  it,  nor  ever  informed  plaintiff 
of  its  existence  or  cancellation;  that  said  mortgage  is  wholly  unpaid, 
and  remains  unimpaired  as  a  valid  and  subsisting  lien  by  reason 
of  any  act  of  the  plaintiff  or  her  duly  authorized  agent. 

As  conclusion  of  law,  he  held  that  the  agency  of  Hartwig  ter- 
minated with  the  life  of  Paul  Weber,  and  that  the  satisfaction  of 
the  mortgage  was  invalid  and  void. 

Danforth,  J.  It  should  be  assumed,  without  argument,  that  the 
plaintiff  is  not  bound  by  the  act  of  Hartwig,  unless  his  authority 
to  receive  the  money  and  discharge  the  mortgage  was  established. 


CHAP.   VI.]  OPERATION   OF   LAW.  183 

or  unless  she  has,  with  knowledge  of  the  facts,  recognized  that 
transaction  and  adopted  it.  The  respondents'  contention  is  that 
both  alternatives  are  established,  viz. :  That  the  pajTnent  to  Hartwig 
was  a  valid  payment,  and  also  that  Hartwig  accounted  with  the 
plaintiff  and  paid  over  to  her  the  money  so  received  by  him.  As 
Bridgman  dealt  with  Hartwig  as  an  agent,  and  now  seeks  to  charge 
the  representative  of  Weber  as  if  his  dealing  had  been  with  the  prin- 
cipal, the  burden  of  proof  was  on  him  to  show  either  that  the  agency 
existed,  and  that  the  agent  with  whom  he  dealt  had  the  authority 
he  assumed  to  exercise,  or  that  the  plaintiff  is  estopped  from  dis- 
puting it.  That  an  agency  of  some  kind  did  at  one  time  exist  in 
favor  of  Hartwig  was  sufficiently  manifested  by  the  power  of  attorney 
and  proof  of  its  due  execution  and  delivery  by  Weber.  If  it  be  con- 
ceded that  the  act  in  question  was  within  the  authority  which  Hart- 
wig once  had,  it  would  not  aid  the  defendant,  for  that  authority 
v/as  determined  by  the  death  of  Weber  before  the  act  was  performed, 
and  although  Bridgman  had  no  notice  of  his  death  the  act  was  void 
and  the  estate  of  the  principal  is  not  bound. 

The  question  is  not  new,  and  it  has  been  uniformly  answered  by 
our  decisions  to  the  effect  that  the  death  of  the  principal  puts  an 
end  to  the  agency,  and,  therefore,  is  an  instantaneous  and  unqualified 
revocation  of  the  authority  of  the  agent.  (2  Kent's  Com.  646;  Hunt 
V.  Eousmanier,  8  Wheat.  174.)  There  can  be  no  agent  where  there 
is  no  principal.  There  are,  no  doubt,  exceptions  to  the  rule,  as  where 
the  agency  is  coupled  with  an  interest  (Knapp  v.  Alvord,  10  Pai. 
205;  Hunt  v.  Eousmanier,  supra;  Hess  v.  Eau,  95  N.  Y.  359); 
or  where  the  principal  was  a  firm  and  only  one  of  its  members  died. 
(Bank  v.  Vanderhorst,  32  N.  Y.  553.)  But  both  cases  recognize 
the  general  rule  to  be  as  above  stated.  In  Davis  v.  Windsor  Savings 
Bank  (46  Vt.  728),  the  rule  was  applied.  The  defendant  paid 
money  to  the  agent  after  the  death  of  his  principal,  but  in  ignorance 
of  it,  and  the  administrator  of  the  deceased  recovered.  It  is  quite 
unnecessary  to  go  through  the  cases  on  this  subject.  The  rule  at 
common  law  which  determines  the  authority  of  an  agent  by  the 
death  of  his  principal  is  well  settled,  and  no  notice  is  necessary  to 
relieve  the  estate  of  the  principal  of  responsibility,  even  on  contracts 
into  which  the  agent  had  entered  with  third  persons  who  were 
ignorant  of  his  death.  Those  who  deal  with  an  agent  are  held  to 
assume  the  risk  that  his  authority  may  be  terminated  by  death 
without  notice  to  them.  This  rule  was  established  in  England 
(Leake  on  Con.  487),  although  now  modified  by  statute,  and  is 
generally  applied  in  this  country.  ( Story  on  Agency,  §  488 ;  Pars, 
on  Con.  vol.  1,  p.  71;  2  Kent's  Com.  (12th  ed.)  645,  646.) 

In  some  states  alterations  have  been  made  by  statute;  and,  fol- 
lowing the  civil  law,  it  was  held  in  Pennsylvania  (Cassiday  v.  M'Ken- 
zie,  4  Watts  &  Serg.  282),  that  the  acts  of  an  agent  or  attorney. 


184  WEBER,   ADM'X   V.   BRIDGMAN.  [CHAP.    VI. 

done  after  the  death  of  his  principal,  of  which  he  was  ignorant, 
are  binding  upon  the  parties.  This  was,  however,  in  opposition  to 
the  current  of  authority.  (1  Pars,  on  Con.  71;  2  Kent's  Com. 
646.)  But  even  that  case  does  not  aid  the  defendant,  for  here  the 
agent  knew  of  the  death  of  his  principal.  Moreover,  the  defendant 
might  have  known  it  had  he  taken  the  precaution  to  inquire.  He 
had  never  before  dealt  with  the  agent.  The  power  of  attorney  was 
not  of  recent  date,  and  the  defendant  should  be  held  to  have  assumed 
the  burden  of  showing  that  Hartwig  was,  at  the  moment  of  the 
transaction,  a  person  authorized  to  act  so  as  to  bind  the  real  owner 
of  the  bond  and  mortgage,  whoever  that  person  might  prove  to  be. 
There  is  no  equity  in  his  favor,  for  the  loss,  if  any,  is  from  his  own 
negligence. 

It  is  claimed,  however,  by  the  learned  counsel  for  the  respondents, 
that, the  rule  has  application  only  where  the  act  of  the  agent  is 
required  to  be  done  in  the  name  of  the  principal,  and  his  contention 
is,  as  we  understand  it,  that,  inasmuch  as  Hartwig  had  possession 
of  the  bond  and  mortgage,  the  defendant  from  that  fact  had  a 
right  to  infer  an  agency  to  collect,  and  so  the  payment  was  valid.^ 
However  that  might  be  under  other  circumstances,  the  contention 
has  no  force  in  this  instance.  The  power  of  Hartwig  was  not  left 
to  inference.  Whatever  it  was  it  came  before  the  defendant  in 
writing.  The  power  of  attorney  was  in  his  hands.  It  authorized 
such  acts  only  as  could  be  performed  in  the  name  of  the  principal, 
and  so  the  defendant  understood  it.  He  caused  the  power  to  be 
recorded,  took  a  discharge  of  the  mortgage  under  it  executed  by 
Hartwig  as  agent  for  Weber,  and  gave  the  check  payable  to  the  order 
of  Hartwig  in  that  character.  Except  for  the  power  of  attorney 
and  its  recitals,  and  the  acts  of  Hartwig  under  it,  the  defendant 
would  not  have  even  the  shadow  of  a  defence.  In  his  own  name 
Hartwig  could  do  nothing,  and  of  this  the  defendant  had  full  notice. 
The  power  of  attorney  which  accompanied  possession  of  the  securi- 
ties defined  the  actual  authority,  and  the  defendant  had  notice  of 
its  contents  at  the  same  moment  that  he  saw  the  bond  and  mortgage 
in  the  hands  of  the  attorney.    The  authority  which  might  be  gathered 

'  Ish  V.  Crane,  8  Oh.  St.  520,  and  again  13  Oh.  St.  574,  while  admitting  the  gen- 
eral rule  that  death  revokes  the  agency,  holds  that  a  transaction  which  need  not 
necessarily  be  executed  in  the  name  of  the  principal  will,  if  executed  In  good  faith 
after  the  death  of  the  principal  and  in  ignorance  of  that  event,  be  binding  on  his 
representatives.  In  that  case  the  agent,  acting  under  a  prior  authority,  sold  the 
lands  of  the  principal  and  entered  into  a  written  contract  of  sale  after  the  principal, 
unknown  to  either  the  agent  or  the  purchaser,  was  already  deceased.  The  court 
cites  as  sustaining  this  decision  Cassiday  v.  M'Kenzie,  4  Watts  &  Serg.  282,  and 
Dick  V.  Page  &  Bacon,  17  Mo.  234.  In  Deweese  v.  Muff,  57  Neb.  17,  a  principal  in- 
dorsed a  note  in  blank  and  delivered  it  to  his  agent  for  collection ;  after  the  prin- 
cipal's death,  unknown  to  the  maker  of  the  note,  the  latter  paid  it  to  the  agent  and 
Jt  was  held  that  the  payment  was  binding  on  the  principal's  representatives.  In 
Meinhardt  v.  Newman,  99  N.  W.  (Neb.)  261,  It  was  held  that  the  principal's  repre- 
sentatives were  by  their  conduct  estopped  to  deny  the  validity  of  payments  made  to 
the  agent  after  the  principal's  death. 


CHAP.   VI.]  OPERATION   OF   LAW.  185 

from  their  mere  possession  is,  under  these  circumstances,  of  no  force. 
The  giving  of  an  authority  in  writing  imports  that  the  extent  of 
the  authority  is  to  be  looked  for  in  its  terms,  and  not  elsewhere. 

[The  court  then  holds  that  there  was  not  sufficient  evidence  of 
knowledge  and  ratification  by  plaintiff.] 

The  order  of  the  General  Term  should,  therefore,  be  reversed,  and 
the  judgment  of  the  Special  Term  affirmed,  with  costs. 

All  concur. 

Ordered  accordingly.*- 


LONG   V.   THAYEK. 

150  U.  S.  520.     1893. 

Bill  in  equity  filed  by  Thayer  to  enjoin  enforcement  of  a  judg- 
ment of  ejectment  obtained  by  Long  against  one  Smith,  a  tenant 
under  Thayer.  Judgment  for  Thayer,  upon  condition  that  he  pay 
into  court  $126.25,  with  interest,  and  decree  that  Long  deposit  quit- 
claim deed,  etc.     Long  appeals. 

Thayer  bought  the  lot  in  question  of  Skiles  and  Western  under 
a  contract  made  with  their  agent  Kinney,  by  which  upon  non- 
payment of  future  instalments  (amounting  to  $252.50),  Thayer 
was  to  forfeit  the  contract.  Western  died  soon  after.  The  instal- 
ments were  paid  by  Thayer  to  Kinney  after  Western's  death,  one 
being  paid  before  he  knew  of  Western's  death,  and  one  after  he  knew 
of  it.  Long  is  the  grantee  from  Western's  heirs,  who  had  by  parti- 
tion proceedings  succeeded  to  Skiles'  interest  also. 

Mr.  Justice  Brown  (after  stating  the  case)  delivered  the  opinion 
of  the  court. 

This  case  turns  largely  upon  the  legal  effect  to  be  given  to  the 
death  of  Western,  which  took  place  a  few  days  after  the  contract 
for  the  sale  of  the  land  was  made,  and  before  the  first  note  became 
due.  Had  Western  not  died,  there  can  be  no  question  that  the 
payments  to  Kinney  would  have  been  good,  and  that  Thayer  would 
have  been  entitled  to  a  deed. 

Western's  death  undoubtedly  operated  as  a  revocation  of  Kinne/s 
authority  to  act  for  him  or  his  estate.  The  pajTuents  made  to  Kinney 
as  his  agent  would  not  be  sufficient  to  discharge  Thayer's  obligation 
to  his  estate,  even  if  such  payments  were  made  by  him  in  actual 
ignorance  of  Western's  death.  Michigan  Insurance  Co.  v.  Leaven- 
worth, 30  Vermont,  11 ;  Davis  v.  Windsor  Savings  Bank,  46  Vermont, 

*  In  Moore  v.  Weston,  102  N.  W.  (N.  Dak.)  163,  the  payee  of  a  note  by  a  memo- 
randum written  on  It  authorized  the  maker  upon  the  death  of  the  payee  to  expend 
any  unpaid  balance  in  funeral  expenses,  monument,  etc.  The  maker  did  so.  It  was 
held  that  he  was  liable  to  the  estate  of  the  payee  for  the  full  amount  of  the  note 
since  death  terminated  the  authority  and  a  disposition  of  proiperty  to  take  effect 
after  death  must  be  by  a  formal  will. 


186  LONG  V.   THAYER.  [CHAP.  VL 

728;  Jenkins  v.  Atkins,  1  Humphrey  (Tenn.),  294;  Clayton  v. 
Merrett,  52  Mississippi,  353;  Lewis  v.  Kerr,  17  Iowa,  73.  Indeed 
it  was  said  by  this  court  in  Gait  v.  Galloway,  4  Pet.  332,  344,  that 
*'no  principle  is  better  settled,  than  that  the  powers  of  an  agent 
cease  on  the  death  of  his  principal.  If  an  act  of  agency  be  done, 
subsequent  to  the  decease  of  the  principal,  though  his  death  be  un- 
known to  the  agent,  the  act  is  void." 

Whether  Western's  death  also  operated  as  a  revocation  of  the 
verbal  authority  given  by  Skiles  may  admit  of  some  doubt,  although 
the  weight  of  authority  is  that  the  death  of  one  partner  or  joint 
owner  operates,  in  the  case  of  a  partnership,  to  dissolve  the  partner- 
ship, and  in  the  case  of  a  joint  tenancy  to  sever  the  joint  interest; 
and  the  authority  of  an  agent  appointed  by  a  firm  or  joint  owners 
thereupon  ceases,  where  such  authority  is  not  coupled  with  an  in- 
terest. McNaughton  v.  Moore,  1  Haywood  (N.  C),  189;  Kowe  v. 
Eand,  111  Indiana,  206. 

But  even  if  it  did  operate  as  a  technical  revocation  of  Kinney^s 
authority  to  act  for  Skiles,  the  presumption  is,  from  Skiles'  long 
silence,  in  the  absence  of  proof  to  the  contrary,  that  Kinney  accounted 
to  him  for  his  proportion  of  the  money  collected.  The  court  below 
evidently  proceeded  upon  this  theory,  and  required  Thayer,  as  a 
condition  for  calling  upon  Long  for  a  deed,  to  repay  one-half  of  the 
amount  of  the  two  notes  with  the  stipulated  interest  at  10  per  cent. 
These  were  certainly  as  favorable  terms  as  Long  could  expect. 
Thayer  had  paid  the  money  to  Kinney,  with  whom  the  contract  was 
made,  —  the  first  payment  in  actual  ignorance  of  Western's  death, 
and  the  second  doubtless  under  the  supposition,  which  a  person 
unlearned  in  the  law  might  reasonably  entertain,  that  payment  to 
the  person  with  whom  the  contract  was  made  was  sufficient,  and  that 
Kinney  would  account  to  the  proper  representatives  of  Western,  and 
procure  him  a  deed.  All  the  equities  of  the  case  were  in  Thayer's 
favor,  and  justice  demanded  that  Long  should  be  required  to  convey, 
upon  being  paid.  Western's  share  of  the  consideration  with  interest. 

There  is  another  view  of  the  case  which  does  not  seem  to  have 
been  presented  to  the  court  below,  and  which  indicates  that  Long 
received  even  more  than  he  was  really  entitled  to.  The  second  note 
of  $150,  which  is  produced,  appears  upon  its  face  to  have  been 
payable  to  " J.  F.  Kinney  or  bearer"  and  while  the  first  note  is 
not  produced,  Kinney  swears  that  this  was  also  payable  in  the  same 
manner.  The  probabilities  are  that  it  was,  both  from  the  fact  that 
the  second  note  was  payable  to  bearer  and  from  the  further  fact  that 
Kinney  claimed  that  Western  was  largely  indebted  to  him.  If  such 
were  the  case  (and  Kinney's  authority  to  take  these  notes  is  not  dis- 
puted), it  is  difficult  to  see  why  the  payments  to  Kinney,  who  himself 
held  the  notes,  were  not  valid  payments,  which  entitled  Thayer  to 
a  deed  to  the  land.     So  long  as  these  notes  were  outstanding,  he 


CHAP.    VI.]  OPERATION    OF   LAW.  187 

could  not  safely  pay  to  anyone  else,  and  if  he  paid  the  holder,  he  did 
just  what  the  contract  required  him  to  do. 

Long  clearly  was  not  an  innocent  purchaser  of  the  land  in  ques- 
tion. Not  only  had  Thayer  been  in  the  open,  notorious,  and  unequiv- 
ocal possession  of  the  land  and  its  improvement,  renting  the  premises 
and  paying  the  taxes,  but  Long's  marriage  into  the  Western  family, 
his  taking  a  deed  from  the  heirs  through  Mr.  Meriwether,  the  hus- 
band of  one  of  the  heirs,  who  acted  as  attorney  both  for  Long  and 
for  the  heirs,  and  the  giving  of  a  promissory  note  unsecured  by 
mortgage  upon  the  land,  —  a  note  which  the  heirs  apparently  never 
saw,  —  indicate  very  clearly  that  he  could  not  have  been  ignorant 
of  the  true  situation. 

The  decree  of  the  court  below  was  clearly  right,  and  must  be 

AiJirmed. 

Farmers'  Loan  &  Trust  Co.  v.  Wilson,  139  N.  Y.  284  (1893) : 
An  agent  after  the  death  of  his  principal  collected  rents.  The  plain- 
tiff, as  trustee,  recovered  judgment  from  the  defendant  for  the  rents 
so  paid.  Neither  the  agent  nor  the  defendant  knew  of  the  death  of 
the  principal  when  the  rent  was  paid.  Held  (by  O'Brien,  J.)  :  That 
the  agency  was  revoked  by  the  death  of  the  principal  and  that  the 
payments  to  the  agent  after  the  death  of  the  principal  did  not  bind 
the  estate.  The  court  says :  "  The  rule  seems  to  have  originated  in 
the  presumption  that  those  who  deal  with  an  agent  knowingly  assume 
the  risk  that  his  authority  may  be  terminated  by  death  without  notice 
to  them.  The  case  of  an  agency  coupled  with  an  interest  is  made 
an  exception  to  the  rule.  .  .  .  The  common-law  rule  has  become  too 
firmly  established  in  this  state  to  be  disturbed  by  judicial  action, 
though  a  change  by  the  law-making  power  would  be  in  harmony 
with  more  enlightened  views  and  would  promote  the  interests  of 
justice." 


DREW   V.   NUNK 

4Q.  B.  D.  (C.  A.)  661.     1879. 
[Reported  herein  at  p.  22.] 


MEREITT   V.   MERRITT. 

43  N.  Y.  App.  Div.  68. 
[Reported  herein  at  p.  25.] 


188  HUBBARD   V.   MATTHEWS.  [CHAP.   VI. 

HUBBARD   V.   MATTHEWS. 

54  N.  Y.  43.     1873. 

Defendant  was  indorser  of  notes  transferred  to  plaintiff  and  pay- 
able in  New  Orleans.  While  still  in  New  Orleans  defendant,  on 
April  26,  1861,  gave  one  Burke  authority  to  receive  and  acknowledge 
notices  of  protest,  and  then  returned  to  his  home  in  New  York. 
After  the  outbreak  of  the  Civil  War  the  notes  were  duly  presented 
for  payment  in  New  Orleans  and  upon  dishonor  notice  was  duly 
given  to  Burke  in  New  Orleans.    Judgment  for  plaintiff. 

Johnson,  C.  .  .  .  The  doctrine  that  an  agent  constituted  before 
a  war  may  continue  to  represent  his  principal  in  transactions  not 
contrary  to  the  policy  or  interests  of  the  government  of  the  agent's 
residence,  though  the  principal  be  an  enemy  resident  under  the  hos- 
tile government,  seems  to  have  been  often  affirmed;  several  times 
acted  upon  by  the  courts,  and  never,  that  I  have  found,  denied.  In 
United  States  v.  Grossmayer  (9  Wall.  72)  Mr.  Justice  Davis,  deliv- 
ering the  opinion  of  the  Supreme  Court  of  the  United  States,  says: 
"  We  are  not  disposed  to  deny  the  doctrine  that  a  resident  in  the 
territory  of  one  of  the  belligerents  may  have,  in  time  of  war,  an 
agent  residing  in  the  territory  of  the  other,  to  whom  his  debtor  could 
pay  his  debt  in  money,  or  deliver  to  him  property  in  discharge  of  it ; 
but  in  such  a  case  the  agency  must  have  been  created  before  the  war 
began,  for  there  is  no  power  to  appoint  an  agent  for  any  purpose, 
after  hostilities  have  actually  commenced;  and  to  this  effect  are  all 
the  authorities." 

The  same  principle  is  recognized  in  Ward  v.  Smith,  7  Wall.  452; 
Conn.  V.  Penn.,  1  Peters'  Cir.  C.  496,  524;  Denniston  v.  Imbrie,  3 
Wash.  C.  C.  396,  403 ;  Paul  v.  Christie,  4  Harris  &  McH.  161 ;  Rob- 
inson V.  International  Life  Ins.  Co.,  42  N.  Y.  54,  62;  and  also  in 
the  earlier  cases  in  this  State  of  Buchanan  v.  Curry,  19  J.  R.  137, 
141;  Griswold  v.  Waddington,  16  id.  484;  Clarke  v.  Morey,  10  id. 
69,  73.  Moneys  received  by  such  an  agent  are  lawfully  paid  and  law- 
fully received  though  a  remittance  by  him  to  his  enemy  principal 
would  be  unlawful.  If  such  an  agency  can  exist  at  all  for  any  pur- 
pose, it  is  not  perceived  why,  being  lawfully  constituted  in  its  begin- 
ning, it  may  not  subsist  for  any  purpose  not  hostile,  and  especially 
for  such  a  purpose  as  to  receive  notices  of  dishonor  upon  notes  in 
order  to  charge  an  absent  indorser. 

The  judgment  should  be  afl&rmed. 

All  concur.  Judgment  affirmed. 


CHAP.   VI.]  OPERATION   OF   LAW.  189 

MARTINE    V.    INTERNATIONAL    LIFE    INS.    SOCIETY. 

53  N.  Y.  339.     1873. 

Action  on  a  life  insurance  policy.  Premiums  were  paid  up  to 
1861  to  the  defendant's  agents,  Starke  &  Pearce,  in  North  Carolina. 
After  Starke's  death  the  premiums  for  1862,  1863,  and  1864  were 
paid  to  Pearce,  the  surviving  partner.  The  insured  died  in  1864. 
The  referee  directed  judgment  for  the  full  amount  of  the  policy. 
The  General  Term  reversed  the  judgment.    Plaintiff  appeals. 

Church,  Ch,  J.  The  referee  found  that  payments  upon  the  policy 
had  been  duly  made  up  to  the  death  of  Mr.  Martine.  The  payment 
to  the  agents,  Starke  &  Pearce,  in*  April,  1861,  was  good.  They 
were  the  agents  of  the  defendant  at  Fayetteville,  North  Carolina, 
and  the  assured  had  repeatedly  been  notified  to  pay  the  premiums 
at  tlie  office  of  their  agency  at  that  place.  The  instructions  to  the 
agents  as  to  the  manner  of  receiving  them,  viz.,  upon  receipts  for- 
warded from  the  New  York  office,  were  never  communicated  to  the 
assured,  and  she  was  not  affected  by  them.  She  was  directed  to  pay 
at  the  office  of  their  agent,  and  she  had  a  right  to  comply  with  the 
direction. 

The  validity  of  the  subsequent  payments  for  1862,  1863,  and  1864 
is  more  difficult  to  be  maintained.  Between  1861  and  1862,  Starke, 
one  of  the  firm,  died,  and  the  payments  were  made  to  and  received 
by  Pearce,  as  surviving  partner.  The  assured  is  chargeable  with 
notice  of  the  death  of  Starke,  and  the  authority  by  which  Pearce 
assumed  to  act,  by  the  receipts  executed  and  received  for  the  pre- 
miums for  those  years.  He  did  not  profess  to  be  the  agent  of  the 
defendant,  but  acted  as  the  surviving  partner  of  the  firm  who  had 
been  agents.  There  is  no  authority  to  sustain  his  right  to  so  act. 
The  death  of  one  member  of  a  firm  operates  immediately  and  in- 
evitably as  a  dissolution.  Story  on  Part.  §  317;  Parsons,  id.,  438. 
During  the  existence  of  a  partnership,  each  member  is  deemed  to 
be  authorized  to  transact  any  business  for  the  firm,  but  upon  dissolu- 
tion this  authority  ceases,  and  the  only  authority  of  the  survivor 
is  to  close  up  the  business.  He  has  no  right  to  create  new  obliga- 
tions, nor  indeed  to  do  anything  in  the  name  of  the  firm,  except  such 
as  is  necessary  in  adjusting  and  closing  its  concerns.  Van  Keuren 
V.  Parmelee,  2  N.  Y.  523.  It  is  a  general  rule  of  the  common  law 
that  an  authority  by  a  principal  to  two  persons  to  do  an  act  is  joint, 
and  the  act  must  be  concurred  in  by  both.  Dunlap's  Paley  on 
Agency,  177;  Green  v.  Miller,  6  J.  R.  39;  13  Jurist,  938;  Story  on 
Agency,  §  42.  When  a  firm  is  appointed  to  an  agency,  this  rule 
would  necessarily  be  modified  to  the  extent  that  either  member  of  a 
firm  could  do  any  act  within  the  scope  of  the  agency,  the  same  as 


190         MARTINE   V.   INTERNATIONAL   LIFE  INS.    SOCIETY.      [CHAP.   VI. 

he  could  perform  any  other  partnership  act.  By  appointing  a  part- 
nership firm  it  would  be  implied  that  the  authority  was  joint  and 
several.^  But  upon  dissolution  of  the  firm  such  an  agency  would 
cease.  This  is  the  necessary  result  of  the  principles  alluded  to.  The 
principal  would  not  be  bound  by  the  act  of  a  surviving  member  of 
a  firm,  because  he  had  never  appointed  him  to  act  nor  agreed  to  be 
responsible  for  his  acts,  and  the  latter  could  incur  no  obligation 
against  the  deceased  member  or  his  representatives. 

The  counsel  for  the  appellant  suggested  that,  as  the  notice  to  the 
assured  required  payment  at  the  office  of  its  agent  in  Fayetteville, 
she  was  justified  in  paying  at  the  office  of  Starke  &  Pearce.  The 
answer  is,  that  if  the  company  had  no  agent,  then  it  had  no  office  of 
an  agent,  and,  as  we  have  seen,  the  agency  ceased  upon  the  death  of 
Starke.  It  is  also  suggested  that  it  was  the  duty  of  the  company 
to  appoint  an  agent  at  that  place  to  receive  the  premiums,  and  that 
it  cannot  take  advantage  of  its  own  negligence.  There  is  nothing  in 
the  contract  indicating  Fayetteville  as  the  place  of  payment.  The 
notices  to  pay  at  Fayetteville  would  justify  such  payments,  so  long 
as  the  privilege  was  unrecalled  and  the  defendant  had  an  agent  there. 
Upon  the  death  of  Starke  the  agency  ceased,  which  the  assured  must 
have  known,  and  the  defendant  was  under  no  legal  obligation  to 
appoint  another,  but  the  obligation  to  pay  the  premiums  to  the 
society  remained.  The  case  of  Hamilton  v.  Mutual  Life  Ins.  Co., 
9  Blatch.  235,  was  different.  By  the  contract  the  premiums  were 
payable  to  an  agent  residing  in  Alabama,  appointed  in  pursuance  of 
a  statute  of  that  State,  and  required  as  a  condition  of  transacting 
business  there.  The  company  revoked  the  agency,  which  prevented 
the  assured  from  paying  the  premiums,  and  the  court  held  the 
assured  excused.  Here  there  was  no  statute  and  no  contract  to  pay 
or  receive  the  premiums  at  the  place  where  they  were  paid. 

There  were  three  notices  produced  for  the  years  1853,  1853,  and 
1855,  which  stated  the  time  when  the  premiums  for  those  years  were 
due,  and  that  they  must  be  paid  at  the  office  of  the  Fayetteville 
agency  within  thirty  days  or  the  policy  would  be  void,  but  two  of 
them  stated  that  the  notice  was  not  required  by  the  rules  of  the 
society,  and  that  the  want  of  it  would  not  excuse  non-payment.  It 
was  not  a  notice  that  all  premiums  must  be  paid  at  Fayetteville,  but 
that  those  specified  must  be.  The  notices  would  have  justified  such 
payments  so  long  as  defendant  had  an  agent  there,  but  cannot  be 
construed  into  a  contract  that  the  company  must  always  have  an 
agent  at  that  place,  or  that  payments  might  always  be  made  there. 

We  think  the  General  Term  right  in  holding  that  the  referee  erred 
in  finding  the  payments  for  the  specified  years  duly  made.  This  is 
irrespective  of  the  effect  of  the  war  upon  the  transaction,  but  it  dis- 

'  See  Deakin  v.  Underwood,  37  Minn.  98,  ante,  p.  43. 


CHAP.   VI.]  IRREVOCABLE  AGENCIES.  191 

poses  of  the  findings  of  the  referee,  which  were  reversed  by  the 
General  Term.  .  .  . 

[The  court  then  held  that  payments  to  the  New  York  ofl&ce  would 
have  been  unlawful  during  the  progress  of  the  Civil  War,  and  that 
the  failure  to  pay  the  premiums  in  1862,  1863,  and  1864  did  not 
therefore  forfeit  the  policy.] 

The  order  granting  a  new  trial  must  be  reversed,  and  judgment 
of  referee  modified,  by  deducting  the  premiumc  payable  in  1863, 
1863,  and  1864,  with  interest,  and,  as  modified,  affirmed  without 
costs  to  either  party  as  against  the  other. 

All  concur,  except  Grover,  J.,  not  voting. 

Judgment  accordingly. 


4.    Irrevocable  Agencies. 
BLACKSTONE   v.   BUTTERMORE. 

63  Pa.  St.  266.     1866. 

Ejectment.  Verdict  and  judgment  for  defendant.  Plaintiff 
appeals. 

Buttermore  gave  to  one  Davidson  a  power  of  attorney  to  sell  the 
land  in  question,  such  instrument  declaring  that  "  this  authority  is 
irrevocable  before  the  first  day  of  May  next."  In  April,  Davidson 
sold  the  land  to  plaintiif,  but  defendant  refused  to  perform.  There 
was  evidence  that  defendant  had  revoked  the  power  before  the  sale 
to  plaintiff,  and  that  plaintiff  had  notice  of  the  revocation.  The 
court  charged  that  the  power  was  revocable,  and  that  if  it  was  re- 
voked and  plaintiff  had  notice  of  it,  he  could  not  recover. 

Agnew,  J.  We  have  decided  the  substantial  point  in  this  case 
at  the  present  term  upon  the  appeal  of  Hartley  and  Minor  from  the 
Orphans'  Court  of  Greene  County,  opinion  by  Thompson,  J,,  53 
Pa.  St.  212. 

A  power  of  attorney  constituting  a  mere  agency  is  always  revoc- 
able. It  is  only  when  coupled  with  an  interest  in  the  thing  itself,  or 
the  estate  which  is  the  subject  of  the  power,  it  is  deemed  to  be  irrev- 
ocable, as  where  it  is  a  security  for  money  advanced  or  is  to  be  used 
as  a  means  of  effectuating  a  purpose  necessary  to  protect  the  rights 
of  the  agent  or  others.  A  mere  power  like  a  will  is  in  its  very 
nature  revocable  when  it  concerns  the  interest  of  the  principal  alone, 
and  in  such  case  even  an  express  declaration  of  irrevocability  will 
not  prevent  revocation.  An  interest  in  the  proceeds  to  arise  as  mere 
compensation  for  the  service  of  executing  the  power  will  not  make 
the  power  irrevocable.  Therefore,  it  has  been  held  that  a  mere  em- 
ployment to  transact  the  business  of  the  principal  is  not  irrevocable 


192  CHAMBERS   V.   SEAT.  [CHAP.   VI. 

without  an  express  covenant  founded  on  suflBcient  consideration, 
notwithstanding  the  compensation  of  the  agent  is  to  result  from  the 
business  to  be  performed  and  to  be  measured  by  its  extent.  Coflfin 
V.  Landis,  10  Wright,  426.  In  order  to  make  an  agreement  for 
irrevocability  contained  in  a  power  to  transact  business  for  the  bene- 
fit of  the  principal  binding  on  him,  there  must  be  a  consideration 
for  it  independent  of  the  compensation  to  be  rendered  for  the  ser- 
vices to  be  performed.  In  this  case,  the  object  of  the  principal  was 
to  make  sale  solely  for  his  own  benefit.  The  agreement  to  give  his 
agent  a  certain  sum  and  a  portion  of  the  proceeds,  was  merely  to 
carry  out  his  purpose  to  sell.  But  what  obligation  was  there  upon 
him  to  sell,  or  what  other  interest  beside  his  own  was  to  be  secured 
by  the  sale  ?  Surely  his  determination  to  sell  for  his  own  ends  alone 
was  revocable.  If  the  reasons  for  making  a  sale  had  ceased  to  exist, 
or  he  should  find  a  sale  injurious  to  his  interests,  who  had  a  right 
to  say  he  should  not  change  his  mind  ?  The  interest  of  the  agent  was 
only  in  his  compensation  for  selling,  and  without  a  sale  this  is  not 
earned.  A  revocation  could  not  injure  him.  If  he  had  expended 
money,  time,  or  labor,  or  all,  upon  the  business  intrusted  to  him, 
the  power  itself  was  a  request  to  do  so,  and  on  a  revocation  would 
leave  the  principal  liable  to  him  on  his  implied  assumpsit.  But  it 
would  be  the  height  of  injustice  if  the  power  should  be  held  to  be 
irrevocable  merely  to  secure  the  agent  for  his  outlay  or  his  services 
rendered  before  a  sale.  The  following  authorities  are  referred  to: 
Hunt  V.  Eousmanier,  8  Wlieat.  174;  Story  on  Agency,  §§  463,  464, 
465,  468,  476,  477 ;  Paley  on  Agency,  155 ;  1  Parsons  on  Cont.  59 ; 
Irwin  V.  Workman,  3  Watts,  357 ;  Smyth  v.  Craig,  3  W.  &  S.  20. 

The  judgment  is  therefore  affirmed. 


CHAMBERS   v..  SEAY. 

73  Ala.  372.     1882. 

Action  for  commissions.  Judgment  for  defendant.  [A  demurrer 
for  the  misjoinder  of  counts  for  breach  of  contract  and  counts  in 
assumpsit  for  work  and  labor  was  sustained  and  the  latter  counts 
were  withdrawn.] 

SoMERViLLE,  J.  The  main  contention  in  this  case  involves  the 
right  of  the  principal  to  revoke  the  agent's  authority  to  sell,  so  as 
to  deprive  the  latter  of  his  commissions. 

The  agreement,  which  is  the  basis  of  this  suit,  is  in  writing,  bear- 
ing date  February  28,  1878,  and  is  signed  by  both  the  plaintiff  and 
defendant.  Its  substance  is  briefly  as  follows :  Seay  was  the  owner 
of  a  tract  of  land  in  Talladega  county,  valuable  for  the  quantity  of 
iron  ore  it  was  known  to  contain.    He  placed  this  land  in  the  hands 


CHAP.   VI.]  IRREVOCABLE   AGENCIES.  193 

of  Chambers  for  sale,  subject  to  Seay's  ratification,  if  he  (Seay) 
should  "deem  the  price  to  be  paid  for  said  property  sufficient  to 
warrant  a  sale."  Chambers,  on  his  part,  agreed  to  undertake  the 
sale  of  the  land,  and  to  this  end  undertook  and  promised  to  transport 
specimens  of  ore  taken  from  it  to  Birmingham,  England,  for  inspec- 
tion there;  and  also  to  advertise  the  property  in  one  respectable 
paper  in  each  of  the  cities  of  Birmingham  and  London,  England. 
By  way  of  compensation  for  his  services  and  expenses,  it  was  stipu- 
lated that  Chambers  should  receive  "  an  undivided  one-fourth  interest 
in  the  proceeds  of  sale  when  sold  as  aforesaid,"  and  his  right  to  sell 
was  made  "  exclusive." 

The  evidence  tends  to  show  that  Seay  revoked  the  agency  of  Cham- 
bers in  January,  1880,  and  very  soon  afterwards  himself  sold  the 
property  to  one  Glidden  for  the  sum  of  twenty  thousand  dollars. 
The  circuit  court  charged  the  jury,  that  the  agreement  in  question 
was  a  mere  revocable  agency,  which  could  be  recalled  by  the  prin- 
cipal, Seay,  at  any  time  before  it  had  been  executed  by  his  making 
a  sale  of  the  property;  and  if  it  was  so  revoked  prior  to  the  sale 
made  by  Seay  to  Glidden,  then  Chambers  was  not  entitled  to  recover 
any  commissions. 

The  rule  is  not  denied,  that,  in  ordinary  cases,  a  principal,  who 
has  empowered  an  agent  to  sell,  may  at  any  time  before  sale  revoke 
the  agent's  authority.  It  is  equally  true  that  the  usual  theory  of 
commissions  is,  that  the  agent  is  to  receive  them  only  in  event  of 
success.    Wood's  Mayne  on  Damages  (Amer.  ed.),  §§  746-747. 

It  is  argued  that  the  present  agreement  does  not  come  within  this 
.general  rule,  because  it  confers  on  the  agent  a  power  coupled  with 
an  interest,  and  that  such  a  power  is  irrevocable.  It  is  a  generally 
admitted  proposition  of  law,  that  a  principal  is  not  permitted  to 
revoke  the  authority  of  his  agent,  where  such  authority  is  coupled 
with  an  interest,  or  where  it  is  necessary  to  effectuate  a  security. 
Ewell's  Evans  on  Agency,  marg.  page  83.  These  are  the  two  estab- 
lished exceptions,  which  seem,  indeed,  to  be  essentially  similar  in 
principle.  It  is  contended  that  the  agency  of  the  plaintiff.  Chambers, 
comes  within  the  influence  of  the  first  exception,  as  being  coupled 
with  an  interest,  and  it  was  not  competent,  therefore,  for  Seay  to 
revoke  it.  It  is  not  any  interest,  however,  that  will  suffice  to  render 
an  agency  irrevocable.  An  interest  in  the  proceeds  of  sale,  or  money 
derived  from  the  sale  of  property  by  an  agent  is  not  sufficient  for 
this  purpose.  Barr  v.  Schroeder,  32  Cal.  609 ;  Hartley's  Appeal,  53 
Penn.  St.  213;  Gilbert  v.  Holmes,  64  111.  549.  To  be  irrevocable, 
it  seems  now  well  settled,  that  the  power  conferred  must  create  an 
interest  in  the  thing  itself,  or  in  the  property  which  is  the  subject  of 
the  power.  In  other  words,  "  the  power  and  estate  must  be  united 
and  co-existent,"  and,  possibly,  of  such  a  nature  that  the  power  would 
survive  the  principal  in  the  event  of  the  latter's  death,  so  as  to  be 

13 


194  CHAMBERS   V.   SEAT.  [CHAP.   VI. 

capable  of  execution  in  the  name  of  the  agent.  Blackstone  v.  Butter- 
more,  53  Penn.  St.  266;  Bonney  v.  Smith,  17  111.  531;  Mansfield  v. 
Mansfield,  6  Conn.  559;  Hunt  v.  Eousmanier,  8  Wheat.  174;  Evans 
on  Agency  (Ewell),  marg.  page  83,  note,  and  p.  85;  Raleigh  v.  At- 
kinson, 6  M.  &  W.  670.  In  Hunt  v.  Eousmanier,  supra,  such  a  power 
was  denied  by  Chief  Justice  Marshall  to  be  one  "engrafted  on  an 
estate  in  the  thing  itself." 

The  power  conferred  on  Chambers  was  not  of  this  nature  very 
clearly.  He  had  no  interest  in  the  subject-matter  of  his  agency,  the 
land  itself.  He  was  interested  only  in  the  money  to  be  derived  as 
the  proceeds  of  the  sale  of  the  land,  which  could  only  be  realized  by 
the  completion  of  his  agency,  or  by  some  negotiation  which  was 
tantamount  to  it.  He  had  parted  with  no  money,  or  other  value, 
for  the  security  of  which  the  power  of  sale  was  conferred  in  the 
agreement.  He  had  risked  in  the  venture  of  his  agency  only  his 
personal  services  and  the  expenses  incidental  to  its  execution.  The 
undertaking  to  export  specimens  of  iron  ore  to  England,  and  to 
advertise  the  lands  there,  may  be  embraced  as  a  part  of  the  ordinary 
expense  to  be  incurred  in  the  usual  course  of  such  an  employment. 
It  is  fair  to  presume  that  he  risked  this  much  in  view  of  the  large 
compensation  to  be  reaped  as  commissions,  in  the  event  of  a  suc- 
cessful sale.     Simpson  v.  Lamb,  17  C.  B.  603. 

It  is  insisted  further  that  the  agency  is  rendered  irrevocable  by 
reason  of  the  fact  that  the  power  of  sale  conferred  on  Chambers 
was  stipulated  to  be  exclusive.  This  can  not  be  stronger  than 
the  use  of  the  word  "  irrevocable,"  which  has  been  construed  to 
fail  of  such  a  purpose,  unless  the  agency  comes  within  the  excep- 
tions above  discussed.  In  the  case  of  a  naked  power,  an  express 
declaration  of  irrevocability  will  not  prevent  revocation.  McGregor 
V.  Gardner,  14  Iowa,  326;  Blackstone  v.  Buttermore,  53  Penn. 
St.  266. 

The  chief  difficulty  arises  in  those  cases  where  the  agent  has  in- 
curred trouble  and  expense  in  the  execution  of  his  agency,  and  has 
been  prevented  from  effecting  a  sale  by  the  interference  of  his  prin- 
cipal, whether  by  revocation  of  his  authority,  or  otherwise.  It  is 
not  just,  it  is  true,  for  a  principal  to  revoke  an  agent's  authority 
without  paying  him  for  labor  and  expense  reasonably  incurred  in 
the  course  of  the  agent's  emplojonent.  Unless  otherwise  stipulated, 
the  agent  may,  in  a  proper  form  of  action,  ordinarily  claim  reim- 
bursement for  the  value  of  these.  Evans'  Agency  (Ewell),  marg. 
pages  83-84.  So  where  a  sale  of  property  is  brought  about  by  the 
advertisements  or  exertions  of  a  broker  or  agent,  the  broker  being 
the  efficient  cause  of  the  sale,  and  the  purchaser  being  found  through 
his  instrumentality,  he  may  often  recover  his  commissions.  Suss- 
dorff  V.  Schmidt,  55  N.  Y.  319 ;  Earp  v.  Cummins,  54  Penn.  St.  394. 
These  are  mentioned  as  just  qualifications  of  the  general  rule,  ta 


CHAP.   VI.]  IRREVOCABLE  AGENCIES.  195 

which  we  have  above  adverted,  touching  the  subject  of  the  revocation 
of  an  agent's  authority  by  his  principal. 

The  pleadings  in  the  present  case,  upon  which  it  was  tried,  are 
framed  very  clearly  with  reference  to  a  recovery  of  the  stipulated 
commissions  promised  to  Chambers,  and  the  gravamen  of  the  action 
is,  in  effect,  alleged  to  be  the  wrongful  revocation  of  the  agency  by 
act  of  the  principal.  We  need  not,  for  this  reason,  discuss  the  ques- 
tion as  to'the  plaintiff's  right  to  recover  for  the  value  of  his  services, 
or  for  expenses  incurred.  The  first  and  fifth  counts  were  obviously 
actions  on  the  case,  and  the  other  counts  were  in  assumpsit.  Myers 
V.  Gilbert,  18  Ala.  467.  The  demurrer  for  misjoinder  was  conse- 
quently well  taken,  and  was  properly  sustained  by  the  court. 

The  rulings  of  the  circuit  court  were  in  accordance  with 
the  above  views,  and  its  judgment  mv^t  he  affirmed. 


HUNT   vr  ROUSMANIBE'S   ADMINISTEATOES. 

8  Wheat.  (U.  S.)  174.     1823. 

Bill  in  equity  to  compel  defendants,  as  administrators,  to  join 
in  the  sale  of  the  intestate's  interest  in  two  vessels.  Demurrer  to 
the  bill  sustained  and  the  bill  dismissed.    Plaintiff  appeals. 

Rousmanier  executed  to  Hunt  a  power  of  attorney  authorizing 
Hunt  to  sell  and  convey  Rousmanier's  interest  in  the  two  vessels, 
and  after  paying  two  notes  owing  from  Rousmanier  to  Hunt,  to 
return  the  residue  to  Rousmanier.  Rousmanier  died  before  the  pay- 
ment in  full  of  the  two  notes.  Hunt  took  possession  of  the  vessels 
and  was  proceeding  to  sell  them  when  defendants  forbade  the  sale. 

Mr.  Chief  Justice  Marshall  delivered  the  opinion  of  the  court. 

The  counsel  for  the  appellant  objects  to  the  decree  of  the  circuit 
court  on  two  grounds.    He  contends,  — 

1.  That  this  power  of  attorney  does,  by  its  own  operation,  entitle 
the  plaintiff,  for  the  satisfaction  of  his  debt,  to  the  interest  of  Rous- 
manier in  the  Nereus  and  the  Industry. 

2.  Or,  if  this  be  not  so,  that  a  court  of  chancery  will,  the  con- 
veyance being  defective,  lend  its  aid  to  carry  the  contract  into  execu- 
tion, according  to  the  intention  of  the  parties. 

We  will  consider,  1.   The  effect  of  the  power  of  attorney. 

This  instrument  contains  no  words  of  conveyance  or  of  assign- 
ment, but  is  a  simple  power  to  sell  and  convey.  As  the  power  of 
one  man  to  act  for  another  depends  on  the  will  and  license  of  that 
other,  the  power  ceases  when  the  will,  or  this  permission,  is  with- 
drawn. The  general  rule,  therefore,  is,  that  a  letter  of  attorney  may, 
at  any  time,  be  revoked  by  the  party  who  makes  it,  and  is  revoked 
by  his  death.    But  this  general  rule,  which  results  from  the  nature 


196  HUNT  V.   ROUSMANIER's   administrators.        [chap.   VI. 

of  the  act,  has  sustained  some  modification.  Where  a  letter  of 
attorney  forms  a  part  of  a  contract,  and  is  a  security  for  money,  or 
for  the  performance  of  any  act  which  is  deemed  valuable,  it  is  gen- 
erally made  irrevocable  in  terms,  or  if  not  so,  is  deemed  irrevocable 
in  law.  2  Esp.  N.  P.  Eep.  565.  Although  a  letter  of  attorney  de- 
pends, from  its  nature,  on  the  will  of  the  person  making  it,  and  may, 
in  general,  be  recalled  at  his  will,  yet  if  he  binds  himself  for  a  con- 
sideration, in  terms,  or  by  the  nature  of  his  contract,  not  to  change 
his  will,  the  law  will  not  permit  him  to  change  it.  Rousmanier, 
therefore,  could  not,  during  his  life,  by  any  act  of  his  own,  have 
revoked  this  letter  of  attorney.  But  does  it  retain  its  efficacy  after 
his  death?  We  think  it  does  not.  We  think  it  well  settled,  that  a 
power  of  attorney,  though  irrevocable  during  the  life  of  the  party, 
becomes  extinct  by  his  death. 

This  principle  is  asserted  in  Littleton  (sec.  Q6),  by  Lord  Coke, 
in  his  commentary  on  that  section  (52  b),  and  in  Willes'  Reports 
(105,  note,  and  565).  The  legal  reason  of  the  rule  is  a  plain  one. 
It  seems  founded  on  the  presumption,  that  the  substitute  acts  by 
virtue  of  the  authority  of  his  principal,  existing  at  the  time  the  act 
is  performed;  and  on  the  manner  in  which  he  must  execute  his 
authority,  as  stated  in  Coombes'  case,  9  Co.  766.  In  that  case  it 
was  resolved,  that  "  when  any  has  authority  as  attorney  to  do  any 
act,  he  ought  to  do  it  in  his  name  who  gave  the  authority."  The 
reason  of  this  resolution  is  obvious.  The  title  can,  regularly,  pass 
out  of  the  person  in  whom  it  is  vested,  only  by  a  conveyance  in  his 
own  name;  and  this  cannot  be  executed  by  another  for  him,  when 
it  could  not,  in  law,  be  executed  by  himself.  A  conveyance  in  the 
name  of  a  person  who  was  dead  at  the  time  would  be  a  manifest 
absurdity. 

This  general  doctrine,  that  a  power  must  be  executed  in  the  name 
of  a  person  who  gives  it,  a  doctrine  founded  on  the  nature  of  the 
transaction,  is  most  usually  engrafted  in  the  power  itself.  Its  usual 
language  is,  that  the  substitute  shall  do  that  which  he  is  empowered 
to  do  in  the  name  of  his  principal.  He  is  put  in  the  place  and  stead 
of  his  principal,  and  is  to  act  in  his  name.  This  accustomed  form 
is  observed  in  the  instrument  under  consideration.  Hunt  is  con- 
stituted the  attorney,  and  is  authorized  to  make  and  execute  a  regular 
bill  of  sale  in  the  name  of  Rousmanier.  Now,  as  an  authority  must 
be  pursued  in  order  to  make  the  act  of  the  substitute  the  act  of  the 
principal,  it  is  necessary  that  this  bill  of  sale  should  be  in  the  name 
of  Rousmanier ;  and  it  would  be  a  gross  absurdity  that  a  deed  should 
purport  to  be  executed  by  him,  even  by  attorney,  after  his  death; 
for  the  attorney  is  in  the  place  of  the  principal,  capable  of  doing 
that  alone  which  the  principal  might  do. 

This  general  rule,  that  a  power  ceases  with  the  life  of  the  person 
giving  it,  admits  of  one  exception.    If  a  power  be  coupled  with  an 


CHAP.    VI.]  IRREVOCABLE   AGENCIES.  197 

"interest,"  it  survives  the  person  giving  it,  and  may  be  executed 
after  his  death. 

As  this  proposition  is  laid  down  too  positively  in  the  books  to  be 
controverted,  it  becomes  necessary  to  inquire  what  is  meant  by  the 
expression,  "  a  power  coupled  with  an  interest  ?  "  Is  it  an  interest 
in  the  subject  on  which  the  power  is  to  be  exercised,  or  is  it  an  in- 
terest in  that  which  is  produced  by  the  exercise  of  the  power?  We 
hold  it  to  be  clear  that  the  interest  which  can  protect  a  power  after 
the  death  of  a  person  who  creates  it,  must  be  an  interest  in  the  thing 
itself.  In  other  words,  the  power  must  be  engrafted  on  an  estate 
in  the  thing. 

The  words  themselves  would  seem  to  import  this  meaning.  "  A 
power  coupled  with  an  interest "  is  a  power  which  accompanies,  or  is 
connected  with,  an  interest.  The  power  and  the  interest  are  united  in 
the  same  person.  But  if  we  are  to  understand  the  word  "  interest," 
an  interest  in  that  which  is  to  be  produced  by  the  exercise  of  the 
power,  then  they  are  never  united.  The  power,  to  produce  the  in- 
terest, must  be  exercised,  and  by  its  exercise  is  extinguished.  The 
power  ceases  when  the  interest  commences,  and  therefore  cannot,  in 
accurate  law  language,  be  said  to  be  "coupled"  with  it. 

But  the  substantial  basis  of  the  opinion  of  the  court  on  this  point 
is  found  in  the  legal  reason  of  the  principle.  The  interest  or  title  in 
the  thing  being  vested  in  the  person  who  gives  the  power,  remains 
in  him,  unless  it  be  conveyed  with  the  power,  and  can  pass  out  of 
him  only  by  a  regular  act  in  his  own  name.  The  act  of  the  sub- 
stitute, therefore,  which  in  such  a  case  is  the  act  of  the  principal, 
to  be  legally  effectual  must  be  in  his  name,  must  be  such  an  act  as 
the  principal  himself  would  be  capable  of  performing,  and  which 
would  be  valid  if  performed  by  him.  Such  a  power  necessarily  ceases 
with  the  life  of  the  person  making  it.  But  if  the  interest  or  estate 
passes  with  the  power,  and  vests  in  the  person  by  whom  the  power 
is  to  be  exercised,  such  a  person  acts  in  his  own  name.  The  estate, 
being  in  him,  passes  from  him  by  a  conveyance  in  his  own  name. 
He  is  no  longer  a  substitute,  acting  in  the  place  and  name  of  another, 
but  is  a  principal  acting  in  his  own  name,  in  pursuance  of  powers 
which  limit  his  estate.  The  legal  reason  which  limits  a  power  to 
the  life  of  the  person  giving  it  exists  no  longer,  and  the  rule  ceases 
with  the  reason  on  which  it  is  founded.  The  intention  of  the  in- 
strument may  be  effected  without  violating  any  legal  principle. 

This  idea  may  be  in  some  degree  illustrated  by  the  examples  of 
cases  in  which  the  law  is  clear,  and  which  are  incompatible  with  any 
other  exposition  of  the  term,  "  power  coupled  with  an  interest."  If 
the  word  "  interest "  thus  used  indicated  a  title  to  the  proceeds  of 
the  sale,  and  not  a  title  to  the  thing  to  be  sold,  then  a  power  to  A. 
to  sell  for  his  own  benefit,  would  be  a  power  coupled  with  an  in- 
terest; but  a  power  to  A.  to  sell  for  the  benefit  of  B.  would  be  a 


198  HUNT  V.   EOUSMANIER's   ADM'BS.  [chap.   VI. 

naked  power,  which  could  be  executed  only  in  the  life  of  the  person 
who  gave  it.  Yet  for  this  distinction  no  legal  reason  can  be  assigned. 
Nor  is  there  any  reason  for  it  in  justice;  for  a  power  to  A.  to  sell 
for  the  benefit  of  B.  may  be  as  much  a  part  of  the  contract  on  which 
B.  advances  his  money  as  if  the  power  had  been  made  to  himself. 
If  this  were  the  true  exposition  of  the  term,  then  a  power  to  A.  to 
sell  for  the  use  of  B.,  inserted  in  a  conveyance  to  A.,  of  the  thing 
to  be  sold,  would  not  be  a  power  coupled  with  an  interest,  and  con- 
sequently could  not  be  exercised  after  the  death  of  the  person  making 
it ;  while  a  power  to  A.  to  sell  and  pay  a  debt  to  himself,  though  not 
accompanied  with  any  conveyance  which  might  vest  the  title  in  him, 
would  enable  him  to  make  the  conveyance,  and  to  pass  a  title  not  in 
him,  even  after  the  vivifying  principle  of  the  power  had  become 
extinct.  But  every  day's  experience  teaches  us  that  the  law  is  not 
as  the  first  case  put  would  suppose.  We  know  that  a  power  to  A. 
to  sell  for  the  benefit  of  B.,  engrafted  on  an  estate  conveyed  to  A., 
may  be  exercised  at  any  time,  and  is  not  affected  by  the  death  of 
the  person  who  created  it.  It  is,  then,  a  power  coupled  with  an 
interest,  although  the  person  to  whom  it  is  given  has  no  interest 
in  its  exercise.  His  power  is  coupled  with  an  interest  in  the  thing 
which  enables  him  to  execute  it  in  his  own  name,  and  is,  therefore, 
not  dependent  on  the  life  of  the  person  who  created  it. 

The  general  rule,  that  a  power  of  attorney,  though  irrevocable 
by  the  party  during  his  life,  is  extinguished  by  his  death,  is  not 
affected  by  the  circumstance  that  testamentary  powers  are  executed 
after  the  death  of  the  testator.  The  law,  in  allowing  a  testament- 
ary disposition  of  property,  not  only  permits  a  will  to  be  con- 
sidered as  a  conveyance,  but  gives  it  an  operation  which  is  not 
allowed  to  deeds  which  have  their  effect  during  the  life  of  the  per- 
son who  executes  them.  An  estate  given  by  will  may  take  effect 
at  a  future  time  or  on  a  future  contingency,  and  in  the  meantime 
descends  to  the  heir.  The  power  is  necessarily  to  be  executed  after 
the  death  of  the  person  who  makes  it,  and  cannot  exist  duriag  his 
life.  It  is  the  intention  that  it  shall  be  executed  after  his  death. 
The  conveyance  made  by  the  person  to  whom  it  is  given  takes 
effect  by  virtue  of  the  will,  and  the  purchaser  holds  his  title  under 
it.  Every  case  of  a  power  given  in  a  will  is  considered  in  a  court 
of  chancery  as  a  trust  for  the  benefit  of  the  person  for  whose  use 
the  power  is  made,  and  as  a  devise  or  bequest  to  that  person. 

It  is,  then,  deemed  perfectly  clear  that  the  power  given  in  this 
case  is  a  naked  power,  not  coupled  with  an  interest,  which,  though 
irrevocable  by  Rousmanier  himself,  expired  on  his  death. 

(The  court  then  decides  that  upon  the  facts  alleged  in  the  bill 
a  court  of  equity  may  give  relief  as  for  mistake  and  subject  the 
vessels  to  an  equitable  lien  in  favor  of  the  appellant.  Upon  this 
ground  the  decree  was)  Reversed. 


CHAP.   VI.]  IRREVOCABLE   AGENCIES.  199 

Chancellor  Walworth  in  Knapp  v.  Alvord,  10  Paige's  Ch. 
(N.  Y.)  205.  1843.  As  the  possession  of  the  property  was  deliv- 
ered to  Meads,  in  connection  with  this  power  to  dispose  of  it  for  the 
security  and  protection  of  himself  and  the  other  indorsers,  the  prop- 
erty must  be  considered  as  pledged  to  him  for  that  purpose.  The 
power  to  sell,  therefore,  was  coupled  with  an  interest  in  the  property 
thus  pledged,  and  survived.  Bergen  v.  Bennett,  1  Cai.  Cas.  in  Err. 
1;  Raymond  v.  Squire,  11  Johns.  47.  In  the  case  decided  by  the 
Supreme  Court  of  the  United  States  (Hunt  v.  Rousmanier,  8  Wheat. 
174)  there  was  no  actual  pledge  of  the  property;  but  a  mere  power 
of  attorney  was  executed  authorizing  the  plaintiff  to  transfer  it 
in  the  name  of  Rousmanier.  It  was  upon  that  ground,  as  I  under- 
stand the  case,  that  Chief  Justice  Marshall  held  that  the  power  was 
not  coupled  with  any  interest  in  the  vessels.  And  I  presume  his 
opinion  upon  that  point  would  have  been  different  if  the  power 
had  been  accompanied  by  an  actual  delivery  of  the  vessels  as  a  pledge 
for  the  payment  of  the  debt.  But  even  in  that  case  the  court  pro- 
tected the  rights  of  Hunt  as  an  equitable  mortgagee  of  the  vessels, 
though  the  decision  was  placed  on  the  debatable  ground  that  a  party 
may  be  relieved  in  equity  against  a  mistake  of  law  merely.  .  .  . 


TERWILLIGER  v.   ONTARIO,   etc.,   R.   CO. 

149  N.  Y.  86.     1896. 

Action  for  the  purchase  price  of  railroad  ties.  The  defence  was 
that  plaintiff,  having  cut  other  timber  on  the  lands  of  one  Wheeler, 
gave  him  oral  authority  to  sell  these  ties  and  pay  himself  out  of  the 
proceeds,  and  that  Wheeler  did  sell  them  to  defendant  and  was  paid 
therefor.  The  trial  court  found  that  if  such  authority  was  ever  given 
it  was  revoked  before  the  authority  was  exercised,  and  gave  judgment 
for  the  plaintiff. 

Andrews,  Ch.  J.  .  .  .  The  distinction  between  the  cases  of  a 
power  given  for  the  purpose  of  security  and  a  power  given  for  the 
same  purpose,  but  supplemented  by  a  transfer  of  an  interest,  seems 
technical;  but  in  the  latter  case  it  at  least  preserves  the  substance 
and  effectuates  the  intent,  while  it  obviates  in  the  particular  case 
the  general  doctrine  that  a  power  is  determined  by  the  death  of 
the  creator  of  the  power.  In  Watson  v.  King,. 4  Camp.  272,  Lord 
Ellenborough,  in  a  case  very  similar  to  that  of  Hunt  v.  Rousmanier, 
also  held  that  a  power  of  attorney  to  a  creditor  to  sell  a  vessel  was 
revoked  by  the  death  of  the  principal,  and  upon  the  same  ground, 
namely,  that  it  could  not  thereafter  be  executed  in  his  name.    The 


200  TEEWILLIGER   V.   ONTARIO,   ETC.,    R.    CO.  [CHAP.    VI. 

eame  point  was  ruled  in  equity  in  Lepard  v.  Vernon,  2  Ves.  &  B. 
51,  where  it  was  held  that  a  power  given  to  a  creditor  to  receive  a 
debt,  expressly  for  the  purpose  of  liquidating  the  claim,  unaccom- 
panied, however,  by  any  assignment  of  the  debt,  was  revoked  by  the 
death  of  the  principal.  Knapp  v.  Alvord,  10  Paige,  205,  is  an 
illustration  of  a  power  coupled  with  an  interest.  .  .  .  But  there 
are  a  class  of  powers  which  are  irrevocable  by  the  act  of  the  prin- 
cipal, although  they  do  not  come  within  Chief  Justice  Marshall's 
definition  of  powers  coupled  with  an  interest.  This  is  clearly 
recognized  by  that  eminent  judge  in  the  case  to  which  reference  has 
been  made.  After  stating  the  general  rule  that  a  power  may  at 
any  time  be  revoked  by  the  party  conferring  it,  he  says ;  "  But  this 
general  rule  which  results  from  the  nature  of  the  act  has  sustained 
some  modification.  Where  a  letter  of  attorney  forms  part  of  a  con- 
tract and  is  security  for  money,  or  for  the  performance  of  any  act 
which  is  deemed  valuable,  it  is  generally  made  irrevocable  in  terms, 
or  if  not  so  is  deemed  irrevocable  in  law,"  and  he  proceeds  to  state 
that  the  power  to  sell  the  vessel  by  Eousmanier  in  that  case  could  not 
have  been  revoked  by  him  during  his  life,  but  not  being  a  power 
coupled  with  an  interest  it  was  revoked  by  his  death.  Kent  uses 
similar  language.  He  says  (2  Kent  Comm.  644):  "But  where 
it  (power  of  attorney)  constitutes  part  of  a  security  for  money,  or 
is  necessary  to  give  effect  to  such  security,  or  where  it  is  given  for 
a  valuable  consideration,  it  is  not  revocable  by  the  party  himself, 
though  it  is  necessarily  revoked  by  his  death."  And  Story  in  his 
work  on  Bailment  (§  209)  says:  "But  if  it  is  given  as  part  of 
a  security,  as  if  a  letter  of  attorney  is  given  to  collect  a  debt  as  a 
security  for  money  advanced,  it  is  irrevocable  by  the  party."  This 
doctrine  has  support  in  adjudged  cases.  Hunt  v.  Eousmanier, 
8  Wheat.  174;  Walsh  v.  Whitcomb,  2  Esp.  566;  Gaussen  v.  Morton, 
10  B.  &  C.  731;  Hutchins  v.  Hebbard,  34  N.  Y.  24;  Wilde,  C. 
J.,  Smart  v.  Sandars,  5  C.  B.  895;  Eaymond  v.  Squire,  11  John. 
47.  In  the  cases  referred  to  the  authority  was  conferred  by  formal 
written  powers  of  attorney.  But  unless  an  authority  given  is  for 
the  performance  of  some  act  which  by  statute  or  by  the  common 
law  the  agent  cannot  perform  in  the  name  of  his  principal  unless 
thereunto  authorized  in  writing,  we  can  perceive  no  legal  distinction 
in  the  application  of  the  doctrine,  between  formal  written  power 
and  an  informal  oral  authority.  ...  If  the  authority  is  given  as 
a  security  and  based  upon  a  suflficient  consideration,  so  that  if  it 
had  been  in  writing  it  would  have  been  irrevocable,  there  is  no 
reason  in  law  why  the  oral  authority  should  not  be  irrevocable 
also.  ...  In  Hutchins  v.  Hebbard,  supra,  the  written  power  author- 
ized the  attorney  to  collect  and  receive  certain  moneys  from  the 
state.  It  was  on  its  face  a  mere  naked  power,  revocable  at  the 
pleasure  of  the  principal.     But  it  was  held  that  oral  proof  was 


CHAP.   VI.]  IRREVOCABLE  AGENCIES.  201 

admissible  to  show  that  it  was  intended  as  a  security  for  indorse- 
ments made  by  the  person  to  whom  the  power  was  given,  and  upon 
the  proof  of  this  fact  his  right  to  the  fund  was  established.  .  .  . 
If  the  authority  to  Wheeler  was  irrevocable,  it  was  because  of  the 
nature,  consideration  and  purpose  for  which  the  agency  was  consti- 
tuted. Unless  there  was  a  consideration  for  the  authority  conferred 
on  Wheeler  to  sell  the  ties  and  apply  the  proceeds  on  his  claim,  it 
is  plain  that  it  was  not  irrevocable.  Kaleigh  v.  Atkinson,  6  M.  & 
W.  670.  Without  going  into  particulars,  it  is  sufficient  to  say  that 
the  evidence  given  on  the  part  of  the  defendant  would,  in  our 
opinion,  justify  an  inference  that  Wheeler  accepted  the  arrangement 
proposed  by  the  plaintiff,  and  forbore  the  pursuit  of  his  lumber 
or  its  proceeds,  in  reliance  upon  the  authority  given  him  by  the 
plaintiff  to  sell  the  ties  and  apply  the  proceeds  on  his  claim.  .  .  . 
It  will  be  for  the  court  or  jury  on  a  new  trial  to  determine  upon  the 
facts  found  whether  there  was  any  valid  consideration  within  the 
law  applicable  to  executory  contracts,  to  uphold  the  authority.  If 
such  consideration  existed,  then  we  are  of  the  opinion  that  the 
authority  was  irrevocable,  and  that  the  payment  by  the  defendant 
to  Wheeler,  under  the  contract  made  with  him,  was  binding  upon 
the  plaintiff.  .  .  .  Judgment  reversed.^ 


STROTHEE   v.   LAW. 

64  111.  413.     1870. 

Mr.  Justice  Scott  delivered  the  opinion  of  the  court : 
The  plaintiff  in  error,  as  widow  of  Bolton  F.  Strother,  deceased, 
claims  the  right  to  redeem  and  have  dower  in  certain  premises 
described  in  the  bill,  which  were  sold  under  a  mortgage,  executed 
by  her  and  her  late  husband,  to  Van  H.  Higgins.  It  is  not  doubted 
that  the  mortgage,  in  its  execution  and  acknowledgement,  was  suffi- 

'  In  Pacific  Coast  Co.  v.  Anderson,  107  Fed.  978,  it  was  held  that  a  power  given 
for  a  valuable  consideration  and  to  secure  the  payment  of  money,  is  irrevocable  by 
the  act  of  the  grantor,  citing :  Hutching  v.  Hibbard,  34  N.  Y.  24  ;  Farmers,  etc.,  Bk. 
V.  Kansas  City  Pub.  Co.,  3  Dill.  287;  Clark  v.  Iron  Co.,  81  Fed.  310;  Hurley  v. 
Bendel,  67  Minn.  41 ;  In  re  Keys'  Estate,  137  Pa.  St.  565 ;  Montague  v.  McCarroll, 
15  Utah,  318. 

In  Stevens  v.  Sessa,  50  N.  Y.  App.  Dlv.  547,  where  A  borrowed  $2,000  of  B,  who 
had  charge  of  the  leasing  of  A's  property  and  collection  of  rents,  and  gave  B  author- 
ity to  collect  the  rents  and  apply  them  on  the  loan,  it  was  held  that  this  was  a 
power  coupled  with  an  interest  and  was  not  revoked  by  A  's  death.  See  also  Kelly 
V.  Bowerman,  113  Mich.  446. 

In  re  Hannan's,  etc.,  Co.,  [1896]  2  Ch.  643,  a  contract  with  the  agent  to  take  shares 
in  a  company  formed  to  purchase  the  agent's  property  and  an  authority  to  the  agent 
to  subscribe  for  the  shares  were  together  regarded  as  giving  the  agent  an  irrevocable 
authority  to  subscribe  for  the  principal.  "  Where  an  agreement  is  entered  into  on  a 
sufficient  consideration,  whereby  an  authority  is  given  for  the  purpose  of  securing 
some  benefit  to  the  donee  of  the  authority,  such  authority  is  irrevocable.  The  object 
was  to  enable  the  vendor  to  obtain  his  purchase  money,  and  It  therefore  conferred  a 
benefit  on  the  donee  of  the  authority." 


202  STROTHER  V.   LAW.  [CHAP.   VI. 

cient  to  convey  all  the  right,  title  and  interest  of  the  parties,  and 
to  bar  their  equity  of  redemption,  if  the  same  was  legally  fore- 
closed. It  was  sought  to  foreclose  the  mortgage  by  a  sale  out  of 
court,  under  a  clause  contained  therein,  conferring  an  irrevocable 
power  on  the  mortgagee  and  his  assigns  for  that  purpose.  A  sale 
was  made  under  the  authority  contained  in  the  mortgage,  and  deed 
executed  by  the  mortgagee  and  his  assignee  to  the  defendant's 
grantor.  The  words  used  in  the  habendum  are,  "  all  the  right,  title, 
interest,  claim,  demand,  and  equity,"  and  it  would  seem  that  the 
words  used  are  broad  and  comprehensive  enough  to  convey  all  possi- 
ble interest  the  parties  could  have  in  the  premises,  including  the 
equity  of  redemption. 

The  sale  was  not  made,  however,  until  after  the  death  of  the 
mortgagor,  Bolton  F.  Strother,  and  the  power  to  make  the  sale  after 
his  death  is  questioned.  It  is  true,  that  a  mere  simple  power,  or 
naked  power,  as  it  is  generally  termed,  to  do  a  thing  in  the  name 
of,  and  for  the  benefit  of,  another,  ceases  at  the  death  of  the  grantor. 
Such  is  a  letter  of  attorney. 

But  if  the  power  is  coupled  with  an  interest  on  an  estate  on  which 
the  power  is  to  be  exercised,  and  is  to  be  executed  in  the  name  of 
the  grantee,  then  such  power  is  deemed  a  part  of  the  estate,  and  is 
not  dependent  on  the  life  of  the  grantor.  And  of  this  nature 
is  a  power  to  sell  contained  in  a  mortgage  deed,  on  default  of 
payment.  Such  power  is  there  coupled  with  an  interest  in  the 
estate  itself,  and  does  not  become  inoperative  by  reason  of  the  death 
of  the  mortgagor.  The  case  of  Bergen  v.  Bennett,  1  Caine's  Cases, 
1,  is  in  point.  That  was  a  bill  filed  to  redeem  from  a  mortgage 
sale,  on  the  ground  that  the  power  was  executed  after  the  death 
of  the  mortgagor.  In  that  case,  the  party  mortgaged  the  estate 
as  collateral  security,  and  gave  authority  to  the  grantee  to  sell  the 
estate  absolutely;  and  the  court,  in  a  very  elaborate  opinion,  held 
that  the  grantee  might  sell  the  estate,  notwithstanding  the  death 
of  the  grantor.  The  court,  in  that  case,  defined  with  great  accuracy, 
the  distinction  betweeri  naked  powers,  and  powers  coupled  with  an 
interest.  The  learned  judge  says,  "  a  power  simply  collateral,  and 
without  interest,  or  a  naked  power,  is  when  to  a  mere  stranger 
authority  is  given  to  dispose  of  an  interest  in  which  he  had  not, 
before,  nor  hath  by  the  instrument  creating  the  power,  any  estate 
whatever.  But  when  power  is  given  to  a  person  who  derives  under 
the  instrument  creating  the  power,  or  otherwise,  the  present  or 
future  interest  in  the  land,  it  is  a  power  relating  to  the  land." 

In  the  case  of  Hunt  v.  Eousmanier,  2  Mason,  244,  Mr.  Justice 
Story  cites  the  case  of  Bergen  v.  Bennett,  as  certainly  good  law, 
and  as  illustrating  the  distinction  between  naked  powers  and  powers 
coupled  with  an  interest,  and  in  commenting  on  the  case,  says: 
"but  if  he  (the  grantee)  did  sell,  in  whose  name  was  the  deed  to 


CHAP.   VI.]  IRREVOCABLE  AGENCIES.  203 

be  made?  Plainly  not  in  the  name  of  the  grantor,  for  he  was  dead; 
but  in  the  name  of  the  grantee,  as  his  own  act,  in  virtue  of  his  power, 
and  as  having  an  interest  in  the  estate  conveyed." 

In  the  case  before  us  the  power  is  irrevocable.  It  was  coupled 
with  an  interest  in  the  grantee,  in  the  estate  conveyed,  and  was 
to  be  executed  in  the  name  of  the  grantee,  and  not  in  the  name  of 
tlie  grantor,  and  was  not,  therefore,  affected  by  the  death  of  the 
mortgagor.  The  grantee  has  an  interest  in  the  power,  as  well  as 
the  estate,  and  if  the  same  could  not  be  executed  after  the  death 
of  the  grantor,  it  would  defeat  and  destroy  the  value  of  such 
securities.  .  .  . 

The  biU  was  properly  dismissed,  and  the  decree  is  affirmed. 

Decree  affirmed.^ 


ROLAND,  Administrator,  v.  COLEMAN  &  COMPANY. 

76  Ga.  652.     1886. 

Bill  for  an  injunction  to  enjoin  a  sale  about  to  be  made  under 
a  power  of  sale  contained  in  a  written  instrument  made  by  the 
intestate  to  the  defendants.  Injunction  refused.  Complainant 
appeals. 

Jackson,  C.  J.  This  is  a  bill  brought  by  Eoland,  administrator, 
&c.,  V.  S.  T.  Coleman  &  Company  to  enjoin  that  firm  from  selling 
certain  lands  conveyed  to  them  to  secure  a  debt.  The  chancellor 
refused  the  writ,  and  the  complainant  excepted. 

Is  the  paper  a  mortgage,  or  is  it  a  deed  which  passes  the  title 
absolutely  to  Coleman  &  Company  to  secure  certain  indebtedness, 
with  power  to  sell  in  order  to  pay  the  debt? 

(The  court  then  decides  that  the  instrument  is  a  deed.) 

This  conveyance  also  has  a  power  to  sell,  coupled  with  a  big 
interest  in  the  property,  even  the  title  to  it  to  secure  the  debt,  and 
therefore  the  power  is  irrevocable,  and  does  not  die  with  the  grantor. 
Woodson  V.  Veal,  60  Ga.  563;  Calloway  v.  The  People's  Bank  of 
Bellefontaine  et  al.,  54  Ga.  441. 

Lathrop  &  Co.  v.  Brown,  ex'r,  et  al.,  65  Ga.  312,  was  a  mere 
mortgage  with  power  to  sell,  which  was  revocable,  and  died  with 
the  mortgagor,  the  mortgagees  having  no  interest  in  the  thing,  but 
only  in  the  proceeds.  And  such  is  the  fact  also  in  Miller,  trustee,  v. 
McDonald  et  al.,  72  Ga.  20 ;  Wofford  v.  Wyly  et  al..  Id.  863,  is  also 

>  Accord :  Varnum  v.  Meserve,  8  Allen,  158  (death)  ;  Beattie  v.  Butler,  21  Mo. 
313  (death)  ;  Reilly  v.  Phillips,  4  S.  Dak.  604  (death)  ;  Grandln  v.  Emmons,  10 
N.  Dak.  223  (death)  ;  Berry  v.  Skinner,  30  Md.  567  (Insanity)  ;  Hall  v.  Bliss,  118 
Mass.  554  (bankruptcy). 

But  If  the  mortgage  conveys  no  estate  (as  by  statute  In  some  states)  the  power 
of  sale  Is  revoked  by  the  death  of  the  mortgagor.  Johnson  v.  Johnson,  27  S.  Car. 
309 ;  Miller  v.  McDonald,  72  Ga.  20. 


204  HESS   V.   RAU.  [chap.   VI. 

clearly  distinguishable,  as  no  time  was  fixed  for  the  payment  of  the 
money,  and  there  was  a  written  obligation  to  reconvey  and  no  power 
to  sell,  but  nothing  ruled  there  conflicts  with  aught  said  here. 
There  were  mortgages  with  power  to  sell  without  regular  foreclosure, 
but  with  no  pretence  that  the  title  passed.  In  the  case  at  bar,  the 
title  did  pass,  and  this  great  interest  in  the  land  itself  made  the 
power  here  irrevocable  after  the  grantor's  death. 

Judgment  affirmed} 


HESS   V.   EAU. 

95  N.  Y.  359.     1884. 

Action  to  recover  a  balance  due  plaintiffs,  stock-brokers,  on 
account  of  purchase  of  stocks  to  fill  short  sales  made  for  defendant's 
testator,  Henry  Eau.  The  short  sales  were  made  prior  to  Eau's 
death,  which  occurred  October  29,  1880.  The  executrix  qualified 
December  29,  1880.  In  the  interval  plaintiffs  continued  to  borrow 
stock  from  time  to  time  to  keep  the  transaction  good.  On  January 
5,  1881,  they  notified  the  executrix  to  furnish  additional  margins 
or  they  would  be  compelled  to  buy  in  stock  on  her  account  to  com- 
plete the  transaction.  No  margins  were  furnished  and  plaintiffs 
bought  stock  at  a  loss  of  $9,437.98,  and  closed  the  deal.  Judgment 
for  plaintiffs. 

Andrews,  J.  ...  It  is  claimed  by  the  counsel  for  the  defendant 
that  upon  the  familiar  doctrine  of  agency,  the  death  of  Eau  operated 
as  a  revocation  of  the  plaintiff's  prior  authority.  The  application 
of  this  principle,  it  is  said,  disabled  the  plaintiffs  from  continuing 
the  speculation  by  borrowing  stocks  thereafter  on  account  of  his 
estate.  This  claim  is  supplemented  by  the  further  one  that  the 
plaintiffs  were  bound  within  a  reasonable  time  after  Eau's  death 
to  close  the  transaction  by  bujdng  in  the  stocks,  although  no  repre- 
sentative of  his  estate  had  meanwhile  been  appointed.  We  are  of 
the  opinion  that  neither  of  these  claims  can  be  sustained.  .  .  . 

It  is  clear  that  after  the  death  of  Eau,  the  plaintiffs  could  not 
enter  into  fresh  transactions  in  the  purchase  or  sale  of  stocks  on 
account  of  Eau  or  his  estate,  in  execution  of  unexecuted  orders  or 
a  general  authority  to  deal  in  stocks  for  his  account  given  before 
his  death.  But  the  rule  that  the  death  of  a  principal  revokes  the 
authority  of  an  agent  has  a  well-settled  exception  when  the  agency 
is  coupled  with  an  interest.    Hunt  v.  Eousmanier,  8  Wheaton,  17*4. 

•  A  trust  deed  conveys  an  estate  and  the  power  of  sale  Is  irrevocable  by  death  or 
any  other  cause.  American  Loan  and  Trust  Co.  v.  Billings,  58  Minn.  187;  Muth  w. 
Goddard,  28  Mont.  237. 


CHAP.    VI.]  IRREVOCABLE   AGENCIES.  205 

The  death  of  Eau  left  the  plaintiffs  in  the  position  they  had  pre- 
viously occupied,  of  being  borrowers  of  the  stocks  to  deliver,  with 
a  personal  liability  to  replace  them  when  called  for  by  the  lenders. 
This  obligation  was  not  and  could  not  be  terminated  by  Rau's  death. 
The  estate  of  Eau  on  the  other  hand  was  bound  to  indemnify  the 
plaintiffs  for  any  loss  they  might  sustain  on  closing  out  the  trans- 
actions, or  as  the  phrase  is,  "  covering  the  sale." 

Until  the  appointment  of  a  representative  of  Rau's  estate  there 
was  no  one  on  whom  the  plaintiffs  could  call  for  additional  margin 
or  to  close  the  transactions,  and  no  one  to  give  directions  in  its 
behalf.  The  result  of  continuing  the  transactions  might  be  favorable 
or  unfavorable,  but  which,  could  not  be  foreseen.  The  speculation 
was  Rau's,  and  while  he  lived  he  could  control  the  adventure  so 
long  as  he  performed  his  duty  under  the  contract.  Upon  his  death 
this  right  naturally  devolved  upon  his  representatives.  What  the 
plaintiffs  did  was  to  keep  the  speculation  in  statu  quo  awaiting  the 
qualification  of  the  executrix,  the  only  change  meanwhile  in  the 
situation  arising  from  the  fluctuations  in  the  market  price  of  the 
stocjis.  As  it  turned  out  it  would  have  been  to  the  advantage  of 
the  estate  if  the  stocks  had  been  bought  in  immediately  after  Rau's 
death.  But  if  this  course  had  been  taken  and  the  market  had  gone 
the  other  way,  the  plaintiffs  would  then  have  been  called  upon  to 
justify  the  transaction.  We  think  the  plaintiffs  were  not  bound 
to  place  themselves  in  this  dilemma,  but  were  authorized,  acting  in 
good  faith,  to  maintain  the  existing  situation  until  a  representative 
of  the  estate  should  be  appointed.  They  had  such  an  interest  in  the 
transaction  by  reason  of  the  personal  obligation  they  had  assumed, 
as  entitled  them  to  continue  it  until  that  time. 

The  act  of  buying  in  the  stocks  on  account  of  the  estate,  which  the 
defendant  insists  should  have  been  done,  would  have  been  a  more 
decisive  act  of  agency,  than  to  borrow  stocks  to  replace  others  pre- 
viously borrowed  in  order  to  discharge  their  own  obligation.  We 
do  not  say  that  circumstances  might  not  exist  which  would  justify 
a  broker  in  closing  a  stock  transaction  after  the  death  of  the  prin- 
cipal, without  awaiting  the  appointment  of  a  representative,  but 
however  this  may  be,  we  think  it  plain  that  no  exigency  existed  in 
the  case  now  under  consideration,  which  imposed  any  such  duty  upon 
the  plaintiffs. 

There  are  no  other  questions  calling  for  special  consideration. 

We  find  no  error  in  the  judgment,  and  it  should,  therefore,  be 
affirmed. 

All  concur.  Judgment  affirmed} 

'  Accord  :  Durbrow  v.  Eppens,  65  N.  J.  L.  10  (agent  of  numerous  Lloyd  Insurance 
underwriters  may  adjust  losses  for  which  each  and  all  are  liable  and  bind  estate  of 
a  deceased  member  upon  policies  issued  during  his  life  time)  ;  Willingham  v.  Rush- 
ing, 105  Ga.  76  (factor  who  has  made  advances  may  sell  enough  of  the  principal's 
goods  to  reimburse  himself  after  death  of  principal)  ;  Read  r.  Anderson,  13  Q.  B.  D. 


206  GOODWIN   V.   BOWDEN.  [CHAP.   VI. 

GOODWIN   V.   BOWDEN. 

64  Me.  424.     1867. 

Assumpsit  for  money  had  and  received. 

Walton,  J.  Action  for  money  had  and  received.  The  plaintiff 
introduced  evidence  tending  to  prove  that  one  Ramsdell  was  indebted 
to  him,  that  Ramsdell  had  in  the  hands  of  the  defendant  funds 
more  than  sufficient  to  pay  him,  that  out  of  these  funds  Eamsdell 
ordered  the  defendant  to  pay  the  plaintiff,  and  that  the  defendant 
promised  so  to  do. 

The  defendant  introduced  evidence  tending  to  prove  that  Eamsdell 
afterwards  revoked  the  order  and  directed  him  not  to  pay  the 
plaintiff. 

The  plaintiff  contended,  and  requested  the  court  to  instruct  the 
jury,  that  Eamsdell  had  no  power  to  revoke  the  order  or  change 
the  appropriation  of  the  money  after  the  same  had  been  assented 
to  by  the  plaintiff  and  the  defendant;  that,  by  virtue  of  the  agree- 
ment between  the  plaintiff  and  the  defendant  and  Eamsdell,  the 
funds  were  held  by  the  defendant  in  trust  to  pay  the  plaintiff,  and 
that  such  trust  could  not  be  revoked  without  the  plaintiff's  consent. 

The  court  declined  to  give  this  instruction,  and  instructed  the 
jury  "  that  the  plaintiff  had  no  vested  right  in  the  funds  of  Eamsdell 
in  the  hands  of  Bowden,  and  that  if  there  was  a  revocation  by  Eams- 
dell before  any  payment  to  Goodwin  by  the  defendant,  then  the 
plaintiff  had  no  right  to  recover;  that  if,  before  Bowden  made  the 
payment,  or  before  this  suit  was  brought,  the  principal  revoked  his 
orders,  then  he  (Bowden)  was  bound  by  the  orders  of  his  principal." 

When  this  instruction  was  given,  we  think  the  presiding  judge 
either  overlooked  or  did  not  attach  sufficient  importance  to  the  fact 
that  the  plaintiff's  evidence  tended  to  prove  that,  before  the  attempted 
revocation  by  Eamsdell,  the  defendant  expressly  promised  the  plain- 
tiff to  pay  him  out  of  the  funds  in  his  hands. 

If  a  debtor,  having  funds  in  the  hands  of  his  agent,  orders  him 
to  pay  a  creditor,  and  the  agent  promises  to  execute  the  order,  and 
the  creditor  accepts  and  relies  upon  the  agent's  promise,  the  debtor's 
power  to  control  the  funds  is  gone.  The  agent  becomes  an  original 
promisor,  and  the  creditor  may  have  an  action  of  assumpsit  against 

(C.  A.)  779  (stakeholder  may  pay  bet  made  In  his  name  for  principal  although  after 
the  bet  Is  lost  the  principal  revokes). 

"  If  a  principal  employs  an  agent  to  do  a  legal  act,  the  doing  of  which  may  In  the 
ordinary  course  of  things  put  the  agent  under  an  absolute  or  contingent  obligation 
to  pay  money  to  another,  and  at  the  same  time  gives  him  an  authority  If  the  obliga- 
tion is  Incurred  to  discharge  It  at  the  principal's  expense,  the  moment  the  agent  on 
the  faith  of  that  authority  does  the  act,  and  so  incurs  the  liability,  the  authority 
ceases  to  be  revocable."    Read  v.  Anderson,  10  Q.  B.  D.  100. 


CHAP.    VI.]  lEEEVOCABLE   AGENCIES.  207 

him  if  he  does  not  keep  his  promise.  No  consideration  need  pass 
as  between  the  agent  and  the  creditor.  The  funds  in  his  hands  are 
a  sufficient  consideration  for  his  engagement. 

Being  grounded  upon  the  consideration  of  funds  in  his  hands, 
it  is  an  original  undertaking,  and  the  promise  is  not  within  the 
Statute  of  Frauds  and  need  not  be  in  writing.  It  is  not  a  promise 
to  pay  the  debt  of  another,  but  a  promise  to  discharge  an  obligation 
resting  upon  himself.  Having  funds  in  his  hands  for  which  he  is 
already  liable,  he  agrees  to  discharge  his  liability  by  disposing  of 
the  funds  as  the  owner  directs.  And  when  by  reason  of  the  agent's 
promise  a  right  of  action  against  him  accrues  to  the  creditor,  the 
debtor's  authority  over  the  funds  ceases.  After  such  a  promise  has 
been  made  by  the  agent  and  accepted  by  the  creditor,  to  allow  the 
debtor,  at  his  own  will  and  pleasure,  to  nullify  the  engagement,  and 
by  withdrawing  his  funds  destroy  the  security  he  has  voluntarily 
given,  would  not  only  violate  the  obligation  of  a  contract,  but,  as 
declared  by  Judge  Story,  would  be  against  the  clearest  principles 
of  justice  and  equity.  In  fact  it  would  seem  to  be  a  self-evident 
proposition  that  the  defendant's  promise,  made  upon  sufficient  con- 
sideration and  accepted  by  the  plaintiff,  creates  a  contract  between 
them  of  the  benefits  of  which  the  plaintiff  cannot  be  deprived  except 
with  his  own  consent.  Story  on  Agency,  §  477;  2  Greenl.  on  Ev. 
§  119 ;  Dearborn  v.  Parks,  5  Maine,  81 ;  Hilton  v.  Dinsmore,  21  Maine, 
410;  Maxwell  v.  Haynes,  41  Maine,  559;  Hall  v.  Marston,  17  Mass. 
575;  Arnold  v.  Lyman,  17  Mass.  400;  Brewer  v.  Dyer,  7  Cush.  337; 
Carnegie  v.  Morrison,  2  Met.  381 ;  Warren  v.  Batchelder,  16  N".  H. 
580.  Exceptions  sustained.  —  New  trial  granted.^ 

Appleton,  C.  J.,  Cutting,  Kent,  Danfoeth,  and  Tapley,  J  J., 
concurred. 


KINDIG   V.    MAECH. 

15  Ind.  248.     1860. 

Perkins,  J.  Kindig  gave  a  power  of  attorney  to  Chamberlain, 
to  confess  a  judgment  in  favor  of  March,  for  a  debt  due  him. 

The  power  was  duly  executed  and  proved.  We  are  satisfied  of 
this  from  an  examination  of  the  record. 

When  judgment  was  about  to  be  entered  in  execution  of  the  power, 
Kindig  presented  to  the  court  a  revocation  of  it,  on  the  ground 
that  it  was  for  too  large  an  amount.  The  court  disregarded  the 
revocation,  and  directed  the  judgment  to  be  entered. 

A  power  of  attorney  to  confess  judgment  is  not  revocable  by  act 

*  But  If  the  agent  has  not  come  under  an  obligation  to  the  third  party,  the  prin- 
cipal may  revoke.     Simonton  v.  First  N.  Bk.,  24  Minn.  216. 


208  KINDIG  V.   MAECH.  [CHAP.   VI. 

of  the  party.  See  Story  on  Agency,  §  477;  2  Archbold's  Pr.  p.  21. 
JBut  if  any  fact  affecting  its  validity  be  alleged,  the  court  will  permit 
an  issue  to  be  formed  and  tried,  and  act  in  the  premises  accordingly, 
annulling  the  warrant  or  reducing  the  amount  of  judgment  upon 
it,  as  the  case  proved  may  require.  In  this  case  the  defendant  may 
3'et  have  the  judgment  corrected,  on  complaint  filed  and  heard,  as 
in  other  cases.  Archbold,  supra;  15  Petersdorf,  pp.  366,  367,  368. 
Per  Cueiam.    The  appeal  is  dismissed  with  costs.^ 

*  In  Evans  v.  Fearne,  16  Ala,  689,  the  court  says :  "  The  power  of  attorney  be- 
fore us  Is  but  a  simple  authority  conferred  by  the  plaintiff  in  error  upon  Philpot  and 
Price  to  confess  judgment,  and  before  they  exercised  it,  the  party  revoked  the 
power.  It  is  not  shown  that  It  was  executed  upon  any  consideration,  or  that  it  was 
given  as  security  for  any  demand,  or  to  render  a  security  effectual,  and  we  thinlc  it 
falls  under  the  general  rule  of  revocable  powers.  Walsh  v.  Whitcomb,  2  Esp.  Rep.,  is 
an  Instance  of  the  execution  of  a  power  as  part  of  a  security.  ...  So  it  seems  that 
to  fall  within  any  exception  to  the  general  rule,  the  power  must  constitute  part  of  a 
security  for  money,  or  must  be  necessary  to  give  effect  to  such  security,  or  must 
have  been  given  for  a  valuable  consideration." 


CHAP.   VII.]  COMPENSATION   FOE  AUTHORIZED  ACT.  209 


PART  II. 

LEGAL  EFFECT   OF  THE  EELATION  AS  BETWEEN 
PEINCIPAL   AND   AGENT. 

CHAPTER   VIL 
Obligations  of  Principal  to  Agent. 

1.     Compensation  for  Authorized  Act. 
McCEARY,  Surviving  Partner,  etc.  v.  EUDDICK  et  al. 

33  Iowa,  521.     1871. 

Action  to  recover  for  professional  services  rendered  to  defendants 
by  Eankin  &  McCrary,  attorneys  at  law.     Judgment  for  plaintiff. 

The  plaintiff  firm  was  retained  by  one  Galland,  who  had  a  special 
contract  with  defendants  to  conduct  the  suit  in  which  the  services 
were  rendered.  Plaintiff  firm  had  no  knowledge  of  this  special 
contract.  The  court  charged  that  if  defendants  knew  that  the  plain- 
tiff firm  was  managing  the  suit,  there  would  -arise  an  implied  promise 
to  pay  what  the  services  were  reasonably  worth,  even  though  Galland 
had  agreed  with  defendants  to  pay  for  such  services  himself,  unless 
the  plaintiff  firm  knew  of  this  special  contract  between  defendants 
and  Galland.  The  court  refused  to  charge  that  if  defendants  never 
employed  the  plaintiff  firm,  and  had  reason  to  believe  that  the  firm 
was  acting  for  Galland,  they  would  not  be  liable. 

Miller,  J.  .  .  .  We  are  of  opinion  that  there  was  no  error  in 
the  ruling  of  the  court. 

It  will  not  be  questioned  that,  if  the  defendants  had  requested 
Eankin  &  McCrary  to  perform  >the  services,  without  more  being 
said,  they  would  have  been  liable  to  pay  what  their  services  were 
reasonably  worth.  Nor  will  it  be  doubted  that,  if  there  had  been 
no  special  contract  between  Galland  and  the  other  defendants,  and 
the  services  had  been  rendered  with  the  knowledge  of  defendants, 
they  would  be  liable  to  pay  for  them.  The  firm  of  Eankin  &  McCrary 
performed  the  services  for  the  defendants  with  their  knowledge. 
They  knew  that  these  attorneys  were  appearing  and  defending  the 
action  in  their  behalf  and  for  their  benefit,  and,  although  they  had 
not  requested  Eankin  &  McCrary  to  render  the  services,  yet,  by  their 
silence,  they  assented  that  they  should  do  so,  and  thereby  rendered 
a  previous  request  unnecessary. 

14 


210  ALLEN   V.   BBYSON.  [CHAP.   VII. 

If  the  defendants  did  not  intend  that  Eankin  &  McCrary  should 
look  to  them  for  payment  for  the  services  they  were  rendering,  they 
should  have  objected  or  informed  them  of  the  special  contract;  but 
by  the  silence  of  the  defendants,  with  full  knowledge  of  what  was 
being  done  by  Eankin  &  McCrary,  and  by  receiving  and  enjoying 
the  benefit  of  the  services  rendered,  a  promise  to  pay  will  be  implied. 
2  Parsons  on  Cont.  (5th  ed.)  58;  3  Bl.  Com.  161.  See  also  2  Par- 
sons on  Cont.  46;  Phillips  v.  Jones,  1  Adol.  &  Ell.  333;  Peacock  v. 
Peacock,  2  Camp.  45;  Scully  v.  Scully,  28  Iowa,  548;  Waterman  v. 
Gilson,  5  La.  An.  672;  Lucas  v.  Godwin,  3  Bing.  (N.  C.)  737; 
James  v.  Bixby,  11  Mass.  34;  Farmington  Academy  v.  Allen,  14 
Id.  172. 

It  would  have  been  otherwise  had  Eankin  &  McCrary  been  in- 
formed of  the  special  agreement,  or  had  the  circumstances  been 
such  as  to  raise  a  presumption  that  they  had  such  information. 
But  they  entered  upon  the  services  at  the  request  of  one  who  was 
himself  a  defendant,  and  they  performed  the  services  with  the 
knowledge  and  implied  assent  and  for  the  benefit  of  all  the  de- 
fendants, without  notice  of  any  special  agreement  in  regard  to  the 
defence  of  the  case.  Eankin  &  McCrary  had  a  right  to  rely  on  the 
promise  which,  under  the  circumstances,  the  law  implied,  unless 
they  were  informed  of  the  special  agreement.  This  information  they 
did  not  possess,  but  the  defendants  did,  and  it  was  their  fault  that 
it  was  not  communicated. 

The  judgment  of  the  district  court  is  Affirmed. 


2.  Compensation  for  Gratuitous  Service. 

ALLEN   V.   BEYSON. 
67  Iowa,  591.     1885. 

Action  to  recover  compensation  for  professional  services.  Judg- 
ment for  plaintiff.     Defendant  appeals. 

Seevees,  J.  .  .  .  The  defendant  pleaded  that  he  and  the  plain- 
tiff were  brothers-in-law,  and,  in  substance,  that  each  of  them  was 
engaged  in  the  practice  of  the  law,  and  had  been  in  the  habit  of 
assisting  each  other  as  a  matter  of  mutual  accommodation,  and  that 
**all  and  each  of  the  professional  services  for  which  plaintiff  seeks 
to  recover  in  this  action  were  rendered  by  him  as  matters  of  mutual 
accommodation  and  interchange  of  courtesies,  and  without  charge 
or  expectation  of  payment  or  reward,  by  one  as  against  the  other," 
The  court  instructed  the  jury :  "  If,  however,  such  services  were 
rendered  by  the  plaintiff  without  expectation  of  reward,  or  intention 


CHAP.   VII.]      COMPENSATION   FOE   GRATUITOUS   SERVICE.  211 

on  his  part  to  charge  therefor,  or  by  any  agreement  or  understanding 
that  the  services  were  to  be  gratuitous,  the  plaintiff  cannot  recover 
unless,  after  such  services  were  rendered,  and  in  consideration  there- 
of, defendant  agreed  with  or  promised  plaintiff  to  pay  for  the  same. 
In  the  latter  case  the  valuable  character  of  the  service,  and  the  moral 
obligation  to  pay  for  the  same,  would  be  a  sufficient  consideration 
to  support  the  promise  and  enable  the  plaintiff  to  recover  the  rea- 
sonable value  of  such  service."  We  understand  this  instruction  to 
mean  that  where  one  person  renders  services  for  another  gratuitously, 
and  with  no  expectation  of  being  paid  therefor,  a  moral  obligation 
is  incurred  by  the  latter  which  will  support  a  subsequent  promise 
to  pay.  In  our  opinion,  this  is  not  the  law.  If  the  services  are 
gratuitous,  no  obligation,  either  moral  or  legal,  is  incurred  by  the 
recipient.  No  one  is  bound  to  pay  for  that  which  is  a  gratuity. 
No  moral  obligation  is  assumed  by  a  person  who  receives  a  gift. 
Suppose  the  plaintiff  had  given  the  defendant  a  horse,  was  he 
morally  bound  to  pay  what  the  horse  was  reasonably  worth?  We 
think  not.  In  such  case  there  never  was  any  liability  to  pay,  and 
therefore  a  subsequent  promise  would  be  without  any  consideration 
to  support  it.  That  there  are  cases  which  hold  that  where  a  liability 
to  pay  at  one  time  existed,  which,  because  of  the  lapse  of  time,  or  for 
other  reasons,  cannot  be  enforced,  the  moral  obligation  is  sufficient 
to  support  a  subsequent  promise,  will  be  conceded. 

These  cases  are  distinguishable,  because  the  instructions  con- 
template a  case  where  an  obligation  to  pay  never  existed  until  the 
promise  was  made.  We  do  not  believe  a  case  can  be  found  where 
a  moral  obligation  alone  has  been  held  to  be  a  sufficient  consideration 
for  a  subsequent  promise.  To  our  minds,  however,  it  is  difficult  to 
find  a  moral  obligation  to  pay  anything,  in  the  case  contemplated 
in  the  instructions,  prior  to  the  promise.  The  following  cases  support 
the  view  above  expressed.  Cook  v.  Bradley,  7  Conn.  57;  Williams 
V.  Hathaway,  19  Pick.  387;  Dawson  v.  Dawson,  12  Iowa,  512; 
McCarty  v.  Hampton  Building  Ass'n,  61  Id.  287. 

•  •  •  •  ■  •  •  • 

Reversed. 


WALTON   V.    CLARK. 

54  Minn.  341.     1893. 

Action  for  commissions.  Plaintiff  claimed  defendants  employed 
him  to  procure  a  purchaser  for  defendants'  property,  and  that  he 
found  and  introduced  to  defendants  a  purchaser  who  bought  the 
property.  There  was  conflicting  evidence  as  to  the  employment,  and 
the  jury  returned  a  verdict  for  defendants.     New  trial  denied. 


218  KALLEY  V.    BAKER.  [CHAP.  VII. 

Vanderbtjrgh,  J.  ...  It  is  true  the  plaintiff  interested  himself 
in  procuring  a  purchaser,  and  defendants  dealt  with  a  person  intro- 
duced by  him  as  they  would  with  any  other  person,  but  not,  if  their 
testimony  is  to  be  believed,  in  pursuance  of  any  agreement  with, 
or  employment  of,  plaintiff,  or  with  any  expectation  of  papng  a 
commission.  There  was  no  error  in  the  charge  of  the  court.  If 
there  was  no  agency  or  agreement  to  employ  plaintiff,  defendants' 
subsequent  acts  in  consummating  a  bargain  with  a  party  introduced 
by  plaintiff  would  not  create  a  liability.  The  mere  fact  that  plain- 
tiff had  been  instrumental  in  bringing  the  parties  together,  as  any 
third  party  might  have  volunteered  to  do,  would  not  debar  the 
defendants  from  treating  with  him,  nor,  if  they  did  so,  either 
directly  or  through  plaintiff,  would  it  establish  or  recognize  an 
agency,  in  the  absence  of  any  agreement  between  the  parties,  and 
against  the  consent  of  the  defendants.  .  .  . 

Order  affirmed. 


3.    Compensation  dependent  upon  Performance  of  Conditions. 

KALLEY   V.   BAKER. 
132  N.  Y.  1.     1892. 

Plaintiffs  brought  defendant  and  H.  together  in  pursuance  of 
a  contract  of  agency  to  sell  defendant's  farm.  Defendant  and  H. 
entered  into  a  contract  to  excliange  defendant's  farm  for  H's  apart- 
ment house.  Afterward  defendant  rejected  H's  title  as  defective. 
Judgment  for  plaintiffs  for  commissions. 

FoLLETT,  Ch.  J.  This  action  was  begun  to  recover  commissions 
alleged  to  have  been  earned  by  plaintiffs  in  procuring  the  execution 
of  a  contract  between  the  defendant  and  one  Humphrey,  for  the 
exchange  of  real  estate.  .  .  . 

The  question  underlying  all  others  in  this  case,  and  which  is 
decisive  of  it,  is,  was  it  the  understanding  of  the  parties  to  this 
action  that  the  plaintiffs  were  not  to  be  entitled  to  commissions, 
unless  mutual  conveyances  of  the  properties  contracted  to  be  ex- 
changed were  made  and  accepted,  or  whether  they  were  entitled  to 
commissions  when  the  contract  of  exchange  was  executed?  .  .  . 

There  is  no  evidence  that  the  plaintiffs  knew  anything  about  the 
title  to  the  "  Aldine ; "  that  they  made  any  representations  in  respect 
to  it,  nor  does  it  appear  that  the  defendant  asked  them  to  make,  or 
cause  to  be  made,  a  search. 

The  trial  court  submitted  the  question  as  to  what  the  agreement 
was  to  the  jury,  instructing  them  as  follows :  "  In  ordinary  cases, 
the  law  is  well  settled  where  a  broker  is  employed  in  reference  to 


CHAP.   VII.]       COMPENSATION  DEPENDENT  UPON   PERFORMANCE.      213 

a  sale  or  exchange  of  real  estate,  that  when  he  brings  a  buyer  to 
the  seller  who  is  willing  and  ready  to  enter  into  an  agreement  with 
the  seller  for  the  purchase  of  his  property  on  the  terms  that  the 
seller  has  fixed,  and  the  seller  is  satisfied  to  accept  him  as  a  purchaser, 
then  the  broker  has  earned  his  commission.  The  earning  of  it  is 
not  dependent,  in  such  cases,  on  the  question  as  to  whether  the 
buyer  carries  out  the  contract,  or  as  to  whether  the  seller  is  able 
to  complete  his  contract.  .  .  .  Therefore,  I  say  to  you,  in  the  absence 
of  any  express  agreement  to  the  contrary,  the  law  is  that  the  broker 
is  entitled  to  his  commissions  when  the  vendor  accepts,  when  he 
|(the  broker)  brings  to  the  vendor  a  party  ready  and  willing  to  accept 
the  terms  fixed  by  the  vendor,  and  the  party  is  satisfactory  to  the 
vendor,  and  he  enters  into  a  contract  with  him.  The  contention 
is  that  there  was  a  different  agreement  here.  .  .  .  Now,  I  propose 
to  leave  that  question  to  you  to  determine.  If  you  find  that  this 
was  an  ordinary  contract,  made  without  any  conditions,  the  broker 
employed  in  the  usual  way,  and  that  there  was  no  bargain  entered 
into  between  the  plaintiffs  and  Mr.  Baker,  that  they  were  only  to 
be  paid  their  commissions  in  case  this  sale  went  through,  then  plain- 
tiffs are  entitled  to  recover.  If,  however,  the  bargain  agreed  upon 
between  Mr.  Kalley  and  Mr.  Baker  was,  that  commission  was  only 
to  be  paid  in  case  this  whole  transaction  went  through,  as  provided 
by  the  terms  of  the  contract  of  exchange,  the  plaintiff  is  not  entitled 
to  recover  unless  you  are  satisfied  from  the  evidence  here  that  Mr. 
Baker  capriciously  refused  to  carry  out  the  contract." 

To  this  instruction  the  defendant  took  no  exception  except  to  that 
part  of  it  which  laid  down  the  rule  that  ordinarily  the  broker  "is 
entitled  to  commissions  when  the  parties  have  been  found  satisfactory 
to  each  other  and  they  have  entered  into  a  mutual  contract  of 
purchase  and  sale.''  * 

This  exception  presents  no  error.  In  Knapp  v.  Wallace,  41  N".  Y. 
477,  the  defendant  employed  a  broker  to  purchase  certain  real 
estate  for  a  price  named,  agreeing  to  pay  him  one  per  cent  on  that 
price  for  his  services.  Through  the  aid  and  assistance  of  the  broker 
a  contract  of  sale  at  the  price  named  was  entered  into  personally 
between  the  defendant  and  the  owner  of  the  property.  As  a  defence 
to  an  action  brought  to  recover  the  commissions  the  defendant  sought 
to  show  that  the  title  of  the  vendor  was  defective,  and  for  that  reason 
he  was  unable  to  perform  his  contract.  It  was  held  "it  was  no 
defence  to  the  plaintiff's  claim  that  the  title  to  the  property  was 
defective.  Messmore  (the  broker)  had  not  undertaken  that  it  should 
be  good.  The  contract  between  him  and  defendant  did  not  place  his 
right  to  compensation  on  such  a  condition." 

When  a  broker,  as  a  part  of  his  employment,  assumes  to  execute 
for  his  principal  an  executory  contract  of  sale  or  exchange  he  does 
not  become  entitled  to  his  commissions  unless  the  other  contracting 


214  BOCHE   V.   SMITH.  [CHAP.    VII. 

party  is  able  to  perform  the  contract  on  his  part.  Barnes  v.  Roberts, 
5  Bosw.  73;  McGavock  v.  Woodlief,  20  How.  (U.  S.)  221. 

But  under  the  facts  found,  these  and  kindred  cases  have  no  appli- 
cation to  this  case. 

The  judgment  should  be  affirmed  with  costs. 

All  concur. 

Judgment  affirmed.^ 


EOCHE   V.   SMITH. 
176  Mass.  595.     1900. 

LoEiNG,  J.  This  case  was  submitted  to  the  superior  court  on  an 
agreed  statement  of  facts.  Judgment  was  entered  in  that  court  for 
the  defendant,  and  from  that  judgment  an  appeal  was  taken  to  this 
court. 

It  appears  that  the  defendant,  being  the  owner  of  certain  land  in 
Boston,  "  employed  the  plaintiff  to  exchange  said  property  for  any 
other  suitable  property."  The  plaintiff  brought  the  matter  to  the 
attention  of  Michael  F.  Armstrong,  who  offered  to  exchange  a  specified 
piece  of  land  owned  by  him  for  the  land  of  the  defendant.  Arm- 
strong's land  was  accepted  by  the  defendant  as  "  suitable,"  and 
through  the  efforts  of  the  plaintiff  a  written  agreement  was  made 
between  the  defendant  and  Armstrong,  by  which  the  defendant  was 
to  convey  her  land  to  him,  and  he  was  to  convey  his  land  to  her.  It 
was  stipulated  that  each  lot  of  land  was  "to  be  conveyed  within 
twenty  days  from  this  date  by  a  good  and  sufficient  warranty  deed, 
.  .  .  conveying  a  good  and  clear  title  to  the  same  free  from  all  in- 
cumbrances, except  [in  the  case  of  Armstrong's  land]  taxes  for  1897 
and  a  mortgage  for  thirteen  thousand  dollars."  On  examining  Arm- 
strong's title,  the  defendant  discovered  that,  acting  under  St.  1891, 
c.  323,  St.  1893,  c.  418,  and  St.  1895,  c.  449,  the  board  of  street  com- 
missioners of  the  city  of  Boston  had  filed  plans  in  the  office  of  the 
city  engineer  of  the  city  of  Boston,  by  which  certain  streets  or  ways 
were  located  over  the  land  to  be  conveyed  to  her  by  Armstrong,  in 
consequence  of  which  he  "  was  unable  to  convey  his  said  property  free 
from  the  operation  and  effect  of  any  of  the  said  doings  of  the  board  of 
street  commissioners,  and  by  reason  thereof  the  defendant  refused 
to  carry  out  said  agreements."  Thereupon  the  plaintiff  brought 
this  suit  for  his  commission. 

It  is  expressly  stated  that  "the  plaintiff  had  no  knowledge  of 
the  .  .  .  facts  relative  to  the  acts  of  the  board  of  street  commis- 
sioners of  the  city  of  Boston"  which  are  stated  above,  and  that  he 

*  It  the  principal's  title  is  defective  and  the  purchaser  refuses  to  take  the  prop- 
erty,  the  agent  is  entitled  to  bis  commissions.    Doty  v.  Miller,  43  Barb.  (N.  Y.)  529. 


CHAP.   VII.]      COMPENSATION   DEPENDENT   UPON   PERFORMANCE.      215 

''  acted  in  good  faith  in  all  said  negotiations."  It  was  held  in  Knapp 
v.-  Wallace,  41  N.  Y.  477,  where  the  broker  was  employed  to  find 
a  person  to  convey  land  to  be  paid  for  in  money,  and  in  Kalley  v. 
Baker,  132  N.  Y.  1,  where  the  broker  was  employed  to  find  a  person 
to  convey  land  to  be  paid  for  by  a  conveyance  of  other  land,  —  that 
is  to  say,  to  effect  an  exchange,  —  that  where  the  principal  makes 
a  valid  agreement  with  the  customer  produced  by  the  broker,  the 
broker  has  earned  his  commission,  even  if  it  turns  out  that  the 
customer  cannot  make  a  good  title,  and  the  land  is  not  conveyed; 
provided  the  broker  acted  in  good  faith  in  the  matter.  In  the 
opinion  of  a  majority  of  the  court,  those  cases  were  rightly  decided. 
The  question  is  the  same  in  the  two  cases;  the  only  difference  is 
that  in  one  case  payment  is  to  be  made  in  money,  in  the  other  by 
a  conveyance  of  other  land.  Where  the  broker  is  employed  to  get 
a  customer  to  buy  and  pay  for  his  principal's  land,  and  it  turns 
out  that  the  customer  is  not  able  to  pay  for  the  land,  it  is  settled 
that  his  inability  to  do  so  does  not  deprive  the  broker  of  his  com- 
mission; provided  the  principal  made  a  valid  and  binding  agree- 
ment for  the  sale  of  the  land  with  the  customer  produced  by  the 
broker.  Ward  v.  Cobb,  148  Mass,  518;  Burnham  v.  Upton,  174 
Mass.  408,  409.  The  ground  on  which  this  is  settled  is  that, 
by  entering  into  a  valid  contract  with  the  customer  produced  by 
the  broker,  the  principal  accepts  the  customer  as  able,  ready,  and 
willing  to  buy  the  land  and  pay  for  it.  In  such  a  case  the  decision 
would  have  to  be  the  other  way,  were  it  not  that  by  entering 
into  the  contract  with  him  the  principal  accepts  the  customer  pro- 
duced by  the  broker.  What  the  broker  is  employed  to  do  is  to 
produce  a  customer  who  will  buy  and  pay  for  his  principal's  land. 
Fitzpatrick  v.  Gilson,  176  Mass.  477.  If  it  turns  out  that  the 
customer  produced  by  the  broker  is  not  able  to  pay,  and  does  rot 
pay,  for  the  land,  the  broker  has  not  performed  his  duty,  and  has 
not  earned  his  commisssion ;  and  it  is  only  because  the  principal 
accepts  the  customer,  by  entering  into  a  valid  contract  with  him, 
that  it  is  held,  in  cases  like  Ward  v.  Cobb,  that  the  broker  has  earned 
his  commission.  Coleman's  Ex'r  v.  Meade,  13  Bush,  358;  Donohue 
V.  Flanagan  (City  Ct.  N.  Y.)  9  N.  Y.  Supp.  273;  Francis  v.  Baker, 
45  Minn.  83 ;  Wray  v.  Carpenter,  16  Colo.  271 ;  Lockwood  v.  Halsey, 
41  Kan.  166 ;  Springer  v.  Orr,  82  111.  App.  558.  The  law  is  settled 
in  other  jurisdictions  in  accordance  with  Ward  v.  Cobb  (see  Francis 
V.  Baker,  45  Minn.  83;  Wray  v.  Carpenter,  16  Colo.  271;  Love  v. 
Miller,  53  Ind.  294) ;  and  generally  that  a  broker  makes  out  a  case 
for  a  commission  earned  by  proving  a  contract  made.  See  Cook  v. 
Fiske,  12  Gray,  491 ;  Rice  v.  Mayo,  107  Mass.  550 ;  Keys  v.  Johnson, 
68  Pa.  St.  42 ;  Veazie  v.  Parker,  72  Me.  443 ;  Conkling  v.  Krakauer, 
70  Tex.  735,  739. 
The  same  rule  obtains  when  the  principal  wants  to  buy  in  place 


216  BOCHE   V.   SMITH.  [ClIAP.    VII. 

of  wanting  to  sell.  Where  the  principal  wants  to  buy  100  bushels 
of  wheat  at  a  price  named  by  him,  and  employs  a  broker  to  get  him 
the  wheat  at  that  price,  the  broker  earns  his  commission  when  he 
produces  a  customer,  and  his  principal  makes  a  valid,  binding  agree- 
ment with  the  customer  for  the  wheat ;  and  the  broker's  right  to  his 
commission  is  not  affected  by  the  inability  or  refusal  of  the  customer 
to  deliver  the  wheat.  In  such  a  case  the  broker  has  not  produced 
a  customer  able  to  supply  his  principal  with  the  wheat,  and  would 
not  have  earned  his  commission  had  it  not  been  that  his  principal, 
by  contracting  with  the  customer,  had  accepted  him.  In  such  a 
case  the  principal  has  a  right  to  full  compensation  for  the  loss  of 
his  bargain  by  recovering  damages  for  breach  of  the  contract,  and 
in  the  event  which  has  happened  the  commission  paid  the  broker 
is  paid  for  that. 

The  rule  is  the  same  when  the  broker  is  employed  to  get  for  his 
principal  a  certain  piece  of  land.  If  through  the  broker's  efforts 
a  binding  contract  is  made  between  his  principal  and  the  owner  of 
the  knd,  the  broker  has  earned  his  commission,  and  his  right  to 
it  is  not  affected  by  the  fact  —  if  it  turns  out  to  be  the  fact  —  that 
the  owner,  the  broker's  customer,  cannot  make  a  good  title.  The 
principal  has  his  remedy  by  recovering  full  damages  for  the  loss  of 
his  bargain  in  an  action  at  law  on  the  contract,  and  in  the  event 
which  then  happens  it  is  for  that  which  the  commission  is  paid. 

We  have  no  doubt  that  in  this  commonwealth  a  party  has  a  right 
to  recover  full  damages  for  the  loss  of  his  bargain  under  a  contract 
for  the  exchange  or  purchase  of  land  where  it  turns  out  that  the 
party  who  agreed  to  convey  the  land  has  not  a  good  title.  Brigham 
V.  Evans,  113  Mass.  538;  Eailroad  Corp.  v.  Evans,  6  Gray,  25,  33. 
The  rule  which  obtains  in  England  and  some  other  jurisdictions 
never  has  obtained  here. 

When  a  broker  employed  to  procure  a  person  to  convey  land  to 
his  principal  by  way  of  sale  or  exchange  in  good  faith  produces  a 
customer  as  a  person  ready,  able,  and  willing  to  do  so,  the  principal 
has  three  courses  of  action  open  to  him:  (1)  He  may  examine  the 
title  of  the  customer,  and  accept  him  or  not  accept  him  on  learning 
the  result  of  the  examination;  (2)  he  may  enter  into  a  contract  with 
him,  in  which  it  is  provided  that  his  title  shall  be  examined,  and 
if  it  turns  out  that  his  title  is  not  good,  the  contract  is  at  an  end; 
or  (3)  he  may  enter  into  a  binding  contract  with  him  for  the  con- 
veyance of  the  land.  In  case  he  takes  the  third  course  of  action, 
he  is  given  full  compensation  in  damages  for  the  loss  of  his  bargain 
if  the  customer  fails  to  fulfil  his  contract  by  conveying  the  land. 
Since  the  principal  gets  full  compensation  for  the  loss  of  his  bargain 
in  that  event,  there  is  no  escape  from  holding  that  the  broker  has 
earned  his  commission  when  his  efforts  have  resulted  in  the  making 
of  a  valid  contract.     It  does  not  lie  in  the  mouth  of  a  principal  to 


CHAP.    VII.]       COMPENSATION    DEPENDENT    UPON    PERFORMANCE.      217 

say  that  the  broker's  commission  has  not  been  earned,  when  he  has 
secured  through  the  broker's  efforts  the  land  he  wished,  or  full  com- 
pensation for  the  loss  of  it.  He  cannot  retain  the  right  to  this 
compensation,  and  not  pay  for  the  broker's  services  in  obtaining  it 
for  him. 

When  the  broker  knows  that  the  customer  produced  by  him  has 
not  a  title,  and  omits  to  tell  his  principal  of  that  fact,  he  has  not 
acted  in  good  faith,  and  has  not  earned  his  commission.  Bumham 
V.  Upton,  174  Mass.  408;  Butler  v.  Baker,  17  E.  I.  582. 

It  is  stipulated  in  the  agreed  facts  that  if  the  plaintiff  is  entitled 
to  recover,  the  amount  to  which  he  is  entitled  is  $800.  The  entry 
must  be. 

Judgment  for  the  plaintiff  for  $800,  with  interest  from  the  date 
of  the  writ. 


WHITCOMB   V.   BACON. 

170  Mass.  479.     1898. 

Action  for  commissions.  Judgment  for  plaintiff.  Defendant 
excepts  to  certain  rulings  of  the  trial  judge.  Defendant  authorized 
plaintiff  to  sell  his  property.  Plaintiff  negotiated  with  one  Went- 
worth,  but  failed  to  make  a  sale,  although  Wentworth  said  he  might 
possibly  give  $63,000,  which  defendant  then  refused  to  consider. 
Later  another  broker  took  the  matter  up  with  Wentworth  and  de- 
fendant and  negotiated  a  sale  at  $63,000,  upon  which  defendant 
paid  commissions. 

Allen,  J.  It  has  been  held  by  us  in  two  recent  cases  that  a 
broker  who  does  not  have  the  exclusive  sale  of  real  estate  does  not 
become  entitled  to  a  commission  merely  by  bringing  the  property 
to  the  attention  of  the  person  who  finally  buys  it,  but  he  must  also 
show  that  his  services  were  the  efficient  or  effective  means  of  bringing 
about  the  actual  sale.  Dowling  v.  Morrill,  165  Mass.  491;  Crownin- 
shield  V.  Foster,  169  Mass.  237.  Where  two  or  more  brokers  are 
employed,  there  is  no  implied  contract  to  pay  more  than  one  com- 
mission, and  it  therefore  becomes  necessary  to  lay  down  a  rule  for 
determining  which  one  of  different  possible  claimants  is  entitled 
to  be  paid.  A  similar  rule  exists  in  the  law  of  insurance,  stated 
thus  in  1  Phil.  Ins.  §  1132 :  "  In  case  of  the  concurrence  of  different 
causes,  to  one  of  which  it  is  necessary  to  attribute  the  loss,  it  is 
to  be  attributed  to  the  efficient  predominating  peril,  whether  it  is 
or  is  not  in  activity  at  the  consummation  of  the  disaster."  And 
again,  in  §  1137:  "If,  where  different  parties,  whether  the  assured 
and  the  underwriter,  or  different  underwriters,  are  responsible  for 
different  causes  of  loss,  which  concur  in  the  loss,  and  the  damage 


218  WHITCOMB   V.   BACON^.  [CHAP.   VII. 

by  each  cause  cannot  be  distinguished,  the  party  responsible  for 
the  predominating  efficient  cause,  or  that  by  which  the  operation 
of  the  other  is  directly  occasioned,  as  being  merely  incidental  to  it, 
is  liable  to  bear  the  loss."  This  latter  rule  is  expressly  accepted 
as  correct  in  Insurance  Co.  v.  Transportation  Co.,  12  Wall.  194, 
199,  the  court  saying:  "When  there  are  two  concurrent  causes  of  a 
loss,  the  predominating  efficient  one  must  be  regarded  as  the  proxi- 
mate, when  the  damage  done  by  each  cannot  be  distinguished." 
In  determining  what  constitutes  proximate  cause,  the  same  con- 
siderations apply  equally  in  actions  of  contract  and  of  tort.  New 
York  &  B.  D.  Exp.  Co.  v.  Traders  &  M.  Ins.  Co.,  132  Mass.  377. 
It  may  be  that  there  are  different  causes  which  assist  in  producing 
a  result,  and  that  the  result  would  not  have  happened  if  either  one 
of  the  different  causes  had  been  wanting.  A  familiar  example  is 
found  in  cases  where  there  has  been  a  delay  by  a  carrier  in  trans- 
porting goods,  which  are  afterwards  destroyed  by  flood  or  fire. 
Hoadley  v.  Transportation  Co.,  115  Mass.  304;  Denny  v.  Eailroad 
Co.,  13  Gray,  481;  Eailroad  Co.  v.  Eeeves,  10  Wall.  176.  So,  where 
several  brokers  have  each  endeavored  to  bring  about  a  sale  which 
finally  is  consummated,  it  may  happen  that  each  has  contributed 
something  without  which  the  result  would  not  have  been  reached. 
One  may  have  found  the  customer,  who  otherwise  would  not  have 
been  found,  and  yet  the  customer  may  refuse  to  conclude  the  bargain 
through  his  agency,  and  another  broker  may  succeed  where  the  first 
has  failed.  In  such  a  case,  in  the  absence  of  any  express  contract, 
that  one  only  is  entitled  to  a  commission  who  can  show  that  his 
services  were  the  really  effective  means  of  bringing  about  the  sale, 
or,  to  use  the  language  of  Phillips,  the  predominating  efficient  cause. 
The  instructions  of  the  learned  judge  to  the  jury  laid  special 
stress  on  the  inquiry  whether  the  sale  would  have  been  made  but  for 
the  efforts  of  the  plaintiffs.  He  said :  "  The  real  question  is  here 
whether  you  are  satisfied  that  this  sale  to  Wentworth  would  not  have 
been  made  but  for  the  efforts  which  the  plaintiffs  had  made  to  induce 
him  to  buy  it.  That  is  the  real  question."  And  afterwards :  "  The 
real  question  is,  and  it  is  the  crucial  question,  in  my  judgment, 
whether  the  sale  would  have  taken  place  without  the  efforts  made  by 
the  plaintiffs.  If  it  would,  then  the  plaintiffs  have  not  made  the 
sale,  and  they  cannot  recover  the  commission  unless  they  have. 
If,  however,  you  are  satisfied  this  sale  as  made  would  not  have  taken 
place  unless  the  plaintiffs  had  done  what  they  did,  and  that  what 
they  had  done  was,  at  the  time  of  the  sale,  an  operating  cause,  — 
not  the  sole  cause,  but  one  of  the  controlling  causes,  of  the  sale 
(and  the  burden  is  upon  the  plaintiffs  to  satisfy  you  of  that), — 
then  the  plaintiffs  can  recover."  This  rule,  as  it  seems  to  us,  would 
allow  two  brokers  to  recover  commissions  upon  the  same  sale.  There 
might  be  another  broker  whose  services  were  equally  meritorious 


CHAP.   Vir.]       COMPENSATION   DEPENDENT   UPON   PERFORMANCE.      219 

and  essential  in  producing  the  result.  But  in  such  a  case  it  is  not 
enough  to  show  that  one  of  several  causes  stood  in  such  a  relation 
to  the  result  that  without  it  the  result  would  not  have  happened, 
and  that  it  was  one  cause,  among  others,  which  assisted  or  contributed 
in  producing  it.  It  becomes  necessary  to  make  a  discrimination 
between  the  causes,  and  to  ascertain  which  is  the  particular  cause 
which  can  be  called  the  efficient  or  effective  one.  In  addition  to  the 
cases  cited  in  Dowling  v.  Morrill,  165  Mass.  491,  see  Railroad  Co. 
V.  Burrows,  33  Mich.  15;  Behling  v.  Pipe  Lines,  160  Pa.  St.  359; 
Romney  Marsh  v.  Trinity  House,  L.  R.  5  Exch.  204,  —  discussing 
questions  of  caiisa  causans,  as  distinguished  from  causa  sine  qua  non. 

Exceptions  sustained. 


DONOVAN   V.   WEED. 

182  N.  Y.  43.     1905. 

Appeal  from  a  judgment  of  the  Appellate  Division  of  the  Supreme 
Court  in  the  second  judicial  department,  affirming  a  judgment  in 
favor  of  plaintiff  entered  upon  a  verdict  and  an  order  denying  a 
motion  for  a  new  trial. 

Cullen,  Ch.  J.  The  action  was  brought  to  recover  commissions 
for  services  as  a  broker  in  effecting  the  sale  of  a  tract  of  wild  lands 
in  St.  Lawrence  county.  The  answer  put  in  issue  all  the  allegations 
of  the  complaint  except  the  defendants'  ownership  and  the  sale  of  the 
lands  mentioned  therein.  As  the  affirmance  below  was  unanimous,  the 
only  exceptions  which  can  be  reviewed  by  this  court  are  those  taken 
on  rulings  of  evidence  and  on  the  charge.  It  is,  therefore,  unneces- 
sary to  refer  to  the  details  of  the  evidence  given  to  support  the  conten- 
tions of  the  parties,  except  so  far  as  to  present  the  rulings  of  the  trial 
court. 

In  January,  1899,  the  defendants  gave  the  plaintiff  an  option  for 
the  sale  of  the  land  at  a  specified  price,  they  agreeing  to  pay  him  ten 
per  cent  commission  in  case  the  option  was  exercised  by  himself  or 
by  any  person  he  might  obtain.  On  August  31,  1900,  the  defendants 
gave  the  plaintiff  another  agreement  by  which  they  promised  to  pay 
him  one  dollar  an  acre  commission  if  he  should  bring  about  the  sale 
of  their  land  at  nine  dollars  per  acre,  the  option  to  continue  for  thirty 
days.  The  plaintiff,  on  September  26,  telegraphed  the  defendants  for 
an  extension  of  the  option,  which  the  latter  refused.  On  September 
29  the  plaintiff  sent  to  the  defendants  an  acceptance  of  the  option  by 
one  John  J.  Conklin,  who  it  was  admitted  was  an  irresponsible  party 
whom  the  plaintiff  had  induced  to  accept  the  option,  so  as  thereby  to 
get  an  extension  of  time.  On  December  27  the  defendants  wrote  to 
the  plaintiff  stating  that  Conklin  had  failed  to  carry  out  the  option, 


220  DONOVAN    V.    WEED.  [CHAP.    VII. 

and  that  in  consequence  thereof  they  (the  defendants)  withdrew  the 
same  and  terminated  the  relation  with  the  plaintiff  as  agent  for  the 
sale  of  the  land.  During  the  period  covered  by  these  transactions  the 
plaintiff  endeavored  to  effect  a  sale  of  the  lands  to  A.  A.  Low,  the 
owner  of  an  adjacent  tract,  but  no  sale  was  made.  In  the  February 
following  the  defendants  sold  the  lands  to  Mr.  Low,  as  they  claimed, 
through  the  agency  of  another  person.  The  learned  trial  court  sub- 
mitted the  case  to  the  jury  to  determine  whether  the  plaintiff  was  the 
efficient  cause  in  procuring  the  sale,  and  in  that  connection  charged 
the  following:  "He  (plaintiff)  had  gone  to  the  Adirondacks  at  that 
time  in  reference  to  this  property.  They  revoked  his  authority.  They 
had  a  right  to  revoke  it  at  any  time  they  saw  fit.  A  man's  authority 
to  a  broker  to  sell  his  property,  or  to  find  him  a  purchaser,  is  revoc- 
able at  any  time,  absolutely  revocable.  But  if  the  broker  has  already 
planted  the  seed,  which  afterwards  grows,  and  they  take  the  fruits 
of  it,  he  is  entitled  to  a  commission,  not  because  they  could  not 
revoke  the  authority,  but  because  the  question  is  whether  what  he  has 
already  done,  whether  the  crop  he  has  already  sown,  comes  up  and 
ripens.  If  it  does,  then  he  is  entitled  to  his  commission.  It  is  ex- 
actly the  counterpart  of  the  sowing  of  the  seed,  which  may  not  mature 
for  months,  but  if  it  does  mature,  although  it  matures  after  the 
authority  to  act  as  a  broker  has  been  revoked,  the  broker  is  entitled 
to  his  commission.  ...  It  is  for  you  to  say  whether  this  sale  was 
the  result,  in  that  sense,  of  Mr.  Donovan's  negotiations  with  Mr.  Low.'* 
At  the  conclusion  of  the  charge  counsel  for  the  defendants  asked  the 
court  to  instruct  the  jury  "  that  the  defendants  had  the  right  to  ter- 
minate his  employment  at  any  time  if  the  plaintiff  did  not,  within  a 
reasonable  time,  procure  a  purchaser  of  the  property."  To  this  the 
court  responded :  "  I  have  already  charged  that  and  I  charge  it  again. 
But  that  does  not  prevent  him  from  being  entitled  to  the  fruits  of  the 
seed  he  had  already  sown."    To  this  the  defendants  duly  excepted. 

The  materiality  of  these  instructions  of  the  court  and  their  vital 
character  is  apparent.  They  constituted  the  theory  on  which  the 
jury  either  did  award  or  might  have  awarded  the  verdict  in  favor 
of  the  plaintiff.  "We  think  they  were  essentially  erroneous.  The 
duties,  obligations  and  rights  of  brokers  were  most  fully  defined  by 
this  court  in  the  case  of  Sibbald  v.  Bethlehem  Iron  Co.  (83  N".  Y. 
378).  The  authority  of  that  case  has  never  been  impaired  or 
limited.  It  was  there  held  that  where  the  broker  has  been  allowed 
a  reasonable  time  to  procure  a  purchaser  and  effect  a  sale,  and  has 
failed  so  to  do,  and  the  principal  in  good  faith  has  terminated  the 
agency,  and  subsequently  a  sale  is  consummated,  the  fact  that  the 
purchaser  is  one  whom  the  broker  introduced  and  that  the  sale  was 
in  some  degree  aided  by  his  previous  efforts  does  not  give  him  a 
right  to  commission.  In  other  words,  the  law  as  settled  by  that 
case  is  that  to  entitle  a  broker  to  commission  he  must  procure  a 


CHAP.   VII,]      COMPENSATION   DEPENDENT   UPON    PERFORMANCE.      221 

purchaser  during  the  term  of  his  employment ;  that  where  no  definite 
time  is  fixed  the  broker  has  a  reasonable  time  in  which  to  effect  the 
sale;  but  that  after  the  lapse  of  a  reasonable  time  the  principal  may 
terminate  his  authority  and  relieve  himself  from  liability  unless 
such  action  is  taken  in  bad  faith  for  the  purpose  of  depriving  the 
broker  of  the  fruits  of  his  labor  at  .the  time  such  labor  was  about 
to  prove  effectual.  The  portion  of  the  charge  quoted  shows  that 
the  learned  trial  judge  entertained  a  view  of  the  right  of  the  broker 
to  compensation  in  direct  conflict  with  this  rule  and  so  instructed 
the  jury.  Even  the  analogy  that  he  suggested  to  the  jury  is  in  direct 
opposition  to  that  announced  by  Judge  Finch  in  the  Sibbald  case. 
The  trial  judge  said :  "  If  the  broker  has  already  planted  the  seed, 
which  afterwards  grows,  and  they  take  the  fruits  of  it,  he  is  entitled 
to  a  commission,  not  because  they  could  not  revoke  the  authority, 
but  because  the  question  is  whether  what  he  has  already  done,  whether 
the  crop  he  has  already  sown,  comes  up  and  ripens."  Judge  Finch, 
however,  wrote :  "  And  in  such  event  it  matters  not  that  after  his 
(the  broker's)  failure,  and  the  termination  of  his  agency,  what  he 
has  done  proves  of  use  and  benefit  to  the  principal.  In  a  multitude 
of  cases  that  must  necessarily  result.  He  may  have  introduced  to 
each  other  parties  who  otherwise  would  have  never  met ;  he  may  have 
created  impressions  which,  under  later  and  more  favorable  circum- 
stances, naturally  lead  to  and  materially  assist  in  the  consummation 
of  a  sale;  he  may  have  planted  the  very  seeds  from  which  others 
reap  the  harvest;  but  all  that  gives  him  no  claim."  Therefore,  the 
request  to  charge  made  by  the  defendants  was  correct,  and  the  trial 
court  erred  in  qualifying  that  request  by  the  instruction  that  such 
revocation  did  not  prevent  the  broker  (the  plaintiff)  from  being 
entitled  to  the  fruits  of  the  seed  he  had  already  sown. 

The  judgments  appealed  from  should  be  reversed  and  a  new  trial 
granted,  costs  to  abide  the  event. 

Gray,   O'Brien,  Bartlett^  Vann  and  Werner,  J  J.,  concur; 
Haight,  J.,  dissents. 

Judgments  reversed,  etc. 


HOLDEN  V.    STAEKS. 

159  Mass.  503.     1893. 

Contract,  to  recover  $50  as  a  commission  for  selling  defendant's 
real  estate.  The  trial  judge  directed  the  jury  to  return  a  verdict 
for  the  plaintiff;  and,  by  consent  of  the  parties,  reported  the  case 
for  the  determination  of  this  court.    The  facts  appear  in  the  opinion. 

Knowlton,  J.  By  the  terms  of  the  report,  if  the  verdict  for  the 
plaintiff  was  warranted  by  any  evidence  which  was  properly  admitted, 


222  CUTTER   V.   GILLETTE.  [CHAP.   Til. 

it  is  to  stand;  otherwise,  it  is  to  be  set  aside  and  judgment  entered 
for  defendant. 

It  was  proved,  and  not  disputed,  that  the  plaintiff  made  a  con- 
tract of  sale  of  the  defendant's  house  and  lot  to  one  who  for  a  long 
time  afterward  was  able,  ready,  and  willing  to  take  the  property 
and  pay  for  it  the  price  agreed,  and  who  was  prevented  from  doing 
so  by  the  defendant's  refusal  to  carry  out  the  contract.  A  payment 
of  part  of  the  purchase  money  was  made  to  the  plaintiff,  with  the 
intention  of  thereby  rendering  the  contract  irrevocable.  If  the 
plaintiff  was  authorized  to  make  the  sale  as  an  agent  employed  by 
the  defendant,  he  is,  under  these  circumstances,  entitled  to  com- 
pensation, notwithstanding  that  the  purchaser  could  not  have  been 
compelled  to  carry  out  his  contract  if  he  had  chosen  to  set  up  the 
statute  of  frauds.  It  was  the  defendant's  own  fault  that  the  sale 
was  not  consummated.  Cook  v.  Fisk,  12  Gray,  491;  Desmond  v. 
Stebbins,  140  Mass.  339;  Witherell  v.  Murphy,  147  Mass.  417;  Loud 
V.  Hall,  106  Mass.  404,  407;  McGavock  v.  Woodlief,  20  How.  221; 
Knock  V.  Emmerling,  22  How.  69';  Duclos  v.  Cunningham,  102  N.  Y. 
678;  Edwards  v.  Goldsmith,  16  Penn.  St.  43;  Prickett  v.  Badger, 
1  C.  B.  (n.  s.)  296.  .  .  . 

Judgment  on  the  verdict?- 


4.    Compensation  after  Revocation  of  Agency. 
CUTTER   V.    GILLETTE. 

163  Mass.  95.     1895. 

Action  to  recover  damages  for  breach  of  a  contract  of  employ- 
ment.    Judgment  for  plaintiff.     Defendant  alleges  exceptions. 

The  contract  was  for  five  years,  but  defendant  discharged  plaintiff 
after  three  months'  service.  The  court  allowed  damages  to  be 
assessed  to  the  time  of  the  trial,  and  from  the  trial  to  the  expiration 
of  the  five  years.  Plaintiff  had  tried  to  carry  on  carriage  manu- 
facturing on  his  own  account  after  the  breach,  but  had  failed.  De- 
fendant sought  to  show  that  plaintiff's  reputation  was  such  that  he 
could  not  get  credit,  but  this  evidence  was  excluded. 

Barker,  J.  The  evidence  offered  and  excluded  from  the  cross- 
examination  of  the  plaintiff  was,  in  effect,  that  his  personal  reputa- 
tion as  to  credit  among  dealers  was  so  poor  that  he  could  not  get 
credit  to  carry  on  the  business  in  which  he  attempted  to  work  after 
his  wrongful  discharge  from  the  defendant's  service.  Assuming  that 
the  defendant  was  entitled  to  show  that  the  plaintiff  might  have 

»  Contra:  Wilson  v.  Mason,  158  111.  304  (aetnUe). 


CHAP.   VII.]       COMPENSATION   AFTER  REVOCATION   OF  AGENCY.         223 

earned  more  money  than  he  did  between  the  time  of  his  discharge 
and  the  time  of  trial,  evidence  of  the  plaintiff's  poor  reputation  for 
credit  among  dealers  did  not  tend  to  show  that  he  could  have  suc- 
ceeded in  the  business,  and  it  was  rightly  excluded,  as  it  might  have 
had  a  tendency  to  prejudice  the  jury  against  the  plaintiff.  If  it  did 
not  have  that  effect,  its  only  tendency  would  seem  to  be  to  enhance 
the  plaintiff's  damages.  We  do  not  see  how  the  defendant  was 
harmed  by  the  exclusion  of  the  evidence. 

The  exception  to  the  refusal  to  instruct  the  jury  to  the  effect  that 
if  the  plaintiff,  after  his  discharge,  began  to  do  business  on  his  own 
account,  he  could  not  recover  damages  relating  to  the  period  of  time 
after  he  so  entered  into  business,  was  waived  at  the  argument. 

The  remaining  question  is  whether  or  not  the  jury  should  have 
been  allowed  to  assess  damages  for  the  period  of  time  subsequent 
to  the  trial.  The  plaintiff  was  hired  for  five  years  from  April  25, 
1892,  and  was  discharged  about  the  middle  of  July,  1892.  He 
brought  suit  on  November  10,  1892,  and  the  verdict  was  rendered 
on  March  14,  1894.  The  verdict  assessed  at  the  sum  of  $3,180.95, 
the  plaintiff's  whole  damages  for  breach  of  the  contract  for  hiring, 
and  stated  that  of  this  amount  $1,392.95  was  the  damage  to  the  time 
of  trial.  The  defendant  concedes  that  the  plaintiff  is  entitled  to 
recover  damages  for  an  entire  breach,  so  far  as  such  damages  can 
be  ascertained,  but  contends  that,  as  the  trial  occurred  before  the 
expiration  of  the  contract  period,  it  was  impossible  for  the  jury  to 
ascertain  or  assess  the  damage  for  the  unexpired  portion  of  the 
contract  period  subsequent  to  the  time  of  trial.  In  support  of  this 
contention  the  defendant  cites  the  cases  of  Colburn  v.  Woodworth, 
31  Barb.  381;  Fowler  v.  Armour,  24  Ala.  194;  Lichtehstein  v. 
Brooks,  75  Tex.  196,  12  S.  W.  975 ;  and  Gordon  v.  Brewster,  7  Wis. 
355,  —  in  which  cases  it  seems  to  have  been  held  that,  if  the  suit 
is  begun  before  the  expiration  of  the  contract  period,  damages  can 
only  be  allowed  to  the  time  of  the  trial.  He  asserts  that  in  the  case 
of  Howard  v.  Daly,  61  N".  Y.  362,  in  which  full  damages  were  given, 
the  writ  was  brought  after  the  expiration  of  the  contract  period. 
On  the  other  hand,  it  has  been  held  in  Vermont  that,  if  there  has 
been  such  a  breach  as  to  authorize  the  plaintiff  to  treat  it  as  entirely 
putting  an  end  to  the  contract,  he  may  recover  damages  for  an  entire 
non-fulfilment,  and  is  not  limited  to  what  he  has  actually  sustained 
at  the  time  of  his  bringing  suit  or  the  time  of  trial.  Remelee  v. 
Hall,  31  Vt.  582.  And  in  Maine,  in  an  action  for  breach  of  a  con- 
tract for  hiring,  brought  before  the  expiration  of  the  contract  period, 
it  was  held  that  the  just  recompense  for  the  actual  injury  sustained 
by  the  illegal  discharge  was  the  stipulated  wages,  less  whatever  sum 
the  plaintiff  actually  earned,  or  might  have  earned  by  the  use  of 
reasonable  diligence.  Sutherland  v.  Wyer,  67  Me.  64.  Such  would 
seem  to  be  the  rule  in  Pennsylvania.     See  King  v.  Steiren,  44  Pa. 


224  SUTHERLAND  V.   WTEE.  [CHAP,   VII. 

St.  99 ;  Chamberlin  v.  Morgan,  68  Pa.  St.  168.  And  the  defendant 
concedes  that  such  is  the  rule  in  England.  We  do  not  go  into  an 
exhaustive  consideration  of  the  decisions  upon  the  question,  as  we 
consider  it  to  have  been  settled  in  favor  of  the  ruling  given  at  the 
trial,  b)'  our  decisions.  Paige  v.  Barrett,  151  Mass.  67,  23  N.  E. 
725;  Blair  v.  Laflin,  127  Mass.  518;  Dennis  v.  Maxfield,  10  Allen, 
138;  Jewett  v.  Brooks,  134  Mass.  505.  See  also  Parker  v.  Russell, 
133  Mass.  74;  Amos  v.  Oakley,  131  Mass.  413;  Warner  v.  Bacon, 
8  Gray,  397,  408;  Drummond  v.  Crane,  159  Mass.  577,  581,  35 
N.  E.  90.  The  plaintiff's  cause  of  action  accrued  when  he  was  wrong- 
fully discharged.  His  suit  is  not  for  wages,  but  for  damages  for  the 
breach  of  his  contract  by  the  defendant.  For  this  breach  he  can  have 
but  one  action.  In  estimating  his  damages  the  jury  have  the  right 
to  consider  the  wages  which  he  would  have  earned  under  the  contract, 
the  probability  whether  his  life  and  that  of  the  defendant  would  con- 
tinue to  the  end  of  the  contract  period,  whether  the  plaintiff's  work- 
ing ability  would  continue,  and  any  other  uncertainties  growing  out 
of  the  terms  of  contract,  as  well  as  the  likelihood  that  the  plaintiff 
would  be  able  to  earn  money  in  other  work  during  the  time.  But 
it  is  not  the  law  that  damages,  which  may  be  larger  or  smaller  be- 
cause of  such  uncertainties,  are  not  recoverable.  The  same  kind  of 
difficulty  is  encountered  in  the  assessment  of  damages  for  personal 
injuries.  All  the  elements  which  bear  upon  the  matters  involved 
in  the  prognostication  are  to  be  considered  by  the  jury,  and  from 
the  evidence  in  each  case  they  are  to  form  an  opinion  upon  which 
all  can  agree,  and  to  which,  unless  it  is  set  aside  by  the  court,  the 
parties  must  submit.  The  liability  to  have  the  damages  which  he 
inflicts  by  breaking  his  contract  so  assessed  is  one  which  the  de- 
fendant must  be  taken  to  have  understood  when  he  wrongfully  dis- 
charged the  plaintiff,  and,  if  he  did  not  wish  to  be  subjected  to  it, 
he  should  have  kept  his  agreement. 

Exceptions  overruled. 


SUTHERLAND   v.   WYER. 

67  Me.  64.     1877. 

Assumpsit  to  recover  damages  for  breach  of  contract  of  employ- 
ment for  thirty-six  weeks  at  $35  a  week,  from  September  6,  1875. 
Plaintiff  was  discharged  January  8,  1876,  and  paid  in  full  to  that 
date.  The  action  was  begun  January  11,  1876.  Plaintiff  afterward 
found  like  employment,  but  left  it  voluntarily  before  the  expiration 
of  the  thirty-six  weeks  from  September  6th.  Verdict  for  plaintiff 
for  full  amount  of  salary  after  January  8th,  less  what  he  had  actually 
earned  in  other  employment.     Defendants  appeal. 


CHAP.   VII.]       COMPENSATION   AFTER   REVOCATION   OF   AGENCY.         225 

A^iRGiN,  J.  (after  deciding  that  the  action  was  not  prematurely 
brought).  There  are  several  classes  of  cases  founded  both  in  tort 
and  in  contract,  wherein  the  plaintiff  is  entitled  to  recover,  not  only 
the  damages  actually  sustained  when  the  action  was  commenced,  or 
at  the  time  of  the  trial,  but  also  whatever  the  evidence  proves  he  will 
be  likely  to  suffer  thereafter  from  the  same  cause.  Among  the  torts 
coming  within  this  rule  are  personal  injuries  caused  by  the  wrongful 
acts  or  negligence  of  others.  The  injury  continuing  beyond  the  time 
of  trial,  the  future  as  well  as  the  past  is  to  be  considered,  since  no 
other  action  can  be  maintained.  So  in  cases  of  contract,  the  per- 
formance of  which  is  to  extend  through  a  period  of  time  which  has 
not  elapsed  when  the  breach  is  made  and  the  action  brought  therefor 
and  the  trial  had.  Eemelu  v.  Hall,  31  Vt.  582.  Among  these  are 
actions  on  bonds  or  unsealed  contracts  stipulating  for  the  support 
of  persons  during  their  natural  life.  Sibley  v.  Eider,  54  Me.  463; 
Philbrook  v.  Burgess,  52  Me.  271. 

The  contract  in  controversy  falls  within  the  same  rule.  Although, 
as  practically  construed  by  the  parties,  the  salary  was  payable  weekly^ 
still,  when  the  plaintiff  was  peremptorily  discharged  from  all  further 
service  during  the  remainder  of  the  season,  such  discharge  conferred 
upon  him  the  right  to  treat  the  contract  as  entirely  at  an  end,  and 
to  bring  his  action  to  recover  damages  for  the  breach.  In  such  action 
he  is  entitled  to  a  just  recompense  for  the  actual  injury  sustained 
by  the  illegal  discharge.  Prima  facie,  such  recompense  would  be 
the  stipulated  wages  for  the  remaining  eighteen  weeks.  This,  how- 
ever, would  not  necessarily  be  the  sum  which  he  would  be  entitled 
to;  for  in  cases  of  contract  as  well  as  of  tort,  it  is  generally  incum- 
bent upon  an  injured  party  to  do  whatever  he  reasonably  can,  and  to 
improve  all  reasonable  and  proper  opportunities  to  lessen  the  injury. 
Miller  v.  Mariners'  Church,  7  Me.  51,  56;  Jones  v.  Jones,  4  Md. 
609;  2  Greenl.  Ev.  §  261,  and  notes;  Chamberlin  v.  Morgan,  68  Pa. 
St.  168;  Sedg.  on  Dam.  (6th  ed.)  416,  417;  cases  supra.  The  plain- 
tiff could  not  be  justified  in  lying  idle  after  the  breach;  but  he  was 
bound  to  use  ordinary  diligence  in  securing  employment  elsewhere, 
during  the  remainder  of  the  term;  and  whatever  sum  he  actually 
earned  or  might  have  earned  by  the  use  of  reasonable  diligence, 
should  be  deducted  from  the  amount  of  the  unpaid  stipulated  wages. 
And  this  balance,  with  interest  thereon,  should  be  the  amount  of  the 
verdict.  Applying  the  rule  mentioned,  the  verdict  will  be  found  too 
large. 

By  the  plaintiff's  own  testimony,  he  received  only  $60  from  all 
sources  after  his  discharge,  —  $25  in  February,  and  $35  from  the 
10th  to  the  20th  of  April,  at  Booth's.  His  last  engagement  was  for 
eight  weeks,  commencing  April  10th,  which  he  abandoned  on  the 
20th,  thus  voluntarily  omitting  an  opportunity  to  earn  $57,  prior 
to  the  expiration  of  his  engagement  with  the  defendants,  when  the 

16 


226  GLOVER   V.   HENDEESON.  [CHAP.    VII. 

law  required  him  to  improve  such  an  opportunity,  if  reasonable  and 
proper.  We  think  he  should  have  continued  the  last  engagement 
until  May  6th,  instead  of  abandoning  it  and  urging  a  trial  in  April, 
especially  inasmuch  as  he  could  have  obtained  a  trial  in  May  just 
as  well.  The  instructions  taken  together  were  as  favorable  to  the 
defendants  as  they  were  entitled  to. 

If,  therefore,  the  plaintiff  will  remit  $57,  he  may  have  judgment 
for  the  balance  of  the  verdict;  otherwise  the  entry  must  be 

Verdict  set  aside  and  new  trial  granted. 


GLOVEE   V.   HENDEESON. 
120  Mo.  367.     1893. 

Action  for  services  rendered  and  expenses  incurred  in  selling  lots 
for  defendant.     Judgment  for  plaintiff. 

Defendant  gave  plaintiff  the  exclusive  agency  to  sell  lots  in  a  plat 
at  a  specified  commission,  and  agreed  that  if  plaintiff  sold  the  whole 
plat  in  one  year  he  should  have  an  added  compensation  of  $1,500. 
All  expenses  of  advertising  and  sale  were  to  be  borne  by  plaintiff. 
After  plaintiff  had  sold  four-sevenths  of  the  plat,  and  before  the 
expiration  of  the  year,  the  defendant  revoked  the  agency.  The  jury 
allowed  plaintiff  the  reasonable  value  of  his  services,  including 
moneys  reasonably  expended  in  the  performance  of  his  duties. 

Black,  P.  J.  ...  1.  The  first  question  is  whether  this  action 
is  quantum  meruit  for  services  rendered  and  reasonable  expenses  in- 
curred, as  claimed  by  the  plaintiff;  or  whether  it  is  an  action  for 
damages  for  breach  of  contract.  That  the  petition  declares  upon 
quantum  meruit  we  think  there  can  be  no  doubt.  It  is  true  the 
petition  sets  out  the  contract  of  employment,  and  shows  that  services 
were  rendered  and  moneys  expended  in  the  execution  of  it;  but  it 
proceeds  to  aver  that  defendant  wrongfuly  discharged  the  plaintiff, 
and  then  states  the  value  of  the  services  rendered  and  moneys  ex- 
pended, and  prays  judgment  therefor,  less  the  amount  received. 
Had  the  plaintiff  declared  for  the  value  of  his  services,  saying  nothing 
about  the  contract  and  to  this  the  defendant  had  answered  by  setting 
up  the  special  contract  according  to  his  version  of  it,  and  the  plain- 
tiff ha*  replied  by  setting  out  the  contract  according  to  his  theory 
of  it,  and  alleged  that  the  defendant  wrongfully  revoked  the  agency, 
because  of  which  he  demanded  the  value  of  his  services  up  to  the  date 
of  his  discharge,  the  issues  would  have  been  in  substance  the  same 
that  they  are  under  the  present  pleadings.  It  is  the  theory  of  our 
code  that  the  plaintiff  must  state  the  facts  constituting  his  cause 
of  action.  If  he  proposes  to  treat  the  contract  as  rescinded  and 
recover  for  the  value  of  services  rendered,  as  he  may  do  under  certain 


CHAP.   VII.]       COMPENSATION   AFTER  REVOCATION  OF  AGENCY.         227 

circumstances,  there  is  no  reason  why  he  may  not  set  out  the  con- 
tract, the  rendition  of  services  thereunder,  the  wrongful  termination 
of  the  contract  by  the  defendant,  and  then  declare  for  the  value  of 
the  services  rendered.  Such  is  the  plaintiff's  petition  in  this  case, 
and  it  is  clearly  a  declaration  upon  quantum  meruit.  Ehrlich  v. 
Ins.  Co.,  88  Mo.  249. 

2.  The  contract  in  question  was  one  of  agency,  so  that  we  are 
brought  to  the  question  whether  defendant,  having  revoked  the 
agency,  is  liable  to  the  plaintiff  for  the  value  of  services  rendered 
and  expenses  incurred  up  to  the  date  of  revocation. 

There  is  and  can  be  no  claim  made  in  this  case  that  plaintiff 
had  conferred  upon  him  a  power  coupled  with  an  interest.  And 
as  he  had  no  interest  in  the  subject-matter  of  the  agency,  the  prin- 
cipal had  the  power,  and,  in  a  qualified  sense,  the  right,  to  revoke 
the  agency  at  his  will.  State  ex  rel.  v.  Walker,  88  Mo.  279 ;  Mechem 
on  Agency,  §  204.  But  the  question  of  the  liability  of  the  prin- 
cipal to  the  agent  for  services  rendered  is  another  and  a  different 
thing  from  the  power  or  even  right  to  terminate  the  agency.  Con- 
tracts of  agency  are  numerous  and  widely  variant  in  their  objects, 
purposes  and  terms;  so  that  the  question  of  compensation  of  the 
agent,  when  the  agency  has  been  revoked  by  the  principal,  will  depend 
upon  a  variety  of  circumstances.  It  is  laid  down  by  a  recent  text 
writer  that  "  the  mere  fact  that  an  agent  is  employed  to  perform 
a  certain  act  will  not,  of  itself,  amount  to  an  undertaking  on  the 
part  of  the  principal  that  the  agent  shall  be  permitted  to  complete 
the  act,  at  all  events,  and  the  principal  may  fairly,  and  in  good 
faith,  revoke  the  agency  without  liability  at  any  time  before  per- 
formance." But  "where  an  agent  is  employed  to  perform  an  act 
which  involves  expenditure  of  labor  and  money  before  it  is  possible 
to  accomplish  the  desired  object,  and  after  the  agent  has  in  good 
faith  incurred  expense  and  expended  time  and  labor,  but  before  he 
has  had  a  reasonable  opportunity  to  avail  himself  of  the  results 
of  this  preliminary  effort,  it  could  not  be  permitted  that  the  principal 
should  then  terminate  the  agency  and  take  advantage  of  the  agent's 
services  without  rendering  any  compensation  therefor."  Mechem 
on  Agency,  §  620.     This  is  good  sense,  and,  we  believe,  good  law. 

But  there  is  still  another  well  settled  and  more  specific  rule  which 
will  determine  this  branch  of  this  case,  and  that  is  this:  Where 
there  is  an  employment  for  a  definite  period  of  time,  expressed  or 
implied,  and  the  agent  is  discharged  without  cause  before  the 
expiration  of  that  period,  the  principal  will  be  liable  to  the  agent 
the  same  as  in  case  of  a  breach  of  any  other  contract;  and  in  such 
cases  the  agent  may  elect  to  treat  the  contract  as  rescinded,  and  bring 
an  action  to  recover  the  value  of  his  services  and  money  expended. 
Mechem  on  Agency,  §§  614,  621;  Ehrlich  v.  Ins.  Co.,  88  Mo.  249; 
Kirk  4^.  Hartman,  63  Pa.  St.  97. 


228  GLOVER  V.   HENDEESON.  [CHAP.    711. 

The  contract  between  the  plaintiff  and  the  defendant,  as  found 
by  the  jury,  contains  no  express  stipulation  to  the  effect  that  the 
agency  should  continue  for  one  year,  but  it  contains  the  stipulation 
that  the  plaintiff  should  have  an  additional  compensation  of  $1,500 
if  he  sold  the  lots  within  one  year ;  and  the  question  then  is  whether 
there  arises  an  implied  agreement  that  he  should  have  one  year  in 
which  to  sell  the  lots. 

Although  a  contract  on  its  face  and  by  its  terms  appears  to  be 
obligatory  on  one  party  only,  yet  if  it  was  the  manifest  intention 
of  the  parties  that  there  should  be  a  correlative  obligation  on  the 
other  party,  the  law  will  imply  such  obligation.  Lewis  v.  Ins.  Co., 
61  Mo.  534.  But,  as  said  in  Churchward  v.  Queen,  L.  R,  1  Q,  B. 
at  side  p.  195,  "  Where  a  contract  is  silent,  the  court  or  jury  who 
are  called  upon  to  imply  an  obligation  on  the  other  side  which  does 
not  appear  in  the  terms  of  the  contract  must  take  great  care  that 
tliey  do  not  make  the  contract  speak  .  .  .  contrary  to  what  .  .  . 
was  the  intention  of  the  parties."  The  question  after  all  is  one 
of  intention,  to  be  gathered  from  the  tenor  and  all  the  terms  of  the 
contract,  considered  in  the  light  of  the  subject-matter  of  which  the 
contract  treats. 

The  subject  of  the  agency  in  question  was  one  whole  addition, 
consisting  of  two  hundred  and  eighty  lots,  and  the  plaintiff  was 
to  have  the  exclusive  right  to  sell  all  of  them.  It  is  plain  to  be  seen 
that  the  $1,500  was  an  inducement  to  plaintiff  to  accept  the  agency. 
It  was  a  part,  and  a  considerable  part,  of  the  compensation  which 
he  was  to  receive.  It  is  true  this  part  of  the  consideration  was  con- 
ditional, that  is  to  say,  upon  the  fact  that  he  sold  the  lots  within 
one  year,  but  the  very  condition  shows  that  he  was  to  have  a  year 
in  which  to  perform  it.  His  right  to  have  a  year  in  which  to  sell 
the  lots  is  clearly  implied,  and  this  implied  part  of  the  agreement 
is  as  certain  and  definite  as  if  it  had  been  stated  in  so  many  words. 
This  conclusion  seems  to  us  irresistible. 

Nor  was  it  necessary  to  submit  this  question  to  the  jury;  for  the 
jury  found  that  the  plaintiff  was  to  have  an  additional  compensation 
of  $1,500,  if  he  sold  out  the  lots  within  one  year.  The  clear  intend- 
ment and  construction  of  this  language  is  that  he  was  to  have  a  year 
in  which  to  sell  out  the  addition. 

But  it  is  said  the  plaintiff  testified  that  he  reserved  the  right  to 
quit  the  work  at  any  time,  and  hence  the  defendant  had  the  corre- 
sponding right  to  terminate  the  agency  at  will,  notwithstanding  the 
agreement  concerning  the  $1,500.  The  plaintiff  testified  that  he  did 
not  bind  himself  to  sell  the  addition  for  $80,000  within  one  year,  or 
to  pay  a  forfeiture  if  he  failed  to  sell  it.  He  states  at  one  place  in 
the  lengthy  examination  that  he  did  not  bind  himself  to  devote  the 
entire  year  to  the  sale  of  Round  Top,  and  could  have  quit  at  any 
time,  but  he  was  not  that  kind  of  a  man.    At  another  place  he  says 


CHAP.   VII.]       COMPEXSATION   AFTER   EEVOCATION   OF   AGENCY.         229 

he  was  bound  to  give  his  time  and  attention  to  the  sale  of  the  land 
and  to  try  to  sell  it.  He  evidently  undertook  to  make  a  reasonable 
effort  to  sell  the  lots.  This  much  is  implied  in  the  terms  of  the 
agreement  found  by  the  jury  to  have  been  made  by  these  parties. 
It  is  equally  true  that  he  was  not  bound,  at  all  events,  to  continue 
his  efforts  during  the  entire  year.  But  it  does  not  follow  that  the 
defendant  had  the  right  to  revoke  the  agency,  without  cause,  at  any 
time  during  the  year.  Says  Mechem :  "  It  is,  in  many  cases,  difficult 
to  determine  whether  the  parties  have  made  a  definite  agreement 
for  a  fijEcd  time  or  not.  It  is  not  indispensable  that  they  should,  in 
the  first  instance,  be  both  bound  for  the  same  period.  It  may  law- 
fully be  made  to  rest  with  either  party  to  determine,  at  his  option, 
that  the  agreement  shall  be  one  for  a  certain  time."  Mechem  on 
Agency,  §  211. 

Such  questions  as  this  must  be  considered  in  the  light  of  the  nature 
and  object  of  the  agency,  and  the  agreement  which  the  parties  have 
made.  The  defendant  was  anxious  to  dispose  of  the  addition,  and 
the  scheme  devised  to  sell  it  was  problematical  and  doubtful.  The 
defendant  agreed,  as  we  have  seen,  to  give  the  plaintiff  one  year  in 
which  to  earn,  if  he  could,  the  extra  $1,500,  and  this  agreement  as 
to  time  is  not  void  or  unlawful  because  the  plaintiff  had  the  right, 
at  his  option,  to  abandon  the  contract  before  the  expiration  of  the 
year.  The  fact  that  the  plaintiff  had  such  right  or  option  gave  the 
defendant  no  right  to  terminate  the  agency  before  the  expiration 
of  the  year  so  long  as  the  plaintiff  was  making  diligent  efforts  to  sell 
the  lots. 

3.  As  the  plaintiff  can  maintain  this  action  to  recover  the  value 
of  his  services  and  the  reasonable  expenses  incurred  by  him,  it 
follows  that  he  had  the  right  to  produce  evidence  showing  the  value 
of  such  services.  Evidence  of  what  is  usually  charged  for  similar 
services  at  the  same  place  was  admissible.  And  it  was  also  competent 
to  show  by  persons  who  were  acquainted  with  the  value  of  like  ser- 
vices, what,  in  their  opinion,  the  services  of  the  plaintiff  were  worth. 
The  witnesses  called  by  the  plaintiff  for  this  purpose  were  real  estate 
agents,  and  their  evidence  shows  that  they  were  fairly  acquainted 
with  the  value  of  like  services.  The  fact  that  commissions  in  like 
cases  are  generally  regulated  by  contract,  and  the  further  fact  that 
these  lots  were  sold  under  what  is  called  a  unique  and  unusual  plan, 
did  not  affect  the  competency  of  the  evidence  of  the  witnesses  as 
to  the  value  of  the  services  rendered  by  the  plaintiff.  And  it  was  also 
competent  to  show  what  commissions  had  been  paid  in  the  same 
locality,  for  selling  other  additions.  The  differences  between  the 
plan  adopted  in  making  such  other  sales,  and  the  sales  in  question, 
would  be  a  matter  for  the  jury  to  consider,  but  such  differences  do 
not  affect  the  competency  of  the  evidence.  There  was  no  error  in 
the  admission  of  evidence  on  this  subject. 


230  CADIGAN   V.   CRABTREE.  [CHAP.    VU. 

4.  It  follows  also  from  what  has  been  said  that  the  measure  of 
the  plaintiff's  damages  was  the  reasonable  value  of  the  services 
rendered  and  the  moneys  fairly  expended  in  performing  such  ser- 
vices. The  instructions  as  to  damages  proceed  on  this  theory,  and 
there  is  no  error  in  them.  ... 

Judgment  affirmed. 

CADIGAN   V.    CEABTKEE. 
179  Mass.  474.     1901. 

LoRiNG,  J.  1.  The  presiding  justice  was  right  in  directing  a  ver- 
dict for  the  defendant  on  the  fifth  and  sixth  counts. 

There  was  no  evidence  which  would  have  warranted  a  verdict 
for  the  plaintiff.  The  most  that  could  have  been  found  in  favor  of 
the  plaintiff  was  that  the  defendant  employed  him  as  a  broker,  in 
September,  1898,  to  find  for  her  a  purchaser  for  the  Hotel  Reynolds, 
and  that  it  was  then  stated  that  he  was  the  only  broker  in  the  matter. 
The  plaintiff's  employment  in  the  matter  was  brought  about  by  one 
Oilman,  the  agent  in  Boston  of  the  defendant,  who  did  not  live  in 
that  city.  The  plaintiff  testified  that  Gilman  "  said  that  he  thought 
that  Miss  Crabtree,  from  his  conversation  with  her,  would  sell  the 
property  for  $800,000.  Under  a  suggestion  that  I  ask  $815,000,  I 
started  out."  The  plaintiff  got  several  offers,  —  one  for  $750,000 
in  cash,  and  another  for  $750,000,  part  in  cash  and  part  in  "  other 
property  in  trade."  These  offers  were  reported  to  the  defendant 
personally  between  November  7th  and  November  11th  of  the  same 
year,  and  were  refused.  The  defendant  then  fixed  her  price  at 
$1,100,000,  which  the  plaintiff  testifies  "  practically  stopped  the  nego- 
tiations." On  February  35,  1899,  the  defendant  notified  the  plaintiff 
that  she  was  willing  to  take  $850,000  for  the  property,  but  on  March 
1st  following  she  revoked  the  plaintiff's  authority  to  sell  the  estate 
at  all,  and  notified  him  that  she  had  put  the  property  in  the  hands 
of  another  broker  for  sale,  to  the  exclusion  of  the  plaintiff  and  every 
one  else. 

No  sale  of  the  property  has  been  made.  It  appears  that  the  de- 
fendant has  paid  the  plaintiff  the  amount  he  was  out  of  pocket  in 
the  matter. 

The  plaintiff's  contention  is  that  he  is  entitled  to  recover  damages 
from  the  defendant  for  preventing  him  from  earning  a  commission 
by  finding  a  person  who  would  buy  the  estate,  and  on  the  ground 
that  he  was  entitled  to  a  reasonable  time  in  which  to  find  a  cus- 
tomer, and  his  authority  to  do  so  was  revoked  before  that  time  had 
passed. 

Until  February  25th,  when  the  defendant  put  a  price  upon  the 
property,  it  is  plain  that  the  defendant  could  revoke  the  plaintiffs 


CHAP.   VII.]       COMPENSATION   AFTEB   REVOCATION   OF  AGENCY.         231 

employment  without  coming  under  any  liability  to  the  plaintiff  for 
80  doing.  We  take  February  25th  as  the  date  when  a  price  was  put 
upon  the  property,  because  the  plaintiff's  contention  was  that  the 
price  of  $1,100,000  put  upon  the  property  in  the  early  part  of 
November  could  not  seriously  be  regarded  as  a  price  that  could  be 
obtained  for  the  property.  Where  the  owner  of  property  employs 
a  broker  to  bring  him  an  offer  for  the  purchase  of  it,  without  naming 
a  price  at  which  he  is  willing  to  sell,  —  that  is  to  say,  where  the 
owner  of  property  employs  a  broker  to  bring  him  an  offer  which  he 
is  to  pass  upon  after  it  is  brought  to  him,  —  there  can  be  no  implied 
agreement  or  understanding  that  the  broker  is  to  be  entitled  to  a 
reasonable  time  in  which  to  procure  such  an  offer.  In  such  a  case 
the  owner  has  a  right  to  reject  every  offer  brought  to  him,  as  was 
held  in  Walker  v.  Tirrell,  101  Mass.  257 ;  and  it  is  plain  that  under 
those  circumstances  he  could  decide  not  to  accept  any  offer,  and  to 
dismiss  the  broker  altogether.  But  the  right  of  an  owner  to  put  an 
end  to  the  broker's  employment  is  based  on  a  consideration  which 
goes  deeper  than  that,  and  includes  the  case  where  a  price  is  named 
by  the  own^r  at  which  he  is  willing  to  sell  his  property.  That  con- 
sideration is  the  nature  of  a  brokerage  commission.  The  very  essence 
of  a  brokerage  commission  is  that  it  is  dependent  upon  success, 
and  that  it  is  in  no  way  dependent  upon,  or  affected  by,  the  amount 
of  work  done  by  the  broker.  A  brokerage  commission  is  earned  if 
the  broker,  without  devoting  much  or  any  time  to  hunting  up  a 
customer,  succeeds  in  procuring  one;  and  it  is  equally  true,  on  the 
other  hand,  not  only  that  no  commission  is  earned  if  a  broker  is  not 
successful,  but  a  broker  is  not  entitled  to  any  compensation,  no  matter 
how  much  time  he  has  devoted  to  finding  a  customer,  provided  a 
customer  is  not  found.  See,  in  this  connection,  Sibbald  v.  Iron  Co., 
83  N.  Y.  376,  383.  The  promise  to  pay  a  brokerage  commission, 
if  a  customer  is  found  to  purchase  at  a  stated  price,  is  not  the  ordi- 
nary employment  of  labor,  but  is  more  in  the  nature  of  an  offer, 
namely,  an  offer  to  pay  a  commission  if  a  person  is  produced  who 
buys  at  the  price  named;  and,  like  any  other  offer,  it  can  be  with- 
drawn at  any  time,  without  regard  to  the  fact  that  work  has  been 
done  by  a  person  in  reliance  on  it,  provided  the  work  done  has  not 
brought  the  person  within  the  terms  of  the  offer.  A  broker  who  has 
not  been  successful  in  procuring  a  customer  for  his  principal  is  never 
entitled  to  recover  on  a  quantum  meruit  for  work  done.  Where  a 
broker  has  done  work,  but  another  broker  has  closed  the  trade,  it  was 
held  that,  under  the  peculiar  circumstances  of  Bowling  v.  Morrill, 
165  Mass.  491,  not  that  he  could  recover  on  a  quantum  meruit  for 
work  done,  but  that  a  commission  was  earned  if  his  work  was  in 
fact  the  efficient  and  predominating  cause  of  the  sale ;  and  so,  where 
a  customer  is  found  to  purchase  property,  but  the  trade  is  not  made 
or  is  not  carried  through  because  the  broker's  principal  is  not  able. 


232  PEOPLE  V.   GLOBE   MUTUAL  LIFE   INS.    CO.        [CHAP.   VII. 

or  does  not  choose,  to  convey  the  property  for  which  he  employed  the 
broker  to  find  a  purchaser,  it  is  now  settled  that  the  broker's  remedy 
is  to  sue  his  principal  for  a  commission,  and  that  in  such  an  action 
he  can  recover  his  commission  (see  Fitzpatrick  v.  Gilson,  176  Mass. 
477,  and  cases  there  cited),  although  at  one  time  countenance  was 
given  to  the  proposition  that  in  such  a  case  the  remedy  of  the  broker 
was  on  a  quantum  meruit  for  work  done  (see  Drury  v.  Newman, 
99  Mass.  256,  258;  also  Walker  v.  Tirrell,  101  Mass.  257,  258,  citing 
with  approval  Prickett  v.  Badger,  1  C.  B.  [n.  s.]  296). 


PEOPLE   V.   GLOBE   MUTUAL   LIFE   INS.   CO. 

91  N.  Y.  174.     1883. 

Claim  by  James  C.  Mix  upon  funds  in  the  hands  of  the  receiver 
of  the  Globe  Mutual  Insurance  Company.  In  December,  1876,  Mix 
entered  into  a  contract  with  the  company  as  agent  for  five  years. 
In  May,  1879,  at  the  instance  of  the  state  the  company  and  its 
officers  and  agents  were  restrained  from  continuing  the  insurance 
business,  a  receiver  was  appointed,  and  the  corporation  dissolved. 
In  June,  1879,  Mix  was  notified  by  the  receiver  of  such  dissolution. 
Mix  claims  damages  for  the  breach  of  his  contract.  The  claim  was 
dismissed. 

Finch,  J.  There  was  no  breach  of  the  contract  between  Mix  and 
the  insurance  company  by  either  of  the  parties.  It  was  in  process 
of  continued  performance  according  to  its  terms,  and  was  unbroken 
at  the  moment  when  the  injunction  order  was  served.  That  operated 
npon  both  parties  at  the  same  instant,  and  perpetuated  the  then  ex- 
isting rights  and  conditions.  Before  its  service  the  company  had 
done  nothing  to  prevent  performance,  and  we  must  assume  was  both 
ready  and  able  to  perform.  It  had  done  no  act  which  amounted  to 
a  refusal,  or  which  made  it  unable  to  carry  out  its  contract.  For 
aught  that  appears  it  would  have  done  so  if  let  alone.  But  it  was 
not  permitted  to  perform.  The  state,  by  the  injunction  order 
operating  alike  upon  the  company  and  its  agents,  paralyzed  the  action 
of  both  the  contracting  parties,  so  that  neither  could  perform,  or 
put  the  other  in  the  wrong.  Thereupon  the  company  could  not  refuse, 
and  did  not  refuse.  To  put  it  in  the  wrong  and  make  it  liable  for 
a  breach  required  action  on  the  part  of  Mix.  As  a  condition  pre- 
cedent he  was  bound  to  show  both  ability  and  readiness  to  perform 
on  his  part.  Shaw  v.  Republic  Life  Ins.  Co.,  69  N.  Y.  292,  293; 
James  v.  Burchell,  82  id.  113.  He  could  do  neither.  Performance 
Tiy  him  had  become  illegal.  It  would  have  been  a  criminal  contempt, 
and  possibly  a  misdemeanor.    There  could  be  neither  readiness  nor 


I 


CHAP.   VII.]       COMPENSATION   AFTER   REVOCATION   OF   AGENCY.         233 

ability  to  do  the  forbidden  and  unlawful  acts.  Jones  v.  KnoAvles,  30 
Me.  402.  So  that  from  the  necessity  of  the  case,  as  there  was  no 
breach  on  either  side  before  the  injunction,  so  there  could  be  none 
after.  What  had  happened  was  a  dissolution  of  the  contract  by  the 
sovereign  power  of  the  state,  rendering  performance  on  either  side 
impossible.  And  this  result  was  within  the  contemplation  of  the 
parties,  and  must  be  deemed  an  unexpressed  condition  of  their  agree- 
ment. One  party  was  a  corporation.  It  drew  its  vitality  from  the 
grant  of  the  state,  and  could  only  live  by  its  permission.  It  existed 
within  certain  defined  limitations,  and  must  die  whenever  its  creator 
so  willed.  The  general  agent  who  contracted  with  it  did  so  with 
knowledge  of  the  statutory  conditions,  and  these  must  be  deemed  to 
have  permeated  the  agreement,  and  constituted  elements  of  the  obli- 
gation. People  V.  Security  Life  Ins.  Co.,  78  N.  Y.  115.  Then,  too, 
the  subject-matter  of  the  contract  was  that  of  skilled  personal  services 
to  be  rendered  by  one  and  received  by  the  other.  It  was  inherent  in 
the  bargain  that  a  substituted  service  would  not  answer.  The  com- 
pany were  not  bound  to  accept  another's  performance  instead  of  the 
chosen  agent's,  nor  was  he  in  turn  bound  to  work  for  some  other 
master.  The  contract  in  its  own  nature  was  dependent  upon  the 
continued  life  of  both  parties.  With  the  natural  death  of  one,  or 
the  corporate  death  of  the  other,  the  contract  must  inevitably  end. 
So  that,  in  its  own  inherent  nature,  by  the  unexpressed  conditions 
subject  to  which  it  was  made,  and  by  the  decree  enjoining  both 
parties  at  the  same  moment  from  further  performance,  the  contract 
was  terminated  and  no  breach  existed.  .  .  . 

In  all  of  the  cases  cited  there  was  no  incapacity  affecting  both 
parties  alike.  The  one  suing  for  a  breach  was  free,  so  far  as  he  was 
concerned,  to  offer  performance,  and  had  the  necessary  ability.  He 
could  thus  put  his  adversary  in  the  wrong,  while  here  the  same  blow, 
at  the  same  instant,  stopped  performance  on  both  sides  and  made  it 
illegal  on  the  part  of  either. 

But  exactly  at  this  point  the  learned  counsel  for  the  appellant 
interposes  a  proposition  which  presents  a  difficulty.  Practically  con- 
ceding most  that  we  have  said,  he  insists  that  the  contract  is  only 
dissolved  when  its  destruction  comes  from  an  outside  and  independent 
force,  operating  separately,  and  not  occasioned  directly  or  indirectly 
by  the  act  or  omission  of  the  party  pleading  it  as  an  excuse.  In  other 
words,  such  party  must  be  innocent  and  blameless  in  respect  to  vis 
major  which  dissolves  the  contract,  and  if  not  so,  cannot  plead  as  an 
excuse  what  practically  is  his  own  fault  and  act.  And  our  attention 
is  directed  to  this  feature  as  characterizing  the  cases  in  which  the 
agreements  were  held  to  have  been  ended.  They  are  grouped  in  the 
appellant's  points  and  need  not  be  repeated.  He  has  stated  their  pur- 
port correctly.     In  all  of  them  both  parties  were  innocent  of  and 


234  PEOPLE   V.   GLOBE   MUTUAL   LIFE  INS.    CO.        [CHAP.   VH. 

blameless  for  the  outside  and  independent  agency  which  dissolved  the 
contract.  And  the  argument  is  now  pressed  that  in  the  present  case 
the  company  was  not  only  not  blameless  for  its  dissolution,  but  that 
resulted  from  its  own  acts  or  omissions,  was  directly  caused  by  them, 
and,  therefore,  such  dissolution  must  be  deemed  its  own  act,  which 
it  cannot  plead  as  an  excuse.  This  leads  to  the  inquiry  whether  the 
company  was  so  the  responsible  cause  of  the  action  of  the  state  as 
to  make  the  dissolution  its  own  act. 

The  answer  is  that  no  such  fact  is  shown,  nor  is  it  a  necessary 
inference  from  the  facts  which  do  appear.  .  .  . 

If,  in  such  case,  in  some  sense,  such  dissolution  may  be  deemed 
the  act  of  the  company,  in  a  similar  sense,  and  through  the  same 
mode  of  reasoning,  we  might,  in  a  case  of  master  and  servant,  trace 
the  death  of  the  former  to  his  own  negligence  in  eating  or  drinking, 
or  exposure  to  heat  and  cold,  and  so  determine  his  non-performance 
to  be  inexcusable,  and  to  draw  after  it  damages  for  a  breach.     As 
it  is  thus  evident  that  a  man  may  be,  in  some  sense,  the  occasion,  or 
even  the  indirect  cause  of  his  own  death,  and  in  the  same  sense  blam- 
able  for  it,  without  its  being,  in  a  legal  sense,  and  considered  as  a 
vis  major,  his  own  act;   so  a  corporation  may  be  said,  through  the 
conduct  of  its  officers,  to  have,  in  some  sort,  occasioned  its  own 
corporate  death,  while  yet  it  would  remain  true  that  its  dissolution 
by  the  independent  force  of  the  state  would  be  not  its  own  act; 
not  at  all  the  product  of  its  own  volition;   and  not  a  breach  by  it 
of  its  contracts  previously  unbroken.     Especially  is  this  true  as 
between  the  company  and  its  own  officers  contracting  with  it.     One 
of  these  may  be  innocent  himself  of  any  wrongful  act  or  neglect, 
and  yet  it  is  inherent  in  the  nature  of  his  contract  that  he  takes  the 
risk  of  such  act,  or  neglect,  on  the  part  of  the  other  officers,  as  may 
tend,  under  the  law,  to  produce  a  dissolution,  if  such  dissolution  in 
fact  occurs.    That  possibility  entered  into  his  contract  when  made, 
and  belonged  to  it  as  an  inevitable  condition,  for  its  complete  per- 
formance depended  upon  the  corporate  life,  and  that  under  the  law 
upon  the  fulfillment  of  the  law's  conditions.     In  the  event  of  such 
corporate  death  the  motive  of  the  state  or  the  ground  of  its  act 
is  wholly  immaterial.     Its  risk  was  upon  the  contractor,  whatever 
its  cause  or  occasion;   and,  however  it  may  have  been  provoked  or 
induced,  it  must  be  deemed  the  act  of  the  state,  and  not  of  the  cor- 
porate body.    And  it  is  the  independent  act  of  the  state,  for  although 
the  reserve  may  have  fallen  below  the  prescribed  level,  a  dissolution 
is  not  the  necessary  consequence.     That  may  follow,  or  may  not 
follow.     The  superintendent  of  insurance  may  make  the  certificate 
which  sets  the  law  in  motion,  or  may  withhold  it.     The  matter  lies 
within  his  sole  discretion  and  control.     He  may  act  or  not,  as  he 
chooses;   but  if  he  does  it  is  his  act,  and  not  the  company's;    de- 


CHAP.   VII.]    .COMPENSATION  AFTER  RENUNCIATION  OF  AGENCY.      235 

pendent  wholly  on  his  volition  and  not  on  that  of  the  corporation; 
an  independent  agency  guided  by  its  own  motives,  and  not  the  act 
of  the  company  producing  its  own  death.  .  .  . 

Order  affirmed.^ 

5.   Compensation  after  Renunciation  of  Agency. 

TIMBERLAKE   v.   THAYER. 

71  Mi88.  279.     1893. 

Action  against  indorser  of  a  promissory  note.  Defence,  payment 
by  maker,  and  release  by  act  of  plaintiff  in  agreeing  with  the  maker 
that  the  latter  should  perform  services  for  the  former  in  payment 
of  the  note.  The  court  charged  that  if  the  maker  agreed  to  serve 
plaintiff  for  a  year,  but  abandoned  the  contract  before  the  end  of  the 
year,  he  could  recover  nothing  for  the  services  performed.  The  court 
refused  to  charge  that  such  a  contract  would  release  defendant. 
Judgment  for  plaintiff. 

Cooper,  J.  If  we  were  authorized  to  make  the  law,  instead  of 
announcing  it  as  it  is  already  made,  we  would  unhesitatingly  hold 
that  one  contracting  to  render  personal  service  to  another  for  a 
specified  time,  could,  upon  breach  of  the  contract  by  himself,  recover 
from  that  other  for  the  value  of  the  service  rendered  by  him  and 
received  by  that  other,  subject  to  a  diminution  of  his  demand  to  the 
extent  of  the  damage  flowing  from  his  breach  of  contract.  In  Britton 
V.  Turner,  6  N.  H.  481,  Judge  Parker  demonstrates,  in  an  admirable 
and  powerful  opinion,  the  equity  of  such  a  rule;  and  it  was  held  in 
that  case  that  such  was  the  rule  of  the  common  law.  The  courts  of 
some  of  the  states  have  followed  or  been  influenced  by  that  opinion, 
and  have  overturned  or  mitigated  the  rigorous  rule  of  the  common 
law.  Pixler  v.  Nichols,  8  Iowa,  106  (74  Am.  Dec.  298) ;  Coe  v. 
Smith,  4  Ind.  79  (58  Am.  Dec.  618)  ;  Eiggs  v.  Horde,  25  Tex.  Supp. 
456  (78  Am.  Dec.  584)  ;  Chamblee  v.  Baker,  95  N.  C.  98;  Parcell  v. 
McComber,  11  Neb.  209.  But  the  decided  weight  of  authority  is  to 
the  contrary.  Lawson  on  Contracts,  §  470,  n.  4,  and  authorities 
there  cited.  And  it  was  decided  at  an  early  day  in  this  state  that 
an  entire  contract  of  this  character  could  not  be  apportioned,  and 
that  under  the  circumstances  named  no  recovery  could  be  had  by  the 
party  guilty  of  the  breach  of  contract ;  that  he  could  not  recover  on 
the  special  contract  because  he  himself  had  not  performed,  nor  upon 
quantum  meruit,  because  of  the  existence  of  the  special  contract. 

'  In  Bovine  v.  Dent  (21  T.  L.  Rep.  82)  it  was  held  that  where  a  partnership 
agreed  to  serve  as  agent  for  a  fixed  term,  the  voluntary  dissolution  of  the  partner- 
ship terminated  the  contract  and  the  principal  could  not  maintain  an  action  for  the 
breach  ;  that  there  was  no  implied  term  in  the  contract  that  the  partnership  should 
be  continued. 


236  DAVIS  V.   MAXWELL.  [CHAP.   VII. 

Wooten  V.  Read,  2  Smed.  &  M.  585.  In  Hariston  v.  Sale,  6  Smed. 
&  M.  634,  and  Robinson  v.  Sanders,  24  Miss.  391,  it  was  held  that 
an  overseer's  contract  with  his  employer,  though  made  for  a  definite 
time,  was  not  an  entire  contract,  and  recoveries  were  allowed  on  the 
common  counts. 

The  cases  relied  on  to  support  the  rule  announced  in  these  de- 
cisions were  Byrd  v.  Boyd,  2  McCord  (So.  Car.)  246;  Eaken  v. 
Harrison,  id.  249;  McClure  v.  Pyatt,  id.  26.  Of  these,  the  leading 
case  is  Byrd  v.  Boyd ;  the  others  simply  follow  it.  In  Byrd  v.  Boyd, 
the  court  evidently  legislates  the  exception  into  the  law,  and  so,  in 
effect,  declared,  for,  after  referring  to  the  rule  of  the  common  law, 
the  court  proceeds  to  say :  "  There  is,  however,  a  third  class  of  cases 
for  which  it  is  necessary  to  provide,"  and  then  declares  that  these 
cases  for  which  it  is  necessary  for  the  court  "  to  provide  "  are  "  those 
where  the  employer  reaps  the  full  benefit  of  the  services  which  have 
been  rendered,  but  some  circumstance  occurs  which  renders  his  dis- 
charging the  overseer  necessary  and  justifiable,  and  that,  perhaps,  not 
iromediately  connected  with  the  contract,  as  in  the  present  case." 

The  South  Carolina  court  put  its  decision  expressly  upon  the 
ground  of  expediency,  and  confined  its  effect,  by  necessary  implica- 
tion, to  the  particular  sort  of  contract  under  consideration.  Since 
the  abolition  of  slavery  we  have  no  such  contracts,  stride,  as  those 
which  formerly  existed  between  employer  and  overseer,  and  the  de- 
cisions in  Wooten  v.  Read,  and  Hariston  v.  Sale  have  no  field  of 
operation.    The  instructions  for  the  plaintiff  were  properly  given. 

(The  court  then  decides  that  the  trial  judge  erred  in  refusing  the 
instruction  as  to  the  effect  of  such  a  contract  in  working  a  release 
of  the  surety,  and  on  this  ground  reversed  the  judgment.) 


DAVIS   V.    MAXWELL. 

12  Mete.  (Mass.)  286.     1847. 

Assumpsit  to  recover  for  three  months  and  one  day's  service  at 
twelve  dollars  a  month.  Defence,  an  entire  contract  for  seven  months 
and  breach  by  plaintiff.    Judgment  for  defendant. 

Hubbard,  J.  ...  In  regard  to  the  contract  itself,  which  was  an 
agreement  to  work  for  the  defendant  seven  months,  at  twelve  dollars 
per  month,  we  are  of  opinion  that  it  was  an  entire  one,  and  that  the 
plaintiff,  having  left  the  defendant's  service  before  the  time  expired, 
cannot  recover  for  the  partial  service  performed ;  and  that  it  differs 
not  in  principle  from  the  adjudged  cases  of  Stark  v.  Parker,  2  Pick. 
267;  Olmstead  v.  Beale,  19  Pick.  528;  and  Thayer  v.  Wadsworth,  19 
Pick.  349;    which  we  are  unwilling  to  disturb,  upon  mere  verbal 


CHAP.    VII.]       COMPENSATION    WHERE   AGENT  ACTS   FOR   BOTH.         237 

differences  between  the  contracts  in  those  cases  and  in  this,  which 
do  not  affect  its  spirit. 

The  plaintiff  has  argued  that  it  was  a  contract  for  seven  months, 
at  twelve  dollars  per  month,  to  be  paid  at  the  end  of  each  month. 
But  however  reasonable  such  a  contract  might  be,  it  is  not,  we  think, 
the  contract  which  is  proved.  There  is  no  time  fixed  for  the  pay- 
ment, and  the  law  therefore  fixes  the  time;  and  that  is,  in  a  case 
like  this,  the  period  when  the  service  is  performed.  It  is  one  bar- 
gain; performance  on  one  part  and  payment  on  the  other;  and  not 
part  performance  and  full  payment  for  the  part  performed.  The 
rate  per  month  is  stated,  as  is  common  in  such  contracts,  as  fixing 
the  rate  of  payment,  in  case  the  contract  should  be  given  up  by  con- 
sent, or  death  or  other  casualty  should  determine  it  before  its  expira- 
tion, without  affecting  the  right  of  the  party.  Such  contracts  for 
hire,  for  definite  periods  of  time,  are  reasonable  and  convenient,  are 
founded  in  practical  wisdom,  and  have  long  received  the  sanction 
of  the  law.    It  is  our  duty  to  sustain  them,  when  clearly  proved. 

The  rulings  and  directions  of  the  learned  judge,  we  think,  were 
correct,  and  the  exceptions  are  overruled. 


6.    Compensation  where  Agent  Acts  for  Both  Parties. 
CANNELL   V.    SMITH. 

142  Penn.  St.  25.     1891. 

Action  to  recover  back  $5,000  paid  by  plaintiff  to  defendant  as  a 
commission  for  effecting  a  sale  of  real  estate.  Judgment  for  plain- 
tiff.   Defendant  appeals. 

Defendant  was  employed  by  one  Massey,  who  represented  a  pro- 
spective purchaser  of  plaintiff's  property,  to  interview  plaintiff  as 
to  the  terms  on  which  she  would  sell,  Massey  agreeing  to  pay  de- 
fendant a  commission.  Defendant  represented  to  plaintiff  that  he 
would  act  for  her  upon  her  agreement  to  pay  him  one-half  of  all  the 
property  sold  for  over  and  above  $80,000.  Defendant  negotiated  a 
gale  to  Massey's  principal  for  $92,000,  and  accepted  $5,000  as  his 
commission.  Massey's  principal  demanded  that  defendant  should 
account  to  her  for  the  commission  received  from  plaintiff,  on  the 
ground  that  defendant  was  her  agent.  Defendant  thereupon  com- 
promised by  paying  $2,600  of  his  commission  to  Massey's  principal. 

The  court  excluded  the  testimony  of  one  Shallcross  offered  to  prove 
that  plaintiff's  property  sold  for  from  $10,000  to  $15,000  more  than 
it  was  worth,  and  charged  the  jury  that  it  was  immaterial  whether 
plaintiff  lost  anything  by  the  fact  that  defendant  represented  both 


238  CANNELL  V.   SMITH.  [CHAP.   VII 

parties,  and  that  if  defendant  represented  both  sides  without  the 
knowledge  of  plaintiff,  she  could  recover  back  the  money  paid  to 
him. 

Pee  Curiam.  The  defendant  was  a  real-estate  broker  and 
attempted  to  serve  two  masters.  There  is  high  authority  for  saying 
that  this  cannot  be  done.  Matt.  vi.  24.  The  plaintiff  paid  him  a 
commission  of  $5,000  for  effecting  a  sale  of  certain  real  estate,  in 
ignorance  of  the  fact  that  he  was  also  the  broker  or  agent  of  the 
purchaser.  When  she  discovered  that  he  was  acting  in  this  dual 
character,  she  brought  this  suit  in  the  court  below  to  recover  back 
the  money  so  paid,  and  succeeded.  We  have  no  doubt  of  the  right  to 
recover  money  paid  under  such  circumstances.  It  is  against  public 
policy  and  sound  morality  for  a  man  to  act  as  broker  for  both  parties, 
unless  that  fact  is  fully  communicated  to  them.  The  right  to  re- 
cover being  established,  this  judgment  must  stand  unless  some  error 
was  committed  on  the  trial  below  by  which  the  defendant  was 
prejudiced. 

A  careful  examination  of  the  record  fails  to  disclose  any  such 
error.  The  court  was  not  asked  to  direct  a  verdict  in  favor  of  the 
defendant,  and  could  not  properly  have  done  so  in  view  of  the  evi- 
dence. This  disposes  of  the  first  assignment.  The  second  is  without 
merit.  The  payment  of  the  $2,600  to  the  Drexels  was  a  fact  in  the 
case.  The  defendant's  belief  as  to  his  moral  or  legal  liability  to  pay 
this  money  was  not  important ;  nor  was  it  material  that  he  had  never 
made  any  admissions  "  to  the  Masseys,  or  any  one  else,"  upon  this 
subject.  The  testimony  of  the  witness  Shallcross  was  properly  re- 
jected. The  plaintiff's  right  to  recover  did  not  depend  upon  the 
character  of  the  sale,  whether  advantageous  or  otherwise;  it  rested 
upon  the  higher  ground  of  public  policy:  Everhart  v.  Searle,  71 
Pa.  256,  The  instructions  complained  of  in  the  fourth  and  fifth 
assignments  are  free  from  error.  The  learned  judge  fairly  submitted 
to  the  jury  the  question  of  plaintiff's  knowledge  of  the  defendant's 
dual  character.  There  was  abundant  evidence  of  her  ignorance  upon 
this  point  to  go  to  the  jury.  She  testified  distinctly  that  the  defend- 
ant told  her  that  he  was  acting  for  her,  and  for  her  alone.  The 
defendant  did  not  deny  that  he  had  been  employed  by  the  purchasers. 
His  contention  was  that  he  had  ceased  to  act  for  them  before  he 
entered  the  service  of  the  plaintiff.  This  was  a  question  of  fact  for 
the  jury,  and  unfortunately  for  the  defendant  they  did  not  take  his 
view  of  it. 

Judgment  affirmed^ 


CHAP.   VII.]      COMPENSATION   WHERE   AGENT  ACTS   FOE  BOTH.         239 

EICE   V.   WOOD. 

113  Mass.  133.     1873. 

Contract  to  recover  a  broker's  commission. 

The  defendant  asked  the  court  to  instruct  the  jury  that  if  a  broker 
acts  for  both  parties  in  effecting  a  sale  or  exchange  of  property,  he 
cannot  recover  compensation  from  either  of  the  parties,  unless  both 
knew  and  assented  to  his  acting  for  both. 

The  court  refused  to  give  the  instruction  prayed  for,  but  did  in- 
struct the  jury  as  follows :  "  If  the  plaintiffs  were  employed  by  the 
defendant  as  brokers  to  exchange  his  stock  for  real  estate,  and  he 
was  informed  by  them,  or  had  knowledge,  that  they  were  to  make  the 
exchange  with  persons  whose  estates  had  been  left  in  their  hands  for 
exchange  or  sale,  and  that  they  were  to  receive  commissions  from 
those  persons  for  disposing  of  their  estates,  and  that  with  this  knowl- 
edge the  defendant  agreed  to  pay  the  plaintiffs  a  commission  for 
making  the  exchange,  the  fact  that  the  plaintiffs  were  employed  by 
and  were  to  receive  a  commission  from  the  other  parties  would  not 
in  itself  defeat  the  plaintiffs'  claim." 

The  jury  returned  a  verdict  for  the  plaintiffs,  and  the  defendant 
alleged  exceptions. 

Devens,  J.  In  this  case  there  was  evidence  at  the  trial  in  the 
court  below  that  the  plaintiffs  had  been  employed  by  a  third  person, 
who  had  promised  to  pay  them  a  commission  therefor,  to  dispose  of 
certain  real  estate,  and  that  afterwards,  without  the  knowledge  of 
such  person,  an  agreement  was  made  between  the  plaintiffs  and  the 
defendant,  by  which  the  plaintiffs  were  employed  to  act  for  the 
defendant  in  the  exchange  of  certain  stocks  held  by  him  for  real 
estate,  and  were  promised  a  commission  if  such  exchange  should  be 
effected,  the  defendant  knowing  at  the  time  that  the  plaintiffs  were 
employed  for  a  commission  to  sell  such  real  estate ;  and  further,  that 
afterwards  the  plaintiffs  introduced  the  defendant  to  the  owner  of 
such  real  estate,  and  by  the  instrumentality  of  the  plaintiffs  the 
exchange  of  the  defendant's  stock  for  such  real  estate  was  effected. 

If  this  were  an  action  by  the  plaintiffs  against  the  owner  of  the 
real  estate,  for  commissions  earned  in  disposing  thereof,  the  decision 
of  this  court  in  Farnsworth  v.  Hemmer,  1  Allen,  494,  would  be  con- 
clusive against  the  claim,  upon  the  ground  that  the  plaintiffs,  if  such 
fact  should  be  proved,  had  entered  into  a  relation  inconsistent  with 
the  confidence  reposed  in  them  by  such  owner,  and  placed  themselves 
in  a  position  antagonistic  to  his  interests.  This  case  presents,  how- 
ever, the  question  whether,  conceding  that  the  plaintiffs  could  not 
recover  their  commissions  from  the  owner  of  the  real  estate,  they 
may  not  recover  those  they  claim  to  be  entitled  to  from  the  defend- 


1840  EiCE  V.  WOOD.  [chap.  vii. 

ant,  as  he  knew  fully,  at  the  time  of  entering  into  his  contract,  the 
relation  in  which  the  plaintiffs  stood  to  the  third  party. 

It  was  the  duty  of  the  plaintiffs  to  get  the  highest  price  for  the 
Teal  estate  that  could  be  obtained  for  it  in  the  market;  while  the 
contract  between  the  plaintiffs  and  the  defendant  was  an  inducement 
to  the  plaintiffs  to  effect  a  sale  to  the  defendant,  even  if  it  was  on 
lower  terms  than  might  have  been  obtained  from  others,  because 
they  thereby  secured  their  commissions  from  both  parties.  It  was 
therefore  an  agreement  which  placed  the  plaintiffs  under  the  tempta- 
tion- to  deal  unjustly  with  the  owner  of  the  real  estate.  Walker  v. 
Osgood,  98  Mass.  348. 

Contracts  which  are  opposed  to  open,  upright,  and  fair  dealing  are 
opposed  to  public  policy.  A  contract  by  which  one  is  placed  under  a 
direct  inducement  to  violate  the  confidence  reposed  in  him  by  another 
is  of  this  character.  If  the  plaintiffs  were  guilty  of  injustice  to  the 
owner  of  the  real  estate,  by  placing  themselves  under  an  inducement 
to  part  with  it  at  less  than  its  full  market  value,  they  should  not  be 
allowed  to  collect  the  promised  commissions  on  the  sale  of  the  stock, 
which  was  the  consideration  for  which  they  put  themselves  in  such 
a  position.  'No  one  can  be  permitted  to  found  rights  upon  his  own 
wrong,  even  against  another  also  in  the  wrong.  A  promise  made  to 
one  in  consideration  of  doing  an  unlawful  act,  as  to  commit  an 
assault  or  to  practice  a  fraud  upon  a  third  person,  is  void  in  law; 
and  the  law  will  not  only  avoid  contracts,  the  avowed  purpose  or 
express  object  of  which  is  to  do  an  unlawful  act,  but  those  made  with 
a  view  to  place,  or  the  necessary  effect  of  which  is  to  place,  a  person 
Tinder  wrong  influences,  and  offer  him  a  temptation  which  may  in- 
juriously affect  the  rights  of  third  persons.  Nor  is  it  necessary  to 
show  that  injur)^  to  tliird  persons  has  actually  resulted  from  such  a 
contract,  for  in  many  cases  where  it  had  occurred  this  would  be 
impossible  to  be  proved.  The  contract  is  avoided  on  account  of  its 
necessarily  injurious  tendency.    Fuller  v.  Dame,  18  Pick.  472. 

We  are  of  opinion,  therefore,  that  the  judge  who  presided  at  the 
trial  erred  in  the  instruction  given,  and  that  the  defendant  was 
entitled  to  an  instruction  substantially  like  that  asked  for.  Nor  can 
the  ruling  be  sustained  upon  the  ground  suggested  at  the  bar,  that 
the  plaintiffs  were  middlemen  only,  bringing  the  parties  together 
and  doing  nothing  further,  the  parties  themselves  making  the  con- 
tract. In  Eupp  V.  Sampson,  16  Gray,  398,  the  plaintiff  was  per- 
mitted to  recover,  not  for  services  rendered  to  the  defendant  as  a 
broker,  but  for  the  performance  of  a  certain  specific  act,  namely  the 
introduction  of  the  other  party  to  him,  the  parties  after  such  intro- 
duction making  their  own  contract.  It  was  there  held  that  this  was 
not  such  a  fraud  upon  the  other  party,  who  also  paid  for  the  service 
of  the  plaintiff  in  introducing  him,  although  concealed  from  such 
party,  as  to  make  the  contract  of  the  plaintiff  with  the  defendant 


CHAP.  VII.]      COMPENSATION   WHERE  AGENT  ACTS  FOR  BOTH.        241 

void  for  illegality.  That,  however,  is  not  the  present  ease.  It  here 
appears,  by  the  bill  of  exceptions,  not  only  that  there  was  evidence 
that  the  plaintiffs  introduced  the  parties,  but  that,  through  the  in- 
strumentality of  the  plaintiffs,  the  exchange  was  effected,  and  that 
in  effecting  such  exchange  the  plaintiffs  acted  as  brokers  for  both 
parties.  It  is  to  be  observed  also,  that  both  the  instructions  asked 
for  by  the  defendant  and  those  given  by  the  presiding  judge  proceed 
upon  the  ground  that  the  plaintiffs  were  brokers,  and  not  middlemen 
only. 

Exceptions  sustained. 


SHOKT   V.   MILLARD. 
68  111.  292.     1873. 

This  was  an  action  brought  by  Mortimer  Millard  against  John 
Short,  to  recover  for  services  as  agent,  in  the  city  court  of  East 
St.  Louis.  The  plaintiff  recovered  judgment,  and  the  defendant 
appealed  to  the  circuit  court,  where  the  plaintiff  again  recovered 
judgment  for  $500  and  costs.  From  this  judgment  the  defendant 
appealed  to  this  court. 

Mr.  Justice  Walker  delivered  the  opinion  of  the  court. 

Appellee  sued  appellant  to  recover  for  services  as  agent  in  selling 
a  tract  of  land.  It  appears  that  appellant  agreed  that  if  appellee 
would  find  him  a  purshaser  for  a  piece  of  land,  he  would  pay  him 
$500.  The  evidence  shows  that  he  procured  a  purchaser  at  the  price 
fixed  by  appellant,  and  the  sale  was  consummated.  But  it  is  urged 
that  appellee  was  acting  as  the  agent  of  both  appellant  and  Loving- 
ston,  the  purchaser,  without  having  notified  appellant.  An  examina- 
tion of  the  evidence  shows  that  the  defence  is  not  established.  The 
only  evidence  we  find  in  support  of  the  defence  is  what  was  said  by 
Lovingston  when  the  sale  was  closed.  He  at  that  time  proposed  that 
appellee  should  prepare  the  deed,  as  he  was  acting  for  both  parties; 
but  the  proposition  was  declined,  appellant  at  the  time  saying  another 
attorney  did  his  business;  and  it  appears  that  appellee  was  present 
when  the  papers  were  executed.  He  was  there  at  the  instance  of 
Lovingston. 

There  is  no  doubt  that  appellee  was  the  agent  of  appellant  in  pro- 
curing a  purchaser,  and  the  evidence  shows  that  he  obtained  one  at 
the  full  price  fixed  by  appellant ;  and  when  he  had  fully  performed 
the  agency,  and  it  was  at  an  end,  he  then  received  a  retainer  from  the 
purchaser  to  see  that  the  papers  were  properly  prepared  and  executed. 
In  this  we  perceive  nothing  wrong  or  inconsistent.  It  is  true,  his 
retainer  by  Lovingston  grew  out  of  his  former  agency,  but  not  till 
after  that  relation  had  terminated.    When  he  found  the  purchaser 

16 


242  MONTEOSS   V.   EDDY   ET  AL.  [CHAP.   VII. 

he  was  no  longer  the  agent  of  appellant,  and  was  free  to  take  the 
retainer  from  Lovingston.  There  was,  then,  nothing  improper  or 
inconsistent  in  his  thus  acting.  The  evidence  sustains  the  finding 
of  the  jury. 

No  question  has  been  raised  as  to  the  jurisdiction  of  the  city  court 
to  try  the  case,  and  the  judgment  of  the  court  below  is  affirmed. 

Judgment  affirmed. 


MONTEOSS   V.   EDDY  et  al. 

94  Mich.  100.     1892. 

Action  to  recover  for  services  rendered  defendants  in  negotiating 
a  sale  of  their  lands.    Judgment  for  plaintiff.    Defendants  appeal. 

Defendants  promised  plaintiff  that  if  he  found  a  purchaser  for  the 
lands  at  $90,000  they  would  pay  him  for  his  services.  Plaintiff  at 
that  time  was  representing  a  prospective  purchaser,  to  whom  sub- 
sequently he  introduced  defendants,  and  who  purchased  the  lands  of 
defendants  at  $90,000.  The  purchaser  paid  plaintiff  $500  as  com- 
pensation. Defendants  paid  plaintiff  $250,  and  he  brought  this 
action  for  additional  compensation,  and  recovered  a  verdict  for  $250. 

DuRAND,  J,  ...  As  to  whether  the  payment  by  Pitts  &  Cranage 
to  the  plaintiff  of  $500  was  a  present,  or  was  paid  under  an  agree- 
ment made  by  them  for  his  services,  we  deem  it  immaterial.  If 
the  defendants  are  liable  at  all,  it  is  upon  their  agreement  to  pay  the 
plaintiff  for  his  services  if  he  made  a  sale  of  this  land  at  $90,000. 
Nothing  was  left  to  his  discretion.  He  had  nothing  to  do  with  the 
price.  He  had  simply  to  find  a  purchaser  willing  to  give  the  price 
asked;  and  it  can  be  of  no  importance  whatever  to  the  defendants 
whether  or  not  those  purchasers  also  paid  the  plaintiff  for  any  ser- 
vices he  may  have  rendered  them.  As  was  said  in  Ranney  v. 
Donovan,  78  Mich.  318: 

"  A  broker  who  simply  brings  the  parties  together,  and  has  no 
hand  in  the  negotiations  between  them,  they  making  their  own 
bargain  without  his  aid  or  interference,  can  legally  receive  com- 
pensation from  both  of  them,  although  each  was  ignorant  of  his 
employment  by  the  other." 

All  that  the  plaintiff  was  to  do  was  to  find  a  purchaser  at  a  cer- 
tain sum  fixed  and  agreed  upon.  Neither  his  efforts  nor  judgment 
were  to  be  employed  to  get  a  greater  price.  When  he  did  this,  and 
the  sale  brought  about  by  him  as  middleman  was  consummated,  he 
was  entitled  to  a  reasonable  compensation  for  his  services,  if  the 
jury  believed  his  version  of  what  the  contract  was,  as  they  evidently 
did  do.  If  the  plaintiff  made  any  misstatements  to  Pitts  &  Cranage 
in  reference  to  the  amount  of  pine  on  the  land,  or  to  its  quality, 


CHAP.   VII.J      COMPENSATION   WHERE  AGENT  ACTS  FOR  BOTH.        243 

and  thereby  induced  them  to  pay  the  sum  asked  for  it  by  the  de- 
fendants, certainly  the  defendants  cannot  complain;  nor  can  they 
be  heard  to  say  that,  because  Pitts  &  Cranage  paid  or  gave  plaintiff 
$500  for  services  performed  by  him  in  bringing  about  the  purchase, 
therefore  they  are  relieved  from  paying  him,  if  they  agreed  to  do 
so.  He  was  simply  acting  as  a  go-between  to  bring  the  buyers  and 
sellers  together,  to  make  their  own  bargain.  This  is  all  he  did  do; 
and  either  or  both  parties  in  such  a  case  would  be  legally  bound 
to  pay  such  sum  as  was  agreed  upon  for  the  services  rendered. 

We  do  not  find  any  prejudicial  error  in  the  case. 

The  judgment  will  be  affirmed,  with  costs  of  this  court  to  the 
plaintiff. 

The  other  justices  concurred. 

Gracie  v.  Stevens,  56  N,  Y.  App.  Div.  203.^  Eumsey,  J.  .  .  . 
There  can  be  no  doubt  of  the  general  rule  that  a  broker  who  is 
employed  to  sell  property,  and  whose  duty  it  is  not  only  to  find 
a  purchaser  but  to  negotiate  the  sale,  cannot  accept  any  compen- 
sation from  any  other  person  than  his  employer;  and  if  he  does 
make  an  agreement  to  be  paid  by  the  purchaser,  or  if  he  assumes 
a  position  with  reference  to  the  transaction  where  his  duty  and 
interest  might  clash,  he  loses  all  right  to  his  commissions  from  his 
employer.  Among  the  numerous  cases  where  that  rule  is  laid  down 
it  is  only  necessary  to  cite  Abel  v.  Disbrow,  15  App.  Div.  536,  and 
Knauss  v.  Krueger  Brewing  Co.,  142  N".  Y.  70;  but  that  rule,  as  is 
stated  in  the  cases  above  cited,  applies  only  to  a  case  where  the  duty 
of  the  broker  to  his  employer  calls  for  the  exercise  of  his  judgment 
or  discretion  when  he  must  confine  himself  to  acting  for  the  person 
who  employed  him  and  look  solely  to  him  for  his  reward.  But 
when  he  is  employed  simply  to  find  a  purchaser  upon  terms  fixed 
by  his  employer,  his  duty  is  performed  by  bringing  to  the  seller 
one  who  is  willing  to  purchase  upon  such  terms.  He  has  no  dis- 
cretion to  exercise,  and  there  is  no  reason  why  he  should  not  be 
permitted  to  take  from  the  purchaser  such  compensation  as  he  may 
see  fit  to  give  for  the  benefit  he  has  received  by  being  informed  of 
the  fact  that  he  would  be  able  to  make  such  a  purchase.  Knauss 
V.  Krueger  Brewing  Co.,  142  N.  Y.  70.  In  the  case  at  bar  it  is 
evident  that  the  terms  of  the  sale  were  fixed  by  the  defendants 
themselves,  and  that  all  the  plaintiff  had  to  do  in  that  regard  was 
to  state  to  the  intending  purchaser  the  price  and  the  terms  of  pay- 
ment upon  which  the  property  could  be  bought.  But  there  are  many 
other  things  which  he  might  do  which  are  not  matters  of  discretion ; 
for  instance,  in  this  case  it  appears  that  he  not  only  sought  a  pur- 
chaser but  informed  himself  as  to  the  extent,  the  value  and  the 
income  of  the  property,  and  learned  what  it  was  composed  of  and 

»  Affirmed,  171  N.  Y.  658,  no  opinion. 


244  TERRY   V.   BIRMINGHAM   NATIONAL   BANK.      [CHAP.    VII. 

the  liens  upon  it,  and  obtained  other  information  which  could  only 
be  acquired  with  effort  and  much  trouble,  and  which  undoubtedly- 
tended  to  bring  about  the  purchase  of  this  property  by  Eldridge. 
We  think  that  when  the  court  charged  the  jury  as  it  did,  it  had 
stated  quite  as  favorably  to  the  defendants  as  they  were  entitled  to 
have  the  limit  of  the  right  of  the  plaintiff  to  make  a  contract  for  com- 
pensation with  Eldridge,  and  when  they  found,  as  they  might,  that 
with  respect  to  all  matters  of  negotiation  no  discretion  was  vested 
in  the  plaintiff,  they  were  then  justified  in  finding  further  that  he 
was  entitled  to  a  verdict  against  the  defendants.* 


TERRY   V.   BIRMINGHAM    NATIONAL   BANK.* 
99  Ala.  566.     1892. 

Action  of  assumpsit  by  the  bank  to  recover  against  Terry  upon 
a  promissory  note.  Plea  of  set-off.  Judgment  for  plaintiff.  De- 
fendant appeals. 

The  note  in  question  was  secured  by  certain  stocks  deposited  with 
the  bank  as  collateral  security.  Defendant  gave  the  president  of  the 
bank  a  power  of  attorney  to  sell  the  stock  on  the  Stock  Exchange. 
The  president  employed  one  Lightfoot  to  sell  it.  Lightfoot  was  also 
employed  by  one  Rucker  to  buy  similar  stock.  Lightfoot  procured 
one  Bradfield,  also  a  member  of  the  exchange,  to  bid  for  Rucker. 
Lightfoot  offered  the  stock  on  the  exchange,  and  it  was  bid  in  by 
Bradfield  for  Lightfoot's  principal,  Rucker.  The  amount  was  cred- 
ited on  the  note,  and  this  action  is  for  the  balance  due  over  and  above 
this  credit  and  other  credits.  The  defendant  seeks  to  set  off  the  value 
of  the  stock  above  what  it  brought  on  this  sale. 

Coleman^  J.  .  .  .  The  principle  of  law  that  the  same  person 
cannot  be  both  buyer  and  seller  has  no  application  to  the  facts  of  the 
case.  R.  D.  Johnston  employed  Lightfoot,  a  member  of  the  Stock 
Exchange,  to  sell  this  stock.  One  E.  W.  Rucker,  the  purchaser, 
employed  Lightfoot  to  purchase  on  the  exchange,  at  a  limited  price, 
stock  of  the  character  offered  by  Johnston.  Johnston  knew  nothing 
of  Rucker's  engagement  or  intentions.  In  accordance  with  the  rules 
of  the  exchange,  Lightfoot  secured  the  services  of  Bradfield,  another 
member  of  the  exchange,  to  bid  the  price  fixed  by  Rucker.  Lightfoot 
knew  the  instructions  of  both  Johnston  and  Rucker,  but  neither 
Johnston  nor  Rucker  had  any  knowledge  of  each  other's  intentions, 
or  their  instructions  to  Lightfoot.  And,  as  we  have  stated,  there  is 
no  evidence  to  show  that  the  rules  of  the  Stock  Exchange,  which  were 
known  to  Terry,  were  not  observed,  or  that  the  stock  did  not  bring 

»  Contra,  Bartram  v.  Lloyd,  88  L.  T.  286  (semble). 
*  For  former  appeal  see  93  Ala.  599. 


CHAP.   VII.]      COMPENSATION    WHERE  AGENT  ACTS   FOE  BOTH.         245 

its'  fair  market  value,  which  was  credited  upon  the  note  of  the 
defendant. 

Under  any  view  we  take  of  the  case,  the  plaintiff  was  entitled  to 
the  general  charge  upon  all  the  evidence,  and  it  is  unnecessary  to 
consider  special  exceptions  to  the  rulings  of  the  court. 

Ajjirmed. 

ANDEEWS   V.   EAMSAY   &   CO. 

[1903]  2  K.  B.  635. 

Defendants  sold  plaintiff's  property  to  one  C.  for  £2,100,  saying 
that  was  the  best  price  they  could  get.  C.  paid  defendants  £100 
deposit,  and  defendants  paid  over  £50  to  plaintiff,  retaining  £50 
commission  with  plaintiff's  consent.  It  subsequently  transpired  that 
C.  had  paid  defendants  £20  commission.  Plaintiff  brought  an  action 
to  recover  this  from  defendants  and  they  paid  it  into  court.  The 
present  action  was  then  brought  to  recover  the  £50  commission 
retained  by  defendants.     Judgment  for  plaintiff. 

Lord  Alverstone,  C.  J.  In  this  case  an  action  was  brought  to 
recover  a  sum  of  £50,  which  had  been  retained  by  the  defendants 
with  the  assent  of  the  plaintiff  as  their  remuneration  for  their  ser- 
vices in  negotiating  the  sale  of  the  plaintiff's  house.  The  main  point 
of  the  case  is  the  suggestion  that,  because  the  defendants,  while  acting 
as  the  plaintiff's  agents,  had  received  from  the  purchaser  £20  as  a 
secret  profit,  and  because  when  that  was  discovered  by  the  plaintiff 
the  defendants  had  paid  over  that  £20  to  the  plaintiff,  the  plaintiff 
is  not  entitled  to  recover  back  from  the  defendants  the  amount  re- 
tained by  them  by  way  of  commission.  I  cannot  see  how  that  fact 
has  anything  to  do  with  the  matter.  The  £20  was  recoverable  by 
the  plaintiff  from  the  defendants  because  it  was  a  secret  profit  made 
by  them,  and  came  out  of  the  sum  which  the  purchaser  would,  it 
may  be  assumed,  have  been  willing  to  pay  for  the  house,  and  it  there- 
fore rightly  belonged  to  the  plaintiff.  That  the  plaintiff  was  un- 
doubtedly entitled  to  the  £20  seems  to  me  to  have  no  bearing  on  the 
question  whether  the  defendants  were  entitled  to  commission  from  the 
plaintiff.  It  is  said  that  the  defendants  ought  not  to  be  called  upon 
to  hand  over  the  £50  to  the  plaintiff  because  the  plaintiff  has  had 
the  benefit  of  their  services.  The  principle  of  Salomons  v.  Pender 
(1865),  3  H.  &  C.  639,  seems  to  me  to  govern  the  case,  and  it  is, 
in  my  opinion,  amply  sufficient  to  do  so.  In  that  case  it  was  held 
that  an  agent  who  was  himself  interested  in  a  contract  to  purchase 
property  of  his  principal  was  not  entitled  to  any  commission  from 
his  principal.  The  principle  there  laid  down  is  that,  when  a  person 
who  purports  to  act  as  an  agent  is  not  in  a  position  to  say  to  his 
principal,  "I  have  been  acting  as  your  agent,  and  I  have  done  my 


246  HIPPISLEY   V.    KNEE   BROTHERS.  [CHAP.    VII. 

duty  by  you,  he  is  not  entitled  to  recover  any  commission  from  that 
principal.  In  Salomons  v.  Pender,  3  H.  &  C.,  at  p.  643,  Bramwell, 
B.,  said :  "  It  is  true  that  .  .  .  the  defendant  has  had  the  benefit 
(if  it  be  one)  of  the  plaintiffs  services.  But  the  defendant  is  in 
a  position  to  say,  '  What  you  have  done  has  been  done  as  a  volunteer, 
and  does  not  come  within  the  line  of  your  duties  as  agent.' "  And 
in  the  same  case  Martin,  B.,  quoted  the  passage  from  Story  on 
Agency,  p.  262,  §  210.  .  .  . 

It  seems  to  me  that  this  case  is  only  an  instance  of  an  agent  who 
has  acted  improperly  being  unable  to  recover  his  commission  from 
his  principal.  It  is  impossible  to  say  what  the  result  might  have 
been  if  the  agent  in  this  case  had  acted  honestly.  It  is  clear  that 
the  purchaser  was  willing  to  give  £20  more  than  the  price  which  the 
plaintiff  received,  and  it  may  well  be  that  he  would  have  given  more 
than  that.  It  is  impossible  to  gauge  in  any  way  what  the  plaintiff 
has  lost  by  the  improper  conduct  of  the  defendants.  I  think,  there- 
fore, that  the  interest  of  the  agents  here  was  adverse  to  that  of  the 
principal.  A  principal  is  entitled  to  have  an  honest  agent,  and  it 
is  only  the  honest  agent  who  is  entitled  to  any  commission.  In  my 
opinion,  if  the  agent  directly  or  indirectly  colludes  with  the  other 
side,  and  so  acts  in  opposition  to  the  interest  of  his  principal,  he  is 
not  entitled  to  any  commission.  That  is,  I  tliink,  supported  both 
by  authority  and  on  principle;  but  if,  as  is  suggested,  there  is  no 
authority  directly  bearing  on  the  question,  I  think  that  the  sooner 
such  authority  is  made  the  better.  The  result  is  that  the  county 
court  judge  was  right,  and  this  appeal  must  be  dismissed. 

Wills,  J.,  and  Channel,  J.,  concurred. 

Appeal  dismissed.^ 


HIPPISLEY   V.   KNEE   BROTHERS. 

[1905]   1  K.  B.  1. 

Action  to  recover  discounts  allowed  to  plaintiff's  agents  on  a 
.printer's  bill  in  advertising  plaintiff's  goods  for  sale,  and  also  the 
commission  retained  by  the  agents.  Judgment  for  defendants.  By 
the  contract  defendants  were  to  be  repaid  all  out-of-pocket  expenses, 
including  advertisements,  etc.  They  charged  to  plaintiff  the  gross 
amount  of  the  printer's  bills  without  subtracting  the  discounts. 

Lord  Alverstone,  C.  J.  (after  deciding  that  the  plaintiff  could 
recover  the  amount  of  the  discounts).  .  .  .  The  other  claim  made 
by  the  plaintiff,  and  in  respect  to  which  we  did  not  call  upon  the 
defendants'  counsel,  was  that  in  consequence  of  the  defendants'  con- 

»  Accord :  Wadsworth  v.  Adams,  138  U.  S.  380 ;  McKInley  v.  Williams,  74  Fed. 
94 ;  Humphrey  v.  Eddy  Transportation  Co.,  107  Mich.  163 ;  Vennum  v.  Gregory, 
21  Iowa,  326 ;  Jansen  v.  Williams,  36  Neb.  869. 


CHAP.    VII.]       COMPENSATION   WHERE  AGENT   ACTS   FOB   BOTH.        247 

duct  they  were  not  entitled  to  retain  the  £30  which  they  had  de- 
ducted from  the  gross  proceeds  for  their  commission,  and  in  support 
of  that  claim  Mr.  Salter  relied  upon  the  judgment  of  this  court  in 
Andrews  v.  Eamsay,  [1903]  2  K.  B.  635,  where  we  held  that  a  dis- 
honest agent  could  not  recover  any  commission  at  all.  I  desire, 
speaking  for  myself,  to  say  that  in  this  case  I  am  satisfied  that  there 
was  no  fraud,  but  that  what  was  done  by  the  defendants  was  done 
under  a  mistaken  notion  as  to  what  they  were  entitled  to  do  under  the 
contract :  they  thought  that  by  reason  of  the  alleged  custom  they  were 
entitled  to  deduct  from  the  proceeds  of  sale  the  gross  amounts  of 
the  advertising  and  printing  bills.  That  is  enough  to  differentiate 
the  present  case  from  Andrews  v.  Eamsay  (1903),  2  K.  B.  635, 
where  we  were  dealing  with  an  agent  who  acted  with  downright 
dishonesty.  But  Mr.  Salter  went  further,  and  contended  that  if 
there  has  been  a  failure  by  the  agent  to  account  for  a  secret  discount 
received,  even  though  that  failure  may  have  been  due  to  a  bona  fide 
mistake,  he  is  not  entitled  to  receive  any  commission  or  remuneration 
for  his  services  from  the  principal.  I  am  not  prepared  to  go  that 
length.  If  the  court  is  satisfied  that  there  has  been  no  fraud  or 
dishonesty  upon  the  agent's  part,  I  think  that  the  receipt  by  him 
of  a  discount  will  not  disentitle  him  to  his  commission  unless  the 
discount  is  in  some  way  connected  with  the  contract  which  the  agent 
is  employed  to  make  or  the  duty  which  he  is  called  upon  to  perform. 
In  my  opinion,  the  neglect  by  the  defendants  to  account  for  the  dis- 
counts in  the  present  case  is  not  sufficiently  connected  with  the  real 
subject-matter  of  their  employment.  If  the  discount  had  been  re- 
ceived from  the  purchasers  the  case  would  have  been  covered  by 
Andrews  v.  Eamsay,  [1903]  2  K.  B.  635;  but  here  it  was  received 
in  respect  of  a  purely  incidental  matter;  it  had  nothing  to  do  with 
the  duty  of  selling.  It  cannot  be  suggested  that  the  plaintiff  got  by 
one  penny  a  lower  price  than  he  would  otherwise  have  got.  There- 
fore I  come  to  the  conclusion  that,  so  far  as  the  £30  commission  is 
concerned,  the  plaintiff  is  not  entitled  to  succeed. 

Kennedy,  J.  I  am  of  the  same  opinion.  .  .  .  With  regard  to  the 
£20  claim,  I  agree  with  my  Lord  that  this  is  not  one  of  the  cases  in 
which  it  would  be  just  to  deprive  the  agent  of  his  agreed  remuneration 
as  well  as  of  his  secret  profit.  I  feel  it  is  difficult  to  lay  down  any 
definite  rule  upon  the  subject  with  confidence,  but  I  would  venture 
to  suggest  the  following:  that  where  the  agent's  remuneration  is  to 
be  paid  for  the  performance  of  several  inseparable  duties,  if  the  agent 
is  unfaithful  in  the  performance  of  any  one  of  those  duties  by  reason 
of  his  receiving  a  secret  profit  in  connection  with  it  —  and  I  here 
use  that  word  "unfaithful"  as  including  a  breach  of  obligation 
without  moral  turpitude  —  it  may  be  that  he  will  forfeit  his  remu- 
neration, just  as  in  certain  cases  a  captain  of  a  ship  might  be  held 
in  the  Admiralty  Court  to  forfeit  his  wages  as  a  result  of  misconduct 


248  RICHARDSON   V.   BBIX.  [CHAP.   VII. 

in  any  branch  of  his  duty  as  a  captain ;  but  where  the  several  duties 
to  be  performed  are  separable,  as  to  my  mind  they  are  in  the  present 
case,  the  receipt  of  a  secret  profit  in  connection  with  one  of  those 
duties  would  not,  in  the  absence  of  fraud,  involve  the  loss  of  the 
remuneration  which  has  been  fairly  earned  in  the  proper  discharge 
of  the  other  duties.  Here  the  auctioneers  were  employed  for  a  cer- 
tain commission  to  act  faithfully  as  auctioneers.  If  they  had  im- 
properly by  connivance  sold  to  a  purchaser  at  a  lower  price  than  they 
could  fairly  have  got  they  would  clearly  not  have  been  able  to  recover 
their  commission.  There  is  nothing  of  this  kind  in  the  present  case. 
But  by  the  special  terms  of  their  contract  they  undertook,  in  addition 
to  their  duty  as  auctioneers,  that  if  the  plaintiff  would  pay  them 
their  out-of-pocket  expenses  they  would  truly  account  to  the  plaintiff 
for  those  expenses.  And  it  seems  to  me  that  it  would  be  wrong  to 
say  that  because  the  defendants  failed  in  the  performance  of  their 
duty  properly  to  account  for  the  out-of-pocket  expenses,  therefore 
they  are  not  to  have  their  commission,  although  they  performed  all 
their  duty  as  auctioneers  faithfully. 

EiDLEY,  J.     I  concur  in  the  judgment  of  my  Lord. 

Judgment  of  county  court  judge  varied  accordingly.^ 


7.    Compensation  for  Illegal  Services. 
BICHAEDSON   V.   BEIX. 

94  Iowa,  626.     1895. 

Action  by  broker  for  commissions.  The  court  directed  a  verdict 
for  defendant. 

Defendant  engaged  plaintiff  to  procure  a  purchaser  for  defend- 
ant's real  property,  and  plaintiff  procured  a  purchaser  to  whom 
defendant  sold  the  property.  Plaintiff  was  a  real  estate  broker  in 
Davenport.  The  city  ordinance  provided  that  no  person  should 
follow  the  business  of  real  estate  broker  without  first  obtaining  a 
license,  and^  provided  a  penalty  for  violation  of  the  ordinance. 

EoTHROCK,  J.  .  .  .  There  is  nothing  in  the  record  made  in  the 
court  below  from  which  it  may  be  inferred  that  the  ordinance  of  the 

*  If  the  agent  acts  for  each  party  unknown  to  the  other  and  sells  the  vendor's 
property  to  the  vendee  for  more  than  the  fixed  price  and  retains  the  excess,  both 
the  vendor  and  the  vendee  may  sue  him  for  such  excess.  Lewis  v.  Denison,  2  App. 
Cas.  D.  C.  387. 

If  the  agents  of  the  respective  parties  agree  to  pool  or  divide  their  commissions, 
they  forfeit  thereby  their  right  to  any  commissions  whatever.  Norman  v.  Roseman, 
59  Mo.  App.  682 ;  Levy  v.  Spencer,  18  Colo.  532.  But  if  the  vendor's  agent  agrees 
to  divide  his  commission  with  the  vendee  in  order  to  induce  the  latter  to  purchase 
at  the  price  fixed  by  the  vendor,  the  agent  does  not  forfeit  his  commission  thereby. 
Scott  V.  Lloyd,  19  Colo.  401. 


CHAP.   VII.]         COMPENSATION   FOR  ILLEGAL   SERVICES.  249 

city  was  not  fully  authorized  by  its  charter.  The  city  is  organized 
under  a  special  charter,  and  the  court  below  did  not  find  that  there 
was  a  want  of  authority  in  the  city  to  pass  the  ordinance,  and  that 
question  is  not  certified  to  this  court  for  decision.  The  only  question 
to  be  determined  is  whether  the  plaintiff,  being  an  unlicensed  real 
estate  agent,  may  recover  a  commission  for  procuring  a  purchaser 
for  defendant's  property.  We  think  the  court  correctly  held  that 
there  was  no  right  of  action.  It  is  a  general  and  well-established 
rule  of  law  that,  where  a  statute  or  valid  city  ordinance  absolutiely 
prohibits  the  carrying  on  of  such  a  business  as  the  plaintiff  was 
engaged  in  without  first  procuring  a  license  to  do  so,  he  cannot 
recover  for  services  rendered  in  that  occupation.  The  ordinance 
under  consideration,  in  express  terms,  prohibits  the  exercise  of  the 
calling  without  a  license.  In  Pangborn  v.  Westlake,  36  Iowa,  548, 
it  is  said :  "  There  is  no  doubt  that  the  well-settled  general  rule  is 
that,  when  a  statute  prohibits  or  attaches  a  penalty  to  the  doing  of 
an  act,  the  act  is  void,  and  will  not  be  enforced,  nor  will  the  law 
assist  one  to  recover  money  or  property  which  he  has  expended  in  the 
unlawful  execution  of  it;  or,  in  other  words,  a  penalty  implies  a 
prohibition,  and  makes  the  act  illegal  and  void."  In  Bishop  on 
Contracts,  §  473,  it  is  said :  "  Wages  earned  by  a  minor  forbidden 
by  a  statute  to  be  employed  m  the  particular  business,  or  by  a  school 
teacher  not  having  the  certificate  of  qualifications  which  a  statute 
provides  for,  or  by  a  broker  for  services  rendered  without  the  license 
ordained  by  a  statute,  .  .  .  cannot  be  recovered  in  a  judicial  tribu- 
nal." See,  also,  Dillon  v.  Allen,  46  Iowa,  299.  In  Buckley  v. 
Humason,  50  Minn.  195,  it  was  held  that  where,  by  a  valid  city 
ordinance,  it  was  made  unlawful  for  any  person  to  exercise  within 
the  city  the  business  of  a  real  estate  broker  without  a  license,  a 
person  so  engaged  in  violation  of  such  ordinance  could  recover  no 
commission  for  his  services.  It  will  be  understood  that  we  do  not 
hold  that  the  contract  between  the  vendor  and  purchaser  would  in 
such  case  be  void.  The  case  presented  is  whether  the  plaintiff  can 
recover  compensation  for  services  rendered  in  violation  of  an  or- 
dinance expressly  prohibiting  him  from  making  sales  of  real  estate 
without  a  license. 

The  judgment  of  the  district  court  is  affirmed.^ 

»  Accord :  Whitfield  v.  Huling,  50  111.  App.  179 ;  Yount  v.  Denning,  52  Kan.  629 ; 
Buckley  v.  Humason,  50  Minn.  195 ;  Johnson  v.  Hulings,  103  Pa.  St.  498 ;  Stevenson 
V.  Bwing,  87  Tenn.  46. 

Contra:  Fairly  v.  Wappos  Mills,  44  S.  Car.  227 ;  Prince  v.  Eighth  St  Baptist 
Church,  20  Mo.  App.  332 ;  Amato  v.  Dreyfus  (Tex.),  34  S.  W.  Rep.  450. 

One  engaged  In  other  business  who  makes  a  single  sale  for  another  is  not  within 
the  statute  requiring  a  license.  O'Neill  v.  Sinclair,  153  111.  525 ;  Johnson  v.  Wil- 
liams, 8  Ind.  App.  677. 


250  MOOEE   V.   APPLETON.  [CHAP.   VII. 

8.    Reimbursement  and  Indemnity. 
MOOEE   V.   APPLETON. 

26  Ala.  633.     1855. 

Trespass  on  the  case  to  recover  indemnity  for  damages  paid  by 
plaintiff  as  a  result  of  a  suit  against  him  by  one  Quinby  for  acts  done 
by  plaintiff  as  defendant's  agent.  Demurrer  to  complaint  overruled. 
Verdict  and  judgment  for  plaintiff.     Defendant  appeals. 

Plaintiff  by  direction  of  defendant  took  goods  out  of  the  possession 
of  Quinby,  which  defendant  claimed  were  his.  Quinby  brought  an 
action  of  trespass  against  plaintiff  and  had  judgment,  which  was 
paid. 

EiCE,  J.  Every  man  who  employs  another  to  do  an  act  which  the 
employer  appears  to  have  a  right  to  authorize  him  to  do,  undertakes 
to  indemnify  him  for  all  such  acts  as  the  agent  does  not  know  to  be 
unlawful,  and  as  would  be  lawful  if  the  employer  had  the  authority 
he  pretends  to  have.  Adamson  v.  Jarvis,  4  Bing.  66;  Story  on 
Agency,  §  339. 

Where  two  persons  are  claiming  title  to  personal  property  adversely 
to  each  other,  and  one  of  these  claimants  calls  upon  another  person 
to  take  it,  and  the  latter  has  reasonable  ground  to  believe  that  his 
employer  is  the  owner  of  the  property,  and  therefore  takes  it,  without 
knowing  at  the  time  that  such  taking  is  a  trespass  or  tort,  a  promise 
of  indemnity  will  be  implied  to  such  person,  although  it  subsequently 
turns  out  that  the  title  of  the  employer  was  not  good,  and  the  act 
of  taking  a  trespass.     Avery  v.  Halsey,  14  Pick.  174. 

In  all  such  cases,  a  promise  of  indemnity  is  implied,  upon  the 
plain  dictates  of  reason  and  natural  justice.  Gower  v.  Emery,  18 
Maine  E.  79 ;  Parsons  on  Cont.  36,  n.  x. 

The  promise  thus  implied  extends  only  to  such  losses  and  damages 
as  are  direct  and  immediate,  and  naturally  flow  from  the  execution 
of  the  agency.  In  other  words,  the  agency  must  be  the  cause,  and 
not  merely  the  occasion  of  the  losses  or  damages,  to  found  a  just 
right  to  reimbursement.  Story  on  Agency,  §  341;  Story  on  Con- 
tracts, §  176. 

Assumpsit  lies  upon  such  implied  promises.  An  action  on  the 
case  is  equally  maintainable,  and  it  is  said  to  be  the  more  appropriate 
remedy.  Myers  v.  Gilbert,  18  Ala.  467 ;  Adamson  v.  Jarvis,  and  other 
cases  cited  supra.  But  whether  the  action  be  assumpsit  or  case,  the 
declaration  is  bad,  on  demurrer,  if  no  breach  is  stated  in  it.  1  Chitt/s 
PL  337. 

When  the  declaration  is  in  case,  as  it  is  here,  and  shows  that  the 
losses  for  which  the  agent  is  seeking  indemnity  from  the  principal. 


CHAP.    VII.]  REIMBURSEMENT  AND  INDEMNITY.  251 

are  certain  damages  recovered  against  the  agent  for  taking  property 
by  the  direction  of  the  principal,  in  an  action  of  trespass  brought 
against  the  agent  by  the  true  owner  of  the  property,  the  declaration 
id  defective,  if  it  omits  to  state  that  the  taking  by  the  agent  was 
without  knowledge  on  his  part,  at  the  time  of  the  taking,  that  it  was 
a  trespass.  The  agent  must,  in  his  declaration,  negative  the  existence 
of  such  knowledge  on  his  part,  although  the  onus  of  proving  the 
existence  of  such  knowledge  may  be  on  the  principal;  for  the  rule, 
that  the  allegata  and  probata  must  correspond,  is  not  of  universal 
application.     Carpenter  v.  Devon,  6  Ala.  718. 

Each  count  of  this  declaration  is  bad,  for  the  omission  of  a  breach, 
and  also  for  failing  to  aver  that  the  agent,  at  the  time  of  the  taking, 
did  not  know  that  it  was  a  trespass  or  tort. 

An  averment  that  the  principal  had  notice  of  the  losses  and 
damages  sustained  by  the  agent  set  forth  in  the  declaration,  and 
failed  to  pay  the  same,  would  be  a  good  breach  in  such  a  case  as  this. 

We  admit  the  rule,  that  the  law  will  not  enforce  contribution  nor 
indemnity  between  wrong-doers.  But  that  rule  does  not  apply  to 
any  case  where  the  act  of  the  agent  was  not  manifestly  illegal  in 
itself,  and  was  done  bona  fide  in  the  execution  of  his  agency,  and 
without  knowledge  (either  actual,  or  implied  by  law)  that  it  was 
illegal.    Parsons  on  Cont.  p.  36,  n.  x. 

That  rule  is  applicable,  whenever  it  appears  that  the  act  of  the 
agent  was  manifestly  illegal  in  itself.  For  example,  if  A.  employ 
B.  to  assault  C,  and  B.  thereupon  does  assault  C,  and  is  subjected 
to  damages  therefor,  B.  cannot  recover  such  damages  from  A. :  the 
act  of  B.  being  clearly  illegal  in  itself,  the  law  implies  that  he  knew 
it  to  be  so,  and  therefore  will  not  enforce  his  claim  to  indemnity. 

The  rule  also  applies,  whenever  it  appears  that,  although  the  act 
of  the  agent  was  not  manifestly  illegal  in  itself,  yet,  in  fact,  he  knew 
it  to  be  unlawful  at  the  time  he  did  it.  For  example,  if  Appleton, 
at  the  time  he  took  the  property  claimed  by  Moore,  knew  that  Moore 
had  no  just  nor  lawful  right  to  it,  and  that  Moore's  claim  was  ground- 
less and  iniquitous,  and  that  it  really  belonged  to  some  other  person, 
such  knowledge  on  the  part  of  Appleton  at  the  time  of  the  taking 
would  defeat  any  recovery  by  him  for  any  loss  resulting  from  such 
taking,  although  he  took  it  as  the  agent  of  Moore,  and  by  Moore's 
direction.     Chappell  v.  Wysham,  4  Harris  &  Johns.  560. 

For  the  error  of  the  court  below  in  overruling  the  demurrers  to 
the  several  counts  of  the  declaration,  its  judgment  is  reversed,  and 
the  cause  remanded.^ 

»  Accord  :  Gower  v.  Emery,  18  Me.  79 ;  Drammoiid  v.  Humphrey,  39  Me.  347 ; 
Guemey  v.  St.  Paul,  etc.,  Ry.,  43  Minn.  496. 


252  HOWE   V.   BUFFALO,   N.    Y.    &   E.    R.    CO.  [CHAP.    VII. 

HOWE   V.   BUFFALO,   N.   Y.    &   E.   K.   CO. 
37  N.  Y.  297.     1867. 

Plaintiff  was  a  conductor  on  defendant's  railroad.  He  was  in- 
structed not  to  accept  certain  tickets.  One  H.  presented  such  a 
ticket  and  plaintiff  refused  it,  and,  as  H.  refused  to  pay  his  fare, 
removed  him  from  the  train.  H.  brought  an  action  against  plaintiff 
and  recovered  damages.  This  action  is  for  indemnity.  Judgment  for 
plaintiff. 

Porter^  J.  The  plaintiff  acted  in  good  faith  and  in  obedience  to 
the  defendant's  instructions.  He  supposed  the  company  to  possess 
the  authority  it  assumed,  and  he  found  himself  involved  in  a  serious 
liability  by  fidelity  in  discharge  of  a  duty  imposed  by  his  principal, 
where  he  was  wholly  free  from  intentional  wrong.  Under  these  cir- 
cumstances the  company  very  properly  assumed  the  burden  of  de- 
fending his  act.  Whether  the  judgment  recovered  against  him  was 
right  or  wrong,  is  a  question  which  does  not  arise  on  the  present 
appeal.  If  it  was  right,  the  defendant  should  have  paid  it,  without 
exposing  him  to  imprisonment,  for  an  act  done  in  good  faith,  in  the 
interest  and  by  the  orders  of  the  company.  If  it  was  wrong,  the 
error  should  have  been  corrected  by  a  review  of  the  Judgment. 
The  appellant  chose  to  abandon  the  defence  and  permit  him  to  be 
the  sufferer.  The  court  below  was  right  in  holding  that  the  plaintiff 
was  entitled  to  redress.  There  is  an  implied  obligation  on  the  part 
of  the  principal  to  indemnify  an  innocent  agent  for  obeying  his 
orders,  where  the  act  would  have  been  lawful  in  respect  to  both,  if 
the  principal  really  had  the  authority  which  he  claimed.  Adamson 
V.  Jarvis,  4  Bing.  66;  Coventry  v.  Barton,  17  Johns.  142;  Powell  v. 
Trustees  of  Newburgh,  19  id.  284,  289;  Story  on  Agency,  §§  339, 
34a 

The  record  of  the  judgment  recovered  by  Hotchkin  was  properly 
admitted  as  evidence.  Kip  v.  Brigham,  6  Johns.  158;  Blasdale  v. 
Babcock,  1  id.  517.  There  was  no  error  in  permitting  proof  of  the 
fact,  that  the  plaintiff  used  no  more  force  than  was  necessary,  in 
removing  Hotchkin  from  the  car.  It  appeared,  presumptively,  from 
the  record,  that  the  judgment  was  rendered  on  the  ground  that  the 
removal  itself  was  unlawful,  and  not  on  the  ground  of  excessive 
force  in  the  exercise  of  a  legal  right;  but,  it  could  not  prejudice  the 
defendant  to  exclude  any  possible  conclusion  that  the  latter  was  the 
ground  of  recovery.  Dunkle  v.  Wiles,  1  Kern.  420;  Gardner  v. 
Buckbee,  3  Cow.  120.  .  .  . 

The  judgment  should  be  afifirmed.  All  the  judges  concurring, 
except  BocKES,  J.,  who  took  no  part  in  the  decision. 

Judgment  affirmed. 


CHAP.   VII.]  BEIMBDRSEMENT  AND  INDEMNITY.  253 

D'ARCY   V.   LYLE. 

5  Bin.   (Pa.)  441.     1813. 

Action  of  indebitatus  assumpsit  for  money  paid  out  and  expended, 
and  services  rendered.    Verdict  for  plaintiff.    Motion  for  new  trial. 

D'Arcy  in  1804  received  from  Lyle  a  power  of  attorney  to  settle 
the  latter's  accounts  with  Suckley  &  Co.  in  Hayti.  On  his  way  to 
Hayti  he  was  chased  by  a  French  privateer  and  threw  overboard, 
among  other  papers,  this  power  of  attorney.  Suckley  &  Co.  consented 
to  deliver  Lyle's  goods  to  D'Arcy  if  the  latter  would  pay  a  balance 
due  them  from  Lyle.  This  was  agreed  to,  but  before  the  goods  were 
completely  delivered  they  were  attached  by  one  Eichardson  for  debts 
due  his  principals  from  Suckley  &  Co.  The  courts  awarded  the 
goods  to  D'Arcy  for  Lyle  conditioned  upon  his  giving  a  bond  to 
procure  an  authentic  power  of  attorney,  or  pay  to  Richardson  the 
invoice  value  of  the  goods.  The  power  of  attorney  was  afterward 
received  and  duly  noted,  and  the  bond  satisfied.  D'Arcy  sold  the 
goods  and  rendered  an  account  to  Lyle. 

Three  years  later,  upon  a  change  in  the  government  of  Hayti, 
Richardson  brought  suit  against  D'Arcy  to  recover  the  value  of  these 
goods.  The  courts  decided  for  D'Arcy  on  the  ground  that  his  bond 
had  been  satisfied ;  but  the  president,  Christophe,  issued  an  arbitrary 
order  that  D'Arcy  and  Richardson  should  fight  each  other,  and  that 
the  victor  should  have  judgment  in  the  suit.  D'Arcy  protested,  but 
finally  consented  to  the  wager  of  battle.  The  result  was  uncertain, 
and  Christophe  issued  an  order  that  they  should  fight  again.  D'Arcy 
sought  to  flee  the  country,  but  was  intercepted.  After  an  interview 
with  the  president,  he  consented  to  pay  Richardson  the  $3,000 
claimed,  and  the  Judgment  of  the  court  was  entered  to  that  ejffect. 
D'Arcy  paid  the  $3,000,  and  brings  this  action  to  recover  it  from 
Lyle. 

TiLGHMAN,  C.  J.  This  is  one  of  those  extraordinary  cases  arising 
out  of  the  extraordinary  situation  into  which  the  world  has  been 
thrown  by  the  French  revolution. 

If  the  confession  of  judgment  by  the  plaintiff  had  been  voluntary, 
it  would  have  lain  on  him  to  show  that  the  $3,000  were  justly  due 
from  the  defendant  to  Richardson,  or  the  persons  for  whom  he  acted, 
or  that  they  had  a  lien  on  the  goods  of  the  defendant  to  that  amount. 
But  the  confession  of  judgment  was  beyond  all  doubt  extorted  from 
the  plaintiff  by  duress,  and  he  did  not  yield  to  fears  of  which  a  man 
of  reasonable  firmness  need  be  ashamed.  The  material  fact  on  which 
this  case  turns  is,  whether  the  transactions  between  the  plaintiff 
and  Richardson  were  on  any  private  account  of  the  plaintiff,  or  solely 
on  account  of  the  defendant'.    That  was  submitted  to  the  jury,  and  we 


854  d'arcy  v.  ltle.  [chap.  vii. 

must  now  take  for  granted  that  the  proceedings  at  the  Cape  against 
the  plaintiff  were  in  consequence  of  his  having  received  possession 
of  the  defendant's  goods  from  Suckley  &  Co.  I  take  the  law  to  be 
as  laid  down  by  Heineccius,  TurnbuU's  Heinec.  c.  13,  pp.  269,  270, 
and  by  Erskine  in  his  Institutes,  2  Ersk.  Inst.  534,  that  damages 
incurred  by  the  agent  in  the  course  of  the  management  of  the  prin- 
cipal's affairs,  or  in  consequence  of  such  management,  are  to  be 
borne  by  the  principal.  It  is  objected  that  at  the  time  when  judgment 
was  rendered  against  the  plaintiff,  he  was  no  longer  an  agent,  having 
long  before  made  up  his  accounts,  and  transmitted  the  balance  to  the 
defendant.  But  this  objection  has  no  weight  if  the  judgment  was 
but  the  consummation  of  the  proceedings  which  were  commenced 
during  the  agency.  As  such  I  view  them,  and  I  make  no  doubt  but 
they  were  so  considered  by  the  jury.  It  is  objected  again,  that  no 
man  is  safe  if  he  is  to  be  responsible  to  an  unknown  amount,  for  any 
sums  which  his  agent  may  consent  to  pay,  in  consequence  of  threats 
of  unprincipled  tyrants  in  foreign  countries.  Extreme  cases  may  be 
supposed,  which  it  will  be  time  enough  to  decide  when  they  occur. 
I  beg  it  to  be  understood,  that  I  give  no  opinion  on  a  case  where  an 
agent  should  consent  to  pay  a  sum  far  exceeding  the  amount  of  the 
property  in  his  hands.  That  is  not  the  present  case,  for  the  property 
of  the  defendant,  in  the  hands  of  the  plaintiff  in  1804,  was  estimated 
at  $3,000.  The  cases  cited  by  the  defendant  show,  that  if  the  agent, 
on  a  journey  on  business  of  his  principal,  is  robbed  of  his  own  money, 
the  principal  is  not  answerable.  I  agree  to  it,  because  the  carrying 
of  his  own  money  was  not  necessarily  connected  with  the  business  of 
his  principal.  So  if  he  receives  a  wound,  the  principal  is  not  bound 
to  pay  the  expenses  of  his  cure,  because  it  is  a  personal  risk  which 
the  agent  takes  upon  himself.  One  of  the  defendant's  cases  was, 
that  where  the  agent's  horse  was  taken  lame,  the  principal  was  not 
answerable.  That  I  think  would  depend  upon  the  agreement  of  the 
parties.  If  A.  undertakes  for  a  certain  sum  to  carry  a  letter  for  B. 
to  a  certain  place,  A.  must  find  his  own  horse,  and  B.  is  not  answer- 
able for  any  injury  which  may  befall  the  horse  in  the  course  of  the 
journey.  But  if  B.  is  to  find  the  horse,  he  is  responsible  for  the 
damage.  In  the  case  before  us,  the  plaintiff  has  suffered  damage 
without  his  own  fault,  on  account  of  his  agency,  and  the  jury  have 
indemnified  him  to  an  amount  very  little,  if  at  all,  exceeding  the 
property  in  his  hands,  with  interest  and  costs.  I  am  of  opinion  that 
the  verdict  should  not  be  set  aside. 

Yeates,  J.  ...  I  see  no  reason  whatever  for  retracting  the 
opinion  I  had  formed  on  the  trial,  that  where  a  factor  has  acted 
faithfully  and  prudently  within  the  scope  of  his  authority,  he  is 
entitled  to  protection  from  his  constituent,  and  compensation  for 
compulsory  payments  exacted  against  him  under  the  form  of  law, 
for  the  transactions  of  his  agency.    The  flagitious  conduct  of  Chris- 


CHAP.   VII.]  REIMBURSEMENT  AND  INDEMNITY.  255 

tophe,  President  of  Hayti,  compelled  the  litigant  parties  under  his 
savage  power  into  a  trial  by  battle,  in  order  to  decide  their  civil  rights. 
He  influenced  the  civil  tribunal  of  the  first  district  of  the  province 
of  the  North,  sitting  at  the  Cape,  "  to  set  aside  a  former  judgment 
rendered  by  the  tribunal  of  commerce,  and  of  their  own  court,  and 
to  condemn  D'Arcy,"  according  to  the  language  of  the  sentence,  "  to 
pay  to  Thomas  Richardson  $3,000,  for  so  much  he  had  engaged  to 
him  to  pay  for  Suckley  &  Co.  for  merchandise,  which  the  latter  had 
delivered  to  him  as  belonging  to  James  Lyle,  whom  the  said  D'Arcy 
represented,  for  which  the  tribunal  do  reserve  to  D'Arcy  his  rights, 
that  he  may  prosecute  the  same,  if  he  thinks  proper,  against  the  said 
Lyle  or  Suckley,"  etc. 

The  defendant  appointed  the  plaintiff  his  attorney,  to  settle  and 
collect  a  debt  in  a  barbarous  foreign  country.  The  plaintiff  has 
transacted  that  business  with  fidelity  and  care,  and  remitted  the 
proceeds  to  his  principal.  He  risked  his  life  in  defence  of  the  in- 
terests of  his  constituent,  under  the  imperious  mandate  of  a  capri- 
cious tyrant,  holding  the  reins  of  government.  He  has  since  been 
compelled,  by  a  mockery  of  justice,  to  pay  his  own  moneys  for  acts 
lawfully  done  in  the  faithful  discharge  of  his  duties  as  an  agent; 
and  I  have  no  difficulty  in  saying,  that  of  two  innocent  persons,  the 
principal,  and  not  the  agent,  should  sustain  the  loss. 

In  Leate  v.  Turkey  Company  Merchants,  Toth.  105,  it  was  de- 
creed, that  if  a  consul  beyond  sea  hath  power,  and  do  levy  goods  upon 
a  private  merchant,  the  company  must  bear  the  loss,  if  the  factor 
could  not  prevent  the  act  of  the  consul.  The  decree  is  founded  in 
the  highest  justice,  and  its  reason  peculiarly  applies  to  the  present 
case.  D'Arcy  was  doomed  by  the  cruel  order  of  an  inexorable  tyrant, 
either  to  pay  the  $3,000,  or  in  his  hated  presence  to  fight  his  antag- 
onist until  one  of  them  should  fall. 

Upon  the  whole,  I  am  of  opinion  that  the  motion  for  the  new 
trial  be  denied. 

Brackenridge^  J.,  delivered  a  dissenting  opinion. 

New  trial  refused.^ 

»  a  contrary  decision  is  reached  by  a  trial  judge  In  Halbronn  v.  International 
Horse  Agency,  [1905]  1  K.  B.  270.  In  that  case  defendant  Instructed  plaintiflf,  an 
auctioneer  In  Paris,  to  advertise  and  sell  a  thoroughbred  mare  named  Pentecost. 
Plaintiff  advertised  the  mare  as  directed.  A  French  horse-breeder,  owning  a  thor- 
oughbred mare  registered  in  the  French  Stud  Book  as  Pentecost,  brought  an  action 
against  plaintiff  and  under  the  French  law  recovered  damages.  Plaintiff  sought  to 
compel  defendant  to  indemnify  him.  The  trial  Judge  without  citing  any  similar 
authority,  but  attempting  to  distinguish  prior  adverse  authorities,  held  that  in  the 
absence  of  a  false  representation  by  defendant  there  could  be  no  recovery. 

In  Clark  v.  Jones,  84  Tenn.  351,  the  agent  was  compelled  wrongfully  to  pay  for 
property  bought  for  his  principal  and  was  allowed  indemnity. 

In  Delafleld  v.  Smith,  101  Wis.  664,  a  sale  broker  was  denied  indemnity  for  dam- 
ages arising  from  the  non-delivery  of  the  goods  by  the  principal  because  he  sold  in 
his  own  name,  but  by  a  strange  Inconsistency  was  nevertheless  allowed  to  recover 
for  bis  commissions. 


25G        WHITNEY  ET  AL.  V.  MERCHANTS'  UNION  EX.  CO.       [CIIAP.   VIII. 


CHAPTER  VIII. 
Obligations  op  Agent  to  Prinoepai.. 

1.     Obedience. 

WHITNEY   ET   AL.   V.   MEECHANTS'   UNION 
EXPEESS    CO. 

104  Mass.  152.     1870. 

Contract,  with  alternative  count  in  tort,  for  negligence  of  de- 
fendants in  the  matter  of  the  collection  of  a  draft  drawn  by  plaintiffs, 
at  Boston,  upon  Plummer  &  Co.,  at  Providence.  Plaintiffs  instructed 
defendants  to  return  the  draft  at  once  if  it  was  not  paid.  Plummer 
&  Co.  objected  to  the  draft  as  being  $1.20  in  excess  of  their  debt,  and 
offered  to  write  to  plaintiffs  for  an  explanation.  Defendants  held 
the  draft;  Plummer  &  Co.  wrote  to  plaintiffs  and  received  a  satis- 
factory explanation ;  defendants  did  not  again  present  the  draft,  and 
two  days  after  Plummer  &  Co.  were  ready  to  pay  it,  the  firm  failed, 
and  paid  but  50  per  cent  of  its  liabilities.  This  action  is  to  recover 
the  balance,  by  way  of  damages,  from  defendants.  It  was  agreed 
that  if,  upon  the  facts,  the  jury  would  be  warranted  in  finding  a 
verdict  for  the  plaintiffs,  a  judgment  should  be  entered  for  the 
plaintiffs  for  $1,233.21  and  interest. 

Colt,  J.  Under  the  instructions  given  to  the  defendants  at  the 
time  they  received  this  draft  for  collection,  it  was  their  duty  to  collect 
it,  or  to  return  it  at  once  to  the  plaintiffs  if  not  paid.  It  was  duly 
presented  by  the  defendants'  messenger  for  payment  on  the  14th  of 
October,  and  payment  refused.  Instead  of  returning  the  draft  at 
once,  they  retained  possession  of  it,  in  order  to  enable  the  drawees 
to  obtain,  by  correspondence,  some  explanation  from  the  plaintiffs  as 
to  the  amount  for  which  it  was  drawn.  Satisfactory  explanations 
were  received  in  due  course  of  mail,  and  Plummer  &  Co.,  the  drawees, 
were  ready  on  the  morning  of  the  16th  of  the  same  month  to  pay 
the  full  amount.  But  the  draft  was  not  again  presented,  and  on  the 
19  th  they  failed  and  have  since  been  unable  to  pay. 

It  is  the  first  duty  of  an  agent,  whose  authority  is  limited,  to 
adhere  faithfully  to  his  instructions  in  all  cases  to  which  they  can 
be  properly  applied.  If  he  exceeds,  or  violates,  or  neglects  them, 
he  is  responsible  for  all  losses  which  are  the  natural  consequence  of 


CHAP.   VIII.]  OBEDIENCE.  257 

his  act.  And  we  are  of  opinion  that  there  is  evidence  of  neglect  in 
this  case,  upon  which  the  jury  would  have  been  warranted  in  finding 
a  verdict  for  the  plaintiffs. 

The  defendants  would  clearly  have  avoided  all  liability  by  return- 
ing the  draft  at  once,  upon  the  refusal  to  pay.  It  is  urged  that  the 
defendants  had  done  all  they  were  bound  to  do,  when  they  had 
presented  the  draft  and  caused  the  plaintiffs  to  be  notified  of  its 
non-payment;  that  the  notice  which  was  immediately  communicated 
by  the  letter  of  Plummer  &  Co.,  asking  explanation,  was  equivalent 
to  a  return  of  the  draft;  that  this  notice  was  given  by  the  procure- 
ment or  assent  of  the  defendants,  as  early  as  they  would  be  required 
to  give  it  if  they  had  themselves  done  it  instead  of  intrusting  it  to 
Plummer  &  Co.;  and  that,  after  the  receipt  of  it,  it  was  the  duty 
of  the  plaintiffs  to  give  new  instructions  if  they  desired  the  draft 
presented  for  payment  a  second  time. 

There  would  be  force  in  these  considerations  if  the  letter  of  Plum- 
mer &  Co.  was  only  a  simple  notice  of  non-payment,  with  no  sugges- 
tion of  further  action  in  regard  to  it.  It  expresses  and  implies  much 
more.  The  reason  for  the  refusal  to  pay  is  stated,  and  the  plaintiffs 
are  told  that  the  defendants  will  hold  the  draft  until  they,  Plummer 
&  Co.,  hear  from  them.  Plainly,  if  the  defendants  avail  themselves 
of  the  letter  as  a  performance  of  their  obligation  to  give  notice,  they 
must  abide  by  the  whole  of  its  contents.  They  make  Plummer  & 
Co.  their  agents  in  writing  it,  and  authorize  the  plaintiffs  to  rely 
on  the  assurance  which  substantially  it  contains,  that  upon  the 
receipt  by  Plummer  &  Co.  of  their  explanation  the  draft  would  be 
paid  or  returned,  or  notice  of  its  non-payment  given.  There  is  no 
suggestion  in  it  that  the  defendants  were  awaiting  further  instruc- 
tions from  the  plaintiffs,  or  needed  or  expected  them.  It  clearly 
implies  that  the  defendants  had  only  suspended,  at  the  suggestion  of 
Plummer  &  Co.,  and  for  their  accommodation,  the  further  perform- 
ance of  the  duty  they  had  undertaken,  until  an  answer  and  explana- 
tion could  be  returned  to  Plummer  &  Co.  The  plaintiffs  had  no  new 
instructions  to  give,  nor  had  the  defendants  any  right  to  expect 
them.  They  trusted  to  others,  instead  of  corresponding  themselves 
with  the  plaintiffs,  who  in  this  matter  are  in  no  respect  chargeable 
with  neglect.  The  loss  is  wholly  due  to  the  neglect  of  the  defendants, 
and  must  be  borne  by  them.  According  to  the  agreement  of  the 
parties,  the  entry  must  be 

Judgment  for  the  plaintiffs. 


IT 


268  EVANS   V.   BOOT.  [CHAP.   VIII. 

EVANS   V.   ROOT. 

7  N.  Y.  186.     1852. 

Action  for  damages  against  an  agent  for  disobeying  instructions. 
The  trial  judge  ordered  a  non-suit. 

In  1847  the  plaintiff  shipped  from  Loekport  to  the  defendant,  who 
•was  a  commission  merchant  in  Albany,  two  cargoes  of  flour,  contain- 
ing together  six  hundred  and  eight  barrels,  to  be  sold  on  arrival. 
The  first  cargo  consisting  of  three  hundred  and  eight  barrels  arrived 
at  Albany  on  the  twenty-first  day  of  June.  At  this  time  the  price 
of  flour  was  $7.37  per  barrel.  The  defendant  commenced  selling  it 
on  the  twenty-ninth  of  June,  when  the  price  had  fallen  to  $7.25, 
and  continued  to  sell  it  during  the  month  of  July,  the  price  constantly 
diminishing.  The  second  cargo,  consisting  of  three  hundred  and 
eight  barrels,  arrived  on  the  ninth  day  of  July,  when  the  price  was 
$6  per  barrel.  It  was  sold  on  the  twenty-fourth  and  twenty-fifth 
days  of  July  at  $5.40  and  $5.44. 

Evidence  was  also  given  that  flour  can  be  sold  in  Albany  at  any 
time  by  selling  under  the  market,  and  that  during  June  and  July, 
1847,  the  sales  of  flour  in  that  city  would  average  from  five  hundred 
to  three  thousand  barrels  per  day:  that  the  defendant  had  flour  of 
other  persons  than  the  plaintiff  on  hand  and  for  sale  at  the  time, 
and  that  his  sales  ranged  from  ten  to  three  hundred  barrels  per  day, 
and  that  the  plaintiff's  flour  was  not  offered  for  sale  below  the  market 
price. 

Gridley,  J.  The  plaintiff  brought  this  action  against  the  de- 
fendant in  the  supreme  court  to  recover  damages  for  a  disobedience 
of  instructions  concerning  the  sale  of  two  boat  loads  of  flour  shipped 
to  the  defendant  in  the  months  of  June  and  July,  1847.  The  in- 
structions were  "  to  sell  on  arrival,"  and  it  was  for  the  loss  occa- 
sioned by  a  failure  to  comply  with  this  direction  that  the  appellant 
brought  this  action.  There  is  no  doubt  that  these  instructions  were 
received  and  understood  by  the  defendant.  In  answer  to  a  letter  of 
the  plaintiff  dated  August  20,  1847,  alleging  that  he  had  desired  the 
defendant  "  to  sell  the  flour  on  arrival,"  and  complaining  that  the 
instructions  had  not  been  followed,  the  defendant  writes  under  date 
of  the  25th  of  August  as  follows :  "  Sir,  yours  of  the  20th  is  at  hand» 
I  represented  your  interest  in  the  sale  of  six  hundred  and  eight  barrels 
of  flour  as  well  as  I  knew  how.  It  would  not  sell  on  arrival.  There 
was  a  panic  in  the  market  and  only  little  lots  for  home  consumption 
would  sell  at  all.  I  am  prepared  to  prove  this  fact  to  your  satisfac- 
tion'. It  is  my  plan  to  obey  orders  if  I  hreaTc  owners  generally."  If 
the  defendant  could  not  in  fact  sell  the  flour  on  its  arrival,  then  he 
was  not  responsible  for  a  disobedience  of  instructions;  but  we  think 


CHAP.   VIII.]  OBEDIENCE.  '  259 

the  evidence  shows,  and  especially  that  of  the  witness  Barrett,  that 
flour  could  be  sold  at  any  time  in  Albany  at  a  reasonable  deduction 
from  the  market  price.  There  were  sold  daily  through  the  season 
from  five  hundred  to  three  thousand  barrels  at  the  usual  market 
price  in  Albany.  If  the  flour  could  have  been  sold  even  below  the 
market  price  on  its  arrival,  then  all  the  authorities  concur  to  show 
that  it  was  the  duty  of  the  defendant  to  have  sold  it.  It  is  laid 
down  in  Paley  on  Agency  (ed.  of  1822),  p.  4,  that  the  primary  obli- 
gation of  an  agent  whose  authority  is  limited  by  instructions  is  to 
adhere  faithfully  to  those  instructions,  for  if  he  unnecessarily  exceed 
his  commission  or  risk  his  principal's  effects  without  authority,  he 
renders  himself  responsible  for  the  consequences  of  his  act.  In 
Eundle  v.  Moore,  3  Johns.  Cas.  36,  it  is  said  that  "  if  the  defend- 
ants have  as  the  agents  or  factors  of  the  plaintiffs,  through  mistake 
or  design,  disobeyed  their  instructions,  they  are  undoubtedly  respon- 
sible." So  in  Parkist  v.  Alexander,  1  John  Ch.  394,  it  is  laid  down 
that  "  if  an  agent  departs  from  the  instructions  of  his-  principal  he 
does  it  at  his  peril."  In  Coursier  v.  Ritter,  4  Wash.  C.  C.  R.  549, 
it  was  held  that  it  was  the  duty  of  an  agent  who  was  instructed  to 
make  sale  of  the  article  consigned  for  sale,  "  immediately  on  arrival, 
to  sell  immediately  on  arrival,  no  matter  at  what  loss."  See  also  to 
the  same  effect  Bell  v.  Palmer,  6  Cowen,  128,  where  an  agent  under 
similar  instructions  was  held  liable  for  refusing  the  first  offer,  al- 
though under  the  market  price.  And  this  is  a  reasonable  doctrine; 
for  if  a  loss  occur  by  reason  of  an  implicit  obedience  to  the  instruc- 
tions of  the  owner  such  loss  falls  on  him.  Considering  the  lateness 
of  the  season  and  the  probability  of  a  rapid  decline  in  prices  we  can 
well  see  why  the  plaintiff  would  desire  an  immediate  sale  of  the 
flour  and  be  willing  to  take  the  consequences  of  such  deduction  from 
the  market  price  as  might  be  necessary  to  effect  a  sale  rather  than 
incur  the  danger  of  delay. 

The  supreme  court  in  refusing  a  new  trial  placed  their  decision 
upon  the  uncertain  nature  of  the  instructions.  But  it  seems  to  us 
that  a  direction  "  to  sell  on  arrival "  is  an  explicit  instruction,  and 
the  defendant  seems  to  have  so  understood  it  in  his  letter  of  the  25th 
of  August.  It  is  substantially  like  the  instruction  in  the  cases  in  the 
sixth  volume  of  Cowen,  and  in  Washington's  circuit  court  reports. 
But  if  there  were  any  doubt  on  this  question  and  the  direction  was 
open  to  two  interpretations,  it  should  have  been  submitted  to  the 
jury  under  proper  instructions  to  say  in  what  sense  it  was  under- 
stood by  the  defendant.^  For  these  reasons  we  are  of  the  opinion 
that  a  new  trial  should  be  granted. 

All  the  judges  except  Watson,  who  dissented,  concurring. 

Judgment  reversed  and  a  new  trial  ordered. 

*  An  agent  who,  In  good  faith  and  without  negUgence,  acts  upon  his  own  under- 
standing of  faulty  or  ambiguous  instructions,  is  not  liable  to  bis  principal  In  dam- 


260  *  FORRESTIER  V.   BORDMAN.  [CHAP.   7III. 

FoRRESTiER  V.  BoRDMAN,  1  Story  (U.  S.  C.  Ct.)  43.  1839. 
Story,  J.,  in  summing  up  to  the  jury,  said :  The  first  point  made  at 
the  bar  is,  that  Williams,  the  supercargo,  had  no  authority  to  carry 
the  flour  to  Batavia  and  to  sell  it  there,  under  the  terms  of  his  in- 
structions. The  voyage  contemplated  was  to  several  ports  of  South 
America,  where  it  was  supposed  that  the  flour  might  and  would  be 
sold,  and  from  hence  the  vessel  was  to  proceed  to  India,  for  a  return 
cargo.  Certainly  the  instructions,  in  their  terms,  did  not  contem- 
plate any  other  event  than  a  sale  of  all  the  flour  at  some  one  or  more 
of  the  South  American  ports.  It  turned  out,  however,  that  the  flour 
could  not  all  be  sold  at  the  South  American  ports,  or  at  least  not 
sold,  unless  at  an  enormous  sacrifice.  The  parties  had  not  looked 
for  any  such  event.  What  then  was  it  the  duty  of  the  supercargo  to 
do,  in  such  a  case  of  unexpected  occurrence,  not  within  the  contem- 
plation of  the  instructions?  Was  he  to  sacrifice  the  flour,  or  throw 
it  overboard?  No  one  pretends  that  it  was  intended  to  be  brought 
back  again  to  the  United  States  under  any  circumstances.  It  would 
probably  have  been  spoiled  and  ruined  on  the  return  voyage,  and 
come  home  utterly  worthless.  Now,  I  take  it  to  be  clear  that  if,  by 
some  sudden  emergency,  or  supervening  necessity,  or  other  unexpected 
event,  it  becomes  impossible  for  the  supercargo  to  comply  with  the 
exact  terms  of  his  instructions,  or  a  literal  compliance  therewith 
would  frustrate  the  objects  of  the  owner,  and  amount  to  a  total  sacri- 
fice of  his  interests,  it  becomes  the  duty  of  the  supercargo,  under 
such  circumstances,  to  do  the  best  he  can,  in  the  exercise  of  a  sound 
discretion,  to  prevent  a  total  loss  to  his  owner;  and  if  he  acts  bona 
fide,  and  exercises  a  reasonable  discretion,  his  acts  wiU  bind  the 
owner.  He  becomes,  in  such  a  case,  an  agent  from  necessity  for  the 
owner.  Suppose,  for  example,  that  a  cargo  of  a  perishable  nature  is 
shipped  on  a  voyage,  and  is  to  be  carried  to  a  particular  port  of  des- 
tination, and  there  sold,  and  the  ship  should  in  the  course  of  the 
voyage  meet  with  a  storm,  which  should  disable  her,  and  she  should 
go  into  a  port  of  necessity  to  refit;  and  that  the  cargo  should  be 
found  so  much  damaged  that  the  whole  must  perish  before  her 
arrival  at  the  port  of  destination;  would  not  the  supercargo  have 
a  right  to  sell  it  there,  in  order  to  prevent  a  total  loss,  although  no 
such  case  was  contemplated  in  his  orders?  Certainly  he  would  have 
a  right  to  sell;  and  indeed  it  would  become  his  duty,  under  such 
circumstances,  to  sell.  In  truth,  in  all  voyages  of  this  sort  there  is 
an  implied  authority  to  act  for  the  interest  and  benefit  of  the  owner 
in  all  cases  of  unforeseen  necessity  and  emergency,  created  by  opera- 
tion and  intendment  of  law.  I  shall  put  it  to  the  jury  to  say,  there- 
ages,  although  his  Interpretation  of  them  may  be  erroneous.  Falksen  v.  Palls  City 
State  Bank  (Neb.),  98  N.  W.  Rep.  425. 

If  the  agent  Is  directed  to  ship  goods  by  the  X  line  and  he  ships  by  the  T  line, 
the  goods  are  at  the  agent's  risk  owing  to  his  disobedience.  Johnson  v.  N.  Y.  C.  B., 
33  N.  Y.  610;   Wilts  v.  Morrell,  66  Barb.  (N.  Y.)  511. 


CHAP.   VIII.]  PBUDENCE.  261 

fore,  whether  the  carrying  the  flour  to  Batavia,  and  selling  it  there, 
was  not  an  act  of  necessity  to  prevent  a  total  loss  to  the  owner.  If 
it  was,  then  the  supercargo  was  justified  in  directing  the  sale.*  .  .  . 


2.    Prudence. 


HEINEMANN  v.   HEAED. 

60  N.  Y.  27.     1872. 

Action  for  damages  for  breach  of  duty.  Non-suit,  and  judgment 
for  defendants.    Plaintiffs  appeal. 

Defendants  were  plaintiffs'  agents,  residing  in  China.  Plaintiffs 
sent  to  defendants  £15,000  for  the  purchase  of  teas  and  silks,  with 
instructions  as  to  amounts  and  prices.  Defendants  neglected  to  pur- 
chase as  instructed.  It  appeared  that  the  defendants  could  not  have 
procured  the  tea  at  the  price  fixed,  but  they  could  have  procured  the 
silk.  They  waited,  however,  in  the  expectation  that  they  could  pro- 
cure it  at  a  lower  price,  but  it  suddenly  advanced  beyond  the  price 
fixed  by  plaintiffs. 

Eapallo,  J.  (after  deciding  that  no  recovery  could  be  had  for  the 
failure  to  purchase  the  tea,  and  after  discussing  the  evidence  as  to 
the  possibility  of  purchasing  the  silk).  The  question  in  the  case 
was  one  of  due  diligence,  and  we  think  that  there  was  sufficient  evi- 
dence to  go  to  the  jury  on  that  point.  The  position  cannot  be  main- 
tained that  fraud  on  the  part  of  the  agent  is  necessary  to  subject  him 
to  an  action  for  neglecting  to  perform  a  duty  which  he  has  under- 
taken. An  agent  is  bound  not  only  to  good  faith  but  to  reasonable 
diligence,  and  to  such  skill  as  is  ordinarily  possessed  by  persons  of 
cormnon  capacity  engaged  in  the  same  business.  Story  on  Agency, 
§§  183, 186.  Whether  or  not  he  has  exercised  such  skill  and  diligence 
is  usually  a  question  of  fact;  but  its  omission  is  equally  a  breach  of 
his  obligation  and  injurious  to  his  principal,  whether  it  be  the  result 
of  inattention  or  incapacity,  or  of  an  intent  to  defraud.  In  the  case 
of  Entwisle  v.  Dent  ( 1  Exch.  822 )  there  was  an  element  of  fraud  as 
well  as  breach  of  duty;  but  the  judgment  of  the  court  was  not 
founded  upon  the  fraud,  nor  could  it  be,  as  the  action  was  for 
breach  of  the  implied  contract  of  the  defendant  to  act  according  to 
instructions. 

As  an  independent  ground  for  sustaining  the  non-suit,  it  is 
claimed,  on  the  part  of  the  defendants,  that  the  order  to  purchase 

*  Accord  :  Dusar  v.  Perlt,  4  Blnney  (Pa.)  361 ;  Judson  v.  Storges,  5  Day  (Conn.) 
556;  Greenleaf  v.  Moody,  13  Allen  (Mass.)  363;  Bartlett  v.  Sparkman,  95  Mo.  136 
(agent  sent  for  one  physician  who  is  out  calls  another).  See  cases  on  Agency  by 
Necessity,  ante,  pp.  147-165, 


262  HEINEMANN   V.   HEARD.  [CHAP.   VIII. 

silk  was  discretionary,  and  that  for  that  reason  they  are  not  respon- 
sible in  damages  for  their  failure  to  execute  it. 

By  reference  to  the  letter  of  December  23,  1864,  it  will  be  seen 
that  no  discretion  was  given  whether  or  not  to  purchase.  The  order 
to  invest  £5,000  in  silk  of  one  or  other  of  the  particular  descriptions 
mentioned,  and  at  the  prices  named,  was  absolute.  The  only  matter 
left  to  the  discretion  of  the  defendants  was  the  selection  of  the  silks 
as  well  as  the  teas.  They  were  instructed  to  purchase  either  Cura- 
chuck  at  18s.,  or  No.  1  Loo  Kong,  or  Kow  Kong,  at  16s.,  and  were 
requested  to  obtain  all  white  if  possible;  otherwise,  to  separate  the 
white  from  the  yellow.  No  other  matters  were  left  to  their  discre- 
tion. It  was  their  duty  to  select  some  of  these  descriptions,  if  they 
wer^to  be  obtained,  and  to  use  reasonable  diligence  in  obtaining  the 
required  quantity  in  time  to  ship  under  the  letter  of  credit.  It  is 
argued  that  as  they  had  discretion  in  the  selection  of  the  silks,  and 
had  to  determine  whether  it  was  possible  to  obtain  all  white,  no 
period  can  be  fixed  as  the  time  when  they  were  bound  to  decide 
these  matters  and  make  the  purchase.  This  argument  is  not  satis- 
factory. The  necessity  of  making  a  selection  may  have  justified 
them  in  not  accepting  the  first  offer  which  they  may  have  met  with, 
and  in  looking  further  for  the  purpose  of  complying  with  the  wishes 
of  their  correspondents;  but  it  would  not  justify  them  in  allowing 
all  opportunities  to  pass,  and  the  time  to  elapse  within  which  they 
could  purchase  under  the  letter  of  credit.  They  were  bound  to  make 
a  selection  within  a  reasonable  time,  and,  at  all  events,  before  the 
time  for  shipping,  under  the  credit,  expired.  The  prices  appear  to 
have  continued  below  their  limit  from  the  early  part  of  Jime  until 
the  first  term  of  the  letter  of  credit  had  run  out;  yet  they  allowed 
all  that  time  to  elapse  without  making  any  selection.  Such  delay 
was  certainly  evidence  of  want  of  due  skill  and  diligence,  if  attribut- 
able merely  to  a  failure  to  come  to  a  decision.         , 

But  the  defendants  do  not,  in  their  correspondence,  take  any  such 
ground,  or  claim  that  they  regarded  themselves  as  having  any  dis- 
cretion as  to  purchasing  the  silks  aild  tea.  On  the  contrary,  in  their 
letter  of  February  27,  1866,  they  say :  "  We  were  bound  to  follow  your 
instructions  for  the  investment  of  £15,000  credit  first  sent,  and  have 
already  explained  to  you  our  reasons  for  not  having  purchased  silk ; " 
referring  to  their  letter  of  December  14,  1865.  They  rest  their 
justification  wholly  upon  the  ground  that  while  the  silks  were  below 
the  plaintiffs'  limits  they  held  off  in  the  attempt  to  obtain  them  at 
still  lower  prices.  They  were  scarcely  justified,  however,  in  persist- 
ing in  this  attempt  until  it  became  too  late  to  ship  under  the  letter 
of  credit  as  originally  drawn  or  as  extended. 

(The  court  then  discusses  the  question  of  damages  and  concludes)  : 
It  is  enough,  at  the  present  stage  of  the  case,  to  say  that  the  evidence 
on  the  subject  of  damages  was  received  without  objection,  and  that 


CHAP.   VIII.]  ^EUDENCE.  263 

the  non-suit  was  not  moved  for,  or  granted  on  the  ground  of  any 
defect  of  proof  in  this  respect,  but  on  the  sole  ground  that  the  plain- 
tiffs had  not  given  any  evidence  of  their  alleged  cause  of  action  suffi- 
cient to  go  to  the  jury.  "We  think  they  have  shown  enough  in  respect 
to  the  silk  to  put  the  defendants  to  their  defence,  and  that  the  judg- 
ment should  therefore  be  reversed  and  a  new  trial  granted,  with  costs 
to  abide  the  event. 
All  concur.  Judgment  reversed^ 


THOMAS   V.   FUNKHOUSER. 

91  Ga.  478.     1893. 

Action  against  an  agent  for  negligence  in  not  keeping  the  plain- 
tiff's house  insured.  A  policy  for  $1,000  lapsed,  and  a  new  one  was 
written  up  by  the  Rome  (Ga.)  Fire  Insurance  Company  on  Sep- 
tember 5,  1890,  but  as  defendant  failed  to  call  for  it  and  pay  the 
premium  the  company  cancelled  it.  On  May  6,  1891,  the  house 
burned.  It  was  worth  $1,800  and  was  insurable  for  $1,000.  Verdict 
for  defendant,  under  a  charge  which  threw  upon  plaintiff  the  burden 
of  showing  that  the  Rome  Fire  Insurance  Company  was  not  liable 
to  her. 

Bleckley,  Chief  Justice.  Whether  tested  by  the  general  law 
irrespective  of  the  particular  custom  which  seems  to  have  prevailed 
at  Rome  in  the  transaction  of  insurance  business,  or  by  that  custom 
itself,  there  was  a  prima  facie  liability  on  the  defendant  to  answer 
for  the  damages  in  the  present  case.  He  was  the  plaintiff's  agent  to 
keep  the  premises  insured.  She  had  reason  to  rely  upon  him  and  to 
believe  that  he  had  done  so.  Under  the  code,  §  2794,  there  could 
be  no  valid  contract  of  insurance  without  writing.  The  duty  of 
keeping  the  property  insured  would  therefore  embrace  the  duty  of 
seeing  that  some  contract  of  insurance  in  writing  was  kept  on  foot. 
No  such  contract  covering  the  period  at  which  this  loss  occurred  was 
ever  consummated,  though  a  policy  was  written  up  and  might  pos- 
sibly have  been  delivered  if  the  local  custom  in  respect  to  collecting 
the  premium  had  been  complied  with.  But  that  was  not  complied 
with,  and  hence  the  writing  up  of  the  policy  counted  for  nothing. 
It  is  said  that  it  was  the  company's  fault  that  the  premium  was  not 
paid,  because  the  custom  was  for  the  companies  to  send  out  bills  for 
premiums,  and  in  this  instance  no  bill  was  sent.     But  it  is  not 

'  Accord :  Whitney  v.  Martlne,  88  N.  Y.  535  (agent  to  Invest  made  loan  on  sec- 
ond mortgage  security)  ;  Samonset  v.  Mesnager,  108  Cal.  354  (improvident  loan)  ; 
Sawyer  v.  Mayhew,  51  Me.  398  (unenforcible  insurance  policy)  ;  Klnnard  v.  Will- 
more,  2  Heisk.  (Tenn.)  619  (failure  to  obtain  a  Judgment  and  execution  upon  a  debt 
sent  agent  for  collection)  ;  Robinson  Machine  Worlis  v.  Vorse,  52  Iowa,  207  (negli- 
gently taking  notes  from  insolvent  upon  sale  of  principal's  property). 


264  GEISINGEE  V.   BEYL.  •  [CHAP.   VIII. 

sufficient  for  an  agent  employed  to  keep  up  insurance  to  put  the 
company  in  fault.  The  owner  of  the  property  does  not  want  any 
company  to  be  put  in  fault,  because  that  would  most  probably  involve 
a  lawsuit.  What  the  owner  wants  is  to  have  right  and  regular  in- 
surance kept  up,  so  as  to  avoid  trouble  and  litigation  in  case  loss 
should  occur.  It  would  be  unreasonable  to  allow  an  agent  to  turn 
over  a  lawsuit  to  his  principal,  even  though  a  recovery  might  ulti- 
mately be  had,  instead  of  a  proper  and  regular  contract  of  insurance, 
at  least  one  fully  consummated  with  the  insurance  company,  in- 
stead of  lacking  a  material  element  of  consujnmation  according  to 
general  law  and  the  local  usage. 

The  court  erred  in  not  granting  a  new  trial. 

Judgment  reversed. 


3.    Good  Faith. 
GEISINGEE   V.   BEYL. 

80  Wis.  443.     1891. 

Action  of  ejectment.    Judgment  for  plaintiff.    Defendant  appeals. 

Defendant  relied  for  title  upon  certain  tax  deeds  issued  to  himself 
and  to  one  Steinke  in  his  behalf  and  upon  a  quitclaim  deed  from 
Steinke.  The  jury  found  specially  that  the  defendant  was  the  agent 
of  plaintiff  for  the  sale  or  care  of  the  land  when  the  tax  deeds  were 
executed,  and  that  (except  as  to  these  tax  deeds)  plaintiff  was  the 
owner  of  the  land. 

Lyon,  J.  The  learned  counsel  for  defendant  earnestly  contended 
in  his  argument  that  there  is  no  testimony  to  support  the  finding  of 
the  jury  that  when  the  tax  deeds  were  executed  defendant  was  the 
agent  of  the  plaintiff  for  "  selling  or  caring  for  the  plaintiff's  interest 
in  the  land  in  question."  We  do  not  agree  with  counsel  in  this  view 
of  the  testimony. 

Plaintiff  resided  at  Rochester,  in  Minnesota,  and  the  defendant 
resided  in  Barron  County,  in  this  state,  near  the  land.  The  parties 
had  considerable  correspondence  in  1869,  1870,  and  1871,  concerning 
the  land.  Some  of  the  letters  which  passed  between  them  are  in 
evidence,  and  the  contents  of  others,  which  had  been  lost  or  destroyed, 
were  testified  to  on  the  trial.  This  testimony  will  not  be  repeated 
here.  It  is  sufficient  to  say  of  it  that,  if  true,  it  proves  that  the  de- 
fendant was,  at  the  times  mentioned,  the  agent  of  the  plaintiff,  not 
only  to  look  after  and  care  for  the  land,  but  to  sell  it.  In  either  case 
it  was  a  violation  of  his  duty  to  take  a  tax  deed  of  the  land  to  him- 
self or  another,  for  it  was  his  duty  to  protect  and  preserve  plaintiff's 
interest  therein.    Hence  the  tax  deeds  were  a  fraud  upon  the  plaintiff. 


CHAP.  VIII.]  GOOD  FAITH.  265 

and  vested  in  defendant  no  title  to  the  land.  At  most,  the  purchase 
of  the  tax  certificates  by  the  defendant  was  a  redemption  of  the  land 
from  the  tax  sales  thereof.  .  .  . 

We  conclude,  therefore,  that  the  finding  on  the  subject  of  defend- 
ant's agency  is  supported  by  the  testimony,  and  demonstrates  that  the 
defendant  took  no  title  to  the  land  under  any  of  the  tax  deeds.  .  .  . 

Judgment  affirmed. 

CONKEY   V.   BOND. 
36  N.  Y.  427.     1867. 

Action  to  rescind  a  sale  of  stock  made  by  defendant  to  plaintiff, 
and  to  recover  the  amount  paid  therefor,  and  certain  payments  made 
by  plaintiff  as  stockholder.  Judgment  for  defendant.  Reversed  at 
General  Term.  Defendant  appeals  from 'the  order  of  the  General 
Term. 

Defendant,  as  agent,  undertook  to  purchase  stock  for  plaintiff, 
and,  without  plaintiff's  knowledge,  transferred  ten  shares  of  his  own 
stock  to  plaintiff. 

Porter,  J.  The  fact  that  the  defendant  volunteered  his  agency 
did  not  absolve  him  from  the  duty  of  fidelity  in  the  relation  of  trust 
and  confidence  which  he  sought  and  assumed.  The  plaintiff  was  in- 
duced to  purchase  at  an  extravagant  premium,  stock  of  the  value  of 
which  he  was  ignorant,  on  the  mistaken  representations  of  the  de- 
fendant, who  professed  to  have  none  which  he  was  willing  to  sell. 
This  assurance  very  naturally  disarmed  the  vigilance  of  the  respond- 
ent, and  he  availed  himself  of  the  defendant's  offer  by  authorizing 
him  to  buy  at  the  price  he  named. 

The  defendant  did  not  buy,  but  sent  him  a  certificate  for  the 
amount  required,  concealing  the  fact  that  he  had  not  acted  under  the 
authority,  and  that  the  stock  transferred  was  his  own. 

There  is  no  view  of  the  facts  in  which  the  transaction  can  be 
upheld.  He  stood  in  a  relation  to  his  principal  which  disabled  him 
from  concluding  a  contract  with  himself,  without  the  knowledge  or 
assent  of  the  party  he  assumed  to  represent.  He  undertook  to  act  at 
once  as  seller  and  as  purchaser.  He  bought  as  agent,  and  sold  as 
owner.  The  ex  parte  bargain,  thus  concluded,  proved  advantageous 
to  him  and  very  unfortunate  for  his  principal.  It  was  the  right  of 
the  latter  to  rescind  it,  on  discovery  of  the  breach  of  confidence.  It 
is  not  material  to  inquire  whether  the  defendant  had  any  actual 
fraudulent  purpose.  The  making  of  a  purchase  from  himself,  with- 
out authority  from  the  plaintiff,  was  a  constructive  fraud,  in  view 
of  the  fiduciary  relation  which  existed  between  the  parties.  In  such 
a  case,  the  law  delivers  the  agent  from  temptation  by  a  presumptio 
juris  et  de  jure,  which  good  intentions  are  unavailing  to  repel.    It  ia 


ii66  BUNKER   V.   MILES.  [CHAP.   VIII. 

unnecessary  to  state  our  views  more  fully  on  this  question,  as  it  is 
fully  and  ably  discussed  in  the  opinion  delivered  by  Judge  Bacon  in 
the  court  below,  and  his  conclusions  are  abundantly  fortified  by 
authority.  34  Barb.  276;  Gillett  v.  Peppercome,  3  Beavan,  78; 
Story  on  Agency,  §  214;  Michoud  v.  Girod,  4  How.  (U.  S.)  503; 
Davoue  v.  Fanning,  2  Johns.  Ch.  252,  270;  Moore  v.  Moore,  1  Seld. 
256;  N.  Y.  Central  Ins.  Co.  v.  Protection  Ins.  Co.,  14  N.  Y.  85; 
Gardner  v.  Ogden,  22  Id.  327. 

The  objection,  that  this  theory  is  inconsistent  with  that  stated  in 
the  complaint,  is  not  sustained  by  the  record.  The  essential  facts  are 
alleged,  and  the  appropriate  relief  is  demanded.  The  fact  that  the 
complaint  alleged  other  matters  which  the  plaintiff  failed  to  establish, 
impairs  neither  his  right  nor  his  remedy.  Utile  per  inutile  non 
vitiatur. 

The  order  of  the  Supreme  Court  should  be  aflSrmed,  with  judg- 
ment absolute  for  the  respondent. 

All  the  judges  concurring.  Judgment  accordingly?- 


BUNKEE   V.   MILES. 

30  Me.  431.     1849. 

Assumpsit  for  money  had  and  received.    Judgment  for  plaintiff. 

Defendant  bought  a  horse  of  one  Seaver  for  $65,  and  agreed  that 
if  the  horse  sold  for  more  than  $65,  he  would  divide  the  profit  with 
Seaver.  Defendant  then  had  $80  of  plaintiff's  money  with  which  to 
buy  that  horse,  and  was  to  buy  it  as  cheaply  as  possible  and  receive 
one  dollar  for  his  services.  Defendant  told  Seaver  he  had  sold  the 
horse  for  $80,  and  gave  Seaver  $7.50,  keeping  $7.50  for  himself. 
Judgment  for  $6.50  and  interest. 

Tenney,  J.  The  case  was  put  to  the  jury  upon  evidence  intro- 
duced by  the  plaintiff  alone.  It  appeared  that  he  placed  in  the  hands 
of  the  defendant  the  sum  of  $80,  and  requested  him  to  obtain  a  cer- 
tain horse.  The  defendant  was  restricted,  in  the  price  to  be  paid, 
to  that  sum,  and  was  to  procure  the  horse  at  a  less  price,  if  he  should 
be  able  to  do  so,  it  being  agreed  that  the  defendant  should  receive  the 
sum  of  $1  for  his  services  in  purchasing  the  horse.  He  obtained  the 
horse  and  delivered  him  to  the  plaintiff,  who  received  him  and  dis- 
posed of  him  the  same  day.  The  defendant  represented  to  the  plain- 
tiff, that  he  had  saved  nothing  for  himself.     It  appears  by  other 

^  A  sale  to  the  agent's  wife  may  stand  on  the  same  basis  as  a  sale  to  himself. 
Tyler  v.  Sanborn,  128  111.  136 ;  Winter  v.  McMillan,  87  Cal.  256 ;  McNltt  v.  Dlx,  83 
Mich.  328 ;  Green  v.  Hugo,  81  Tex.  452.  So  also  a  transfer  by  the  agent  to  X  and  a 
transfer  from  X  to  the  agent.  McKay  v.  Williams,  67  Mich.  547.  An  insurance 
policy  issued  by  an  agent  to  himself  as  receiver  of  another's  goods  was  held  void  on 
the  ground  of  adverse  interest  In  Wildberger  v.  Hartford  Ins.  Co.,  72  Miss.  338. 


CHAP.    VIII.]  GOOD   FAITH.  267 

testimony  that  the  price  paid  for  the  horse  by  the  defendant  did 
not  exceed  the  sum  of  $72.50. 

If  the  detfendant  made  a  valid  contract  with  the  plaintiff,  to  do 
the  service  requested  as  an  agent,  and  did  do  it  as  was  agreed,  he  was 
not  at  liberty  to  make  a  profit  to  himself  in  the  transaction,  in  which 
he  was  acting  as  the  agent ;  and  whatever  sum  remained  in  his  hands, 
after  paying  the  price  of  the  horse,  deducting  the  compensation  to 
be  made  to  him,  was  the  money  of  the  plaintiff,  for  which  the  equi- 
table action  of  money  had  and  received  could  be  maintained.  The 
instructions  to  the  jury  were  consistent  with  these  principles,  and 
a  verdict  was  rendered  for  the  plaintiff. 

Exceptions  overruled.^ 

HOLMES   V.    CATHCAET. 
88  Minn.  213.     1903. 

Action  to  recover  damages  from  Cathcart,  as  plaintiff's  agent, 
and  from  the  Pioneer  Apartment  House  Company  for  alleged  fraud 
committed  by  Cathcart  in  collusion  with  said  company.  The  trial 
judge  directed  a  verdict  in  favor  of  both  defendants. 

Plaintiff,  who  resided  at  Buffalo,  N.  Y.,  authorized  h6r  agent 
(Cathcart)  in  St.  Paul  to  exchange  twelve  houses  owned  by  her 
there  for  other  property. 

Cathcart  first  procured  from  one  Horeish  a  proposition  to  ex- 
change a  brick  block  in  St.  Paul,  mortgaged  for  $15,000,  for  the 
twelve  houses,  plaintiff  also  to  pay  about  $1,600  overdue  interest 
and  taxes.  Later  Cathcart  procured  from  Horeish  an  agreement 
to  exchange  the  brick  block,  subject  to  the  mortgage  and  the  pay- 
ment of  back  taxes  and  interest,  for  two  of  plaintiff's  houses  and 
$200  in  cash;  but  this  second  offer  was  never  communicated  to 
plaintiff. 

Cathcart  then  entered  into  some  sort  of  an  arrangement  with  the 
Pioneer  Apartment  House  Company,  by  which  that  company  agreed 
to  advance  all  money  necessary  to  pay  the  back  taxes  and  interest 
over  and  above  the  sum  of  $1,000,  in  consideration  of  which  it  was 
to  receive  ten  of  the  houses. 

Cathcart  then  informed  plaintiff  that  he  could  effect  an  exchange  of 
her  twelve  houses  for  the  Horeish  block,  subject  to  the  incumbrance, 
interest,  and  taxes  (plaintiff  to  pay  $1,000,  instead  of  $1,600,  accord- 
ing to  the  previous  proposition)  ;  and  he  subsequently  informed  her 
that  the  balance  of  the  $1,600  necessary  to  pay  the  back  taxes  and 

*  If  a  sub-agent  Is,  with  consent  of  the  principal,  employed  In  the  agency  he  must 
account  to  the  principal  for  any  secret  profits  actually  received.  Powell  v.  Evena, 
[1905]  1  K.  B.  11.  But  neither  an  agent  nor  a  sub-agent  is  a  trustee  of  the  agree- 
ment for  secret  profits,  and  the  principal  cannot  have  a  declaration  that  the  unpaid 
portion  shall  be  paid  to  him.    IMd.;  Lister  v.  Stubbs,  45  Cb.  D.  1. 


268  HOLMES   V.    CATHCART.  [CHAP.   VIII. 

interest  in  full  would  be  advanced  by  a  third  party,  who  was  to 
receive  some  of  the  houses. 

,  She  was  not  informed  that  Horeish  was  willing  to  exchange  the 
brick  block  for  two  of  her  houses  and  the  sum  of  $200,  subject  to 
the  mortgage  and  the  taxes  and  interest.  She  understood  all  along 
that  all  of  her  houses  were  to  be  transferred  and  exchanged  for  that 
property,  and  she  was  not  informed  at  any  time  that  the  apartment 
house  company  was  to  receive  ten  of  her  houses  for  the  amount 
of  money  it  was  to  advance. 

She  finally  accepted  this  proposition,  deeded  the  houses  to  the 
Pioneer  Apartment  House  Company,  and  paid  the  $1,000  toward 
the  back  taxes  and  interest.  The  balance  necessary  to  pay  the  same 
in  full  was  paid  by  the  apartment  house  company.  The  precise 
amount  paid  by  it  is  not  shown  by  the  record,  but  it  was  probably 
in  the  neighborhood  of  $1,200  or  $1,400,  including  a  commission  to 
Cathcart  of  the  sum  of  $500. 

A  verdict  was  directed  for  defendants  at  the  trial  in  the  court 
below  when  plaintiff  rested.  Defendants  were  not  required  to  offer 
any  evidence,  and  the  facts  in  defence  of  the  action,  or  upon  which 
they  would  rely  if  required  to  defend,  do  not  appear.  This  action 
was  brought  against  both  defendants,  —  Cathcart,  the  agent,  and  the 
apartment  house  company,  —  on  the  theory  that  those  parties  were 
in  collusion,  and  that  plaintiff  was  entitled  to  recover  against  both 
for  any  damage  she  had  suffered  for  the  failure  of  her  agent  to 
disclose  to  her  all  the  material  facts  in  reference  to  the  exchange 
of  the  properties. 

Brown,  J.  (after  stating  the  facts).  The  evidence  is  insuflScient, 
perhaps,  to  show  a  collusive  agreement  between  the  defendants, 
though  it  is  somewhat  strange,  or  at  least  not  wholly  clear,  that  the 
apartment  house  company  should  receive  ten  of  plaintiff's  houses  for 
the  nominal  consideration  of  about  $1,200,  when  they  were  worth 
at  least  the  sum  of  $4,000.  But  at  the  trial  below  defendants  joined 
in  a  motion  to  direct  a  verdict,  which  motion  was  granted;  and,  if 
the  court  erred  in  granting  the  motion  as  to  either,  a  reversal  must 
apply  to  both,  and  the  case  will  be  left  as  though  no  trial  had  ever 
been  had,  and  must  be  tried  again  as  to  both  defendants. 

The  theory  on  which  the  learned  court  below  directed  a  verdict 
was  that  the  plaintiff  had  not  been  injured  by  any  act  on  the  part  of 
defendants,  and  she  could  not  recover;  that,  as  she  was  willing  to 
part  with  all  her  houses  in  exchange  for  the  brick  block,  it  was 
immaterial  to  whom  they  were  in  fact  deeded,  —  whether  to  Horeish 
or  to  the  apartment  house  company;  that  she  lost  nothing  by  the 
transaction,  and  has  no  cause  of  action.  We  think  the  court  was  in 
error.  It  is  not  controlling  whether  plaintiff  was  willing,  or  not,  to 
made  the  exchange  on  the  terms  proposed  to  her.  The  action  involves 
the  duty  of  an  agent  when  acting  for  his  principal,  and  whether  he 


CHAP.   VIII.]  GOOD  FAITH.  269 

performed  that  duty  in  accordance  with  the  law.  The  principal 
may  authorize  his  agent  to  sell  or  exchange  his  property,  but  it  does 
not  necessarily  follow  that  the  agent,  by  carrying  out  the  specific 
instructions  given  him,  fully  performs  his  duty,  and  is  relieved  from 
liability.  He  is  bound  to  the  exercise  of  the  most  perfect  good  faith, 
and  to  keep  his  principal  informed  of  facts  coming  to  his  knowledge 
atfecting  his  rights  and  interests.  If,  after  receiving  instructions 
to  sell  property  on  certain  specified  terms,  the  agent  learns  that  other 
and  more  advantageous  terms  can  be  obtained,  it  is  his  plain  duty, 
and  he  is  under  every  legal  and  moral  obligation,  to  communicate 
the  facts  to  the  principal,  that  he  may  act  advisedly  in  the  premises. 
As  stated  by  Chief  Justice  Gilfillan  in  Hegenmyer  v.  Marks,  37 
Minn.  6,  33  N.  W.  785 :  ^  "  Upon  this  contract  of  agency,  we  are  of 
the  opinion  that  when  the  agent  learned  of  a  fact  affecting  the  value 
of  the  property,  and  of  which  fact  he  knew  the  principal  was  ignor- 
ant when  she  fixed  the  price,  and  if  the  agent  had  reason  to  believe 
that,  had  she  known  the  fact,  she  would  have  fixed  a  higher  price, 
then  good  faith  towards  his  principal  required  him,  and  it  was  his 
legal  duty,  to  disclose  the  fact  to  her  before  he  proceeded  to  sell,  so 
that  she  might,  if  so  disposed,  fix  the  selling  price  in  accordance  with 
the  actual  condition  of  things.  This  being  so,  his  selling  upon  the 
basis  of  the  price  first  fixed,  without  disclosing  to  her  the  fact  he  had 
learned,  was,  of  course,  a  fraud  upon  her."  That  case  is  in  accord 
with  the  unanimous  voice  of  the  authorities.  Mechem,  Ag.  §  538; 
1  Am.  &  Eng.  Enc.  Law  (2d  ed.) ,  1069 ;  Arrott  v.  Brown,  6  Whart.  9 ; 
Devall  V.  Burbridge,  4  Watts  &  S.  305 ;  Harvey  v.  Turner,  4  Rawle, 
223 ;  Tilleny  v.  Wolverton,  46  Minn.  256,  48  N.  W.  908. 

Plaintiff  was  not  informed  at  any  time  prior  to  the  ©losing  up  of 
the  transaction  that  she  could  obtain  the  brick  block  for  two  of  her 
houses  and  the  payment  of  about  $1,600  in  money,  and  the  question 
arises  whether  defendant  Cathcart  should  have  communicated  that 
fact  to  her.  If,  as  now  claimed  by  plaintiff,  that  bargain  was  a  better 
one  for  her,  —  more  beneficial  in  its  results,  —  it  was  the  clear  duty 
of  Cathcart  to  communicate  the  facts  to  her;  and  if,  by  his  failure 
to  do  so,  plaintiff  was  damaged,  she  is  entitled  to  recover  whatever 
loss  she  actually  suffered.  Whether  defendant  did  fail  in  his  duty 
in  this  respect  is,  of  course,  a  question  of  fact,  which  we  do  not 
attempt  to  pass  upon;  but  we  do  hold  that  the  evidence  offered  by 
plaintiff  on  the  trial  was  such  as  to  require  a  finding  on  the  question 
by  the  trial  court,  or  the  submission  of  the  same  to  a  jury.  The 
measure  of  her  relief  would  be  the  actual  damage  suffered  in  con- 
sequence of  defendant's  failure  of  duty.  The  case  must  therefore  be 
reversed. 

It  was  also  claimed  by  plaintiff  that  she  was  entitled  to  the  com- 
mission received  by  defendant  Cathcart,  her  agent,  and  that  the 

»  Pott,  p.  623. 


270  MACKENZIE  V.   JOHNSTON.  [CHAP.    VUT. 

court  erred  in  holding  otherwise.  It  appears,  without  dispute,  that 
Cathcart  did  receive  from  the  apartment  house  company  a  commis- 
sion of  $500  for  his  services  in  effecting  the  exchange  of  properties. 
We  do  not  concur  with  plaintiff's  counsel,  however,  that  plaintiff  is 
entitled  to  any  portion  of  it.  The  evidence  disclosed  by  the  record 
fairly  shows  that  plaintiff  contemplated  that  defendant  should  re- 
ceive some  sort  of  a  commission,  and  this  is  clearly  shown  by  the 
correspondence  between  the  parties.  As  a  condition  to  the  acceptance 
of  the  final  offer  to  exchange  the  properties,  she  distinctly  stated  that 
it  must  include  all  commissions  to  be  received  or  claimed  by  Cathcart. 
It  therefore  appears  from  the  record  that  Cathcart  was  entitled  to 
negotiate  for  and  accept  and  receive  a  commission  for  his  services 
in  the  premises,  and  this  with  the  knowledge  and  consent  of  plaintiff. 
And  having  done  so  with  her  express  consent,  he  is  entitled  to  retain 
the  same. 

Order  reversed  and  new  trial  granted. 


4.    Accounting. 
MACKENZIE   v.   JOHNSTON. 

4  Madd.  373.     1819. 

Bill  for  an^  account  against  agents  who  received  from  plaintiff 
certain  earthenware  to  be  sold  in  India.  Demurrer  on  the  ground 
that  plaintiff's  remedy  was  at  law. 

Sir  John  Leach,  V.  C.  The  defendants  here  were  agents  for  the 
sale  of  the  property  of  the  plaintiff,  and  wherever  such  a  relation 
exists,  a  bill  will  lie  for  an  account.  The  plaintiff  can  only  learn 
from  the  discovery  of  the  defendants  how  they  have  acted  lq  the 
execution  of  their  agency;  and  it  would  be  most  unreasonable  that 
he  should  pay  them  for  that  discovery,  if  it  turned  out  that  they  had 
abused  his  confidence;  yet  such  must  be  the  case  if  a  bill  for  relief 
will  not  lie. 

Demurrer  overruled.^ 

^  A  bill  In  equity  will  He  for  an  account  against  an  agent  based  upon  the  obliga- 
tion to  render  an  account.  Marvin  v.  Brooks,  94  N.  Y.  71 ;  Warren  v.  Holbrook,  95 
Mich.  185 ;  Weaver  v.  Fisher,  110  111.  146 ;  Rippe  v.  Stodglll,  61  Wis.  38 ;  Decell  v. 
Hazelhurst  &  Co.,  83  Miss.  346. 

An  action  at  law  may,  of  course,  be  had  at  the  election  of  the  principal.  In 
Britton  v.  Ferris,  171  N.  Y.  235  (an  action  at  law)  it  was  held  that  the  agents  could 
not  set  off  as  a  counterclaim  a  debt  against  the  principal  purchased  by  them  of  a 
third  person.  In  Dodge  v.  Hatchett,  118  Ga.  883,  it  was  held  that  when  a  principal 
has  shown  that  his  property  has  been  sold  by  the  agent  the  burden  is  shifted  to  the 
agent  to  show  that  he  has  accounted  or  why  he  is  not  liable.  See  also  Farmers'  Ware- 
bouse  Ass'n  V.  Montgomery,  92  Minn.  194. 


CHAP.   VIII.]  ACCOUNTING.  271 

DECELL  V.   HAZLEHURST   OIL,   etc.,   CO. 

83  Miss.  346.     1904. 

Bill  by  W.  A.  Decell  against  the  Hazlehurst  Oil  Mill  &  Fertilizer 
Company.  From  a  decree  overruling  a  demurrer  to  the  bill,  de- 
fendant appeals. 

Calhoon,  J.  The  bill  of  appellant  calls  on  Decell  to  account  a» 
its  agent  for  money,  etc.,  misappropriated  by  him  in  his  prosecution 
of  that  agency.  It  sets  up  that  it  had  two  businesses  —  one  as  an 
oil  mill,  on  which,  on  a  misconstruction  of  the  law,  it  had  not  paid 
the  privilege  tax;  and  the  other  as  a  fertilizer  company,  on  which  it 
had  paid  the  privilege  tax,  and  it  is  on  the  fertilizer  business  it 
charges  misappropriation  and  demands  accounting.  Decell  demurred 
on  the  ground  that  appellant  was  one  corporation  simply,  with  two 
branches  of  business,  and,  as  shown  by  the  bill,  had  but  one  set  of 
books,  and  the  nonpayment  of  the  privilege  tax  was  a  complete 
defence  to  the  claims  of  either  branch  of  the  business,  and  on  the 
ground  that  there  was  a  complete  remedy  at  law.  The  court  took 
jurisdiction,  and  decreed  that  Decell  should  account,  and  we  will  not 
disturb  the  decree  on  the  ground  of  want  of  jurisdiction.  Mr.  Decell 
is  compellable  to  account  with  appellant  on  both  branches  of  its 
business  for  what  he  did  as  agent.  The  law  making  void  the  contract 
of  those  in  reference  to  their  business  carried  on  in  disregard  of  the 
privilege  tax  act  does  not  shield  Mr.  Decell.  It  has  no  reference  to 
the  dealers  inter  sese  and  their  agents  in  the  conduct  of  their  business. 
It  does  not  authorize  or  condone  embezzlement,  nor  prevent  partners 
or  stockholders  from  requiring  honest  settlements  among  themselves 
or  from  their  agents.  One  engaged  or  employed  in  the  business  can- 
not set  up  the  statute  the  design  of  which  was  to  get  revenue  by 
making  contracts  void  in  dealing  with  the  outside  world,  not  in  the 
inside  management  of  the  business.  Howe  v.  Jolly,  68  Miss.  323, 
8  South.  513 ;  Gilliam  v.  Brown,  43  Miss.  641. 

Decree  affirmed. 


BALDWIN   BEOS.   v.    POTTER. 

46  Vt.  402.     1874. 

Assumpsit.    Judgment  for  plaintiffs.    Defendant  appeals. 

Defendant,  as  plaintiffs'  agent,  sold  prize  packages  of  candies  and 
collected  the  price.  Defendant  refused  to  account  for  the  moneys 
or  for  samples  of  the  prizes  intrusted  to  him,  and  defended  upon 
the  ground  of  the  illegality  of  the  transaction. 


272  BALDWIN  BBOS.  V.  POTTEB.  [CHAP.   VIII. 

PiERPOiNT,  C.  J.  We  do  not  find  it  necessary  in  this  case  to  con- 
sider the  question  as  to  whether  the  contract  for  the  sale  of  the 
property  referred  to,  by  the  plaintiffs,  to  the  several  persons  who 
purchased  it,  were  contracts  made  in  violation  of  law,  and  therefore 
void,  or  not.  This  action  is  not  between  the  parties  to  those  con- 
tracts; neither  is  it  founded  upon,  or  brought  to  enforce  them.  If 
those  contracts  were  illegal,  the  law  will  not  aid  either  party  in  respect 
to  them ;  it  will  not  allow  the  seller  to  sue  for  and  recover  the  price 
of  the  property  sold,  if  it  has  not  been  paid ;  if  it  has  been  paid,  the 
purchaser  cannot  sue  for  and  recover  it  back.  The  facts  in  this  case 
show  that  the  purchasers  paid  the  money  to  the  plaintiffs,  not  to  the 
plaintiffs  personally,  but  to  the  defendant  as  the  agent  of  the  plain- 
tiffs, authorized  to  receive  it.  When  the  money  was  so  paid  it  became 
the  plaintiffs'  money,  and  when  it  was  received  by  the  defendant  as 
such  agent,  the  law,  in  consideration  thereof,  implies  a  promise,  on 
the  part  of  the  defendant,  to  pay  it  over  to  his  principals,  the  plain- 
tiffs; it  is  this  obligation  that  the  present  action  is  brought  to  en- 
force: no  illegality  attaches  to  this  contract.  But  the  defendant 
insists  that,  inasmuch  as  the  plaintiffs  could  not  have  enforced  the 
contracts  of  sale  as  between  themselves  and  the  purchaser,  therefore, 
as  the  purchaser  has  performed  the  contracts  by  paying  the  money 
to  the  plaintiffs  through  me,  as  their  agent,  I  can  now  set  up  the 
illegality  of  the  contract  of  sale  to  defeat  an  action  brought  to  enforce 
a  contract  on  my  part  to  pay  the  money,  that  I  as  agent  receive,  over 
to  my  principal.  In  other  words,  because  my  principal  did  not 
receive  the  money  on  a  legal  contract,  I  am  at  liberty  to  steal  the 
money,  appropriate  it  to  my  own  use,  and  set  my  principal  at  de- 
fiance. We  think  the  law  is  well  settled  otherwise,  and  the  fact 
that  the  defendant  acted  as  the  agent  of  the  plaintiffs  in  obtaining 
orders  for  the  goods  does  not  vary  the  case.  Tenant  v.  Elliott,  1  B. 
&  P.  3;  Armstrong  v.  Toler,  11  Wheat.  258;  Evans  v.  City  of 
Trenton,  4  Zab.  (N.  J.)  764. 

We  think  the  certificate  granted  by  the  county  court  was  properly 
granted.  It  has  been  urged  in  behalf  of  the  defendant,  that  the  zeal 
with  which  he  has  defended  this  case  shows  that  he  intended  no 
wrong;  but  we  think  the  man  who  receives  money  in  a  fiduciary 
capacity,  and  refuses  to  pay  it  over,  does  not  improve  his  condition 
by  the  tenacity  with  which  he  holds  on  to  it. 

Judgment  of  the  county  court  affirmed} 

>  Illegal  Sales  generally.  An  agent  having  In  his  hands  the  proceeds  of  an 
Illegal  sale  of  his  principal's  property  must  pay  it  over.  Oilliam  v.  Brown,  43  Miss. 
€41 ;   Hertzler  v.  Geigley,  196  Pa.  419. 

Lotteries.  It  seems  to  have  been  generally  held  that  an  agent  who  sells  lottery 
tickets  for  his  principal  cannot  be  compelled  to  pay  the  money  over  to  the  principal. 
Lemon  v.  Grosskopf,  22  Wis.  447 ;  Mexican  Banking  Co.  v.  Lichtenstein,  10  Utah, 
338.  It  has  also  been  held  that  money  received  by  defendant  upon  a  joint  illegal 
adventure  with  the  plaintiff  in  a  lottery  drawing,  cannot  be  recovered.  Goodrich  v. 
Houghton,  134  N.  Y.  115.    But  the  contrary  has  also  been  held.    Boselle  v.  Becks- 


CHAP.  Vni.]  ACCOUNTING.  273 

NOETON   V.   BLINN. 

39  Oh.  St.  145.     1883. 

Action  to  recover  from  the  agent  the  sum  deposited  by  the  prin- 
cipal together  with  the  profits  made  therefrom  in  an  illegal  trans- 
action in  "  futures."  The  trial  court  refused  to  charge  that  if  the 
agent  received  such  sums  for  his  principal  he  was  bound  to  pay  them 
over  upon  demand  even  though  it  was  agreed  between  them  that  the 
money  first  deposited  should  be  used  in  an  unlawful  wagering  trans- 
action. Exception.  Verdict  and  judgment  for  defendant.  Eeversed 
in  District  Court.     Defendant  appeals. 

McIlvaine,  J.  While  it  has  ever  been  the  policy  of  the  law  to 
leave  the  parties  to  an  illegal  transaction  where  it  finds  them  by 
refusing  relief  to  either  in  respect  thereto,  it  has,  on  the  other  hand, 
never  regarded  property  or  money  employed  therein  or  produced 
thereby  as  common  plunder  to  be  seized  or  retained  by  others  in  no 
way  interested  in  such  business. 

The  question,  however,  in  this  case,  arising  on  the  refusal  of  the 
court  of  common  pleas  to  charge  the  jury  as  requested  by  the  plain- 
tiff is:  May  an  agent  who  has  transacted  illegal  business  for  his 
principal  and  has  received  money  belonging  to  his  principal  and 
accruing  from  such  business,  defend  himself,  in  a  court  of  law, 
against  liability  to  account  therefor,  by  showing  such  unlawful 
business  and  his  connection  therewith  as  such  agent? 

If  the  agent  receiving  such  money  had  not  been  employed  in  con- 
ducting such  business,  it  would  seem  to  be  quite  plain,  upon  prin- 
ciples of  purest  morality,  that  he  should  account  to  his  principal 
therefor ;  but  where  the  sole  employment  of  the  agent  was  to  manage 
and  conduct  the  unlawful  transactions,  it  seems  to  me  a  much  more 
difficult  question  arises.  In  the  latter  case  the  agent  is  a  particeps 
criminis.  In  offenses  against  trade,  and  the  like,  the  law,  regulating 
the  administration  of  penal  justice,  does  not  recognize  the  relation 
of  principal  and  agent,  unless  the  agent  be  an  innocent  instrument 
merely.  In  such  cases  the  guilty  offenders  against  the  law  are  all 
principals;  hence,  as  between  such,  with  some  show  of  reason  it 
might  be  said,  that  the  law  will  afford  no  redress  by  civil  remedies. 

The  rulings  upon  this  question,  however,  have  been  so  uniformly  the 
other  way,  it  becomes  our  duty  to  follow  them,  unless  we  find  them 
totally  repugnant  to  public  policy  and  morality.     Upon  a  careful 

meler,  134  Mo.  380.    One  who  as  agent  received  lottery  prize  money  for  another  was 
compelled  to  deliver  it  to  the  winner  In  Brady  v.  Horvath,  167  111.  610. 

In  Alexander  v.  Barker,  64  Kans.  397,  it  was  held  that  the  agent  need  not 
account  for  the  rents  of  Indian  lands  which  the  principal  had  illegally  seized  and 
occupied. 

18 


274  NORTON   V.   BLINN.  [CHAP.   VIII. 

examination  of  the  authorities,  we  find  no  repugnancy  —  indeed  they 
commend  themselves  to  our  judgment. 

In  the  first  place  the  rule  which  denies  civil  remedies  in  such  cases 
applies  only  to  the  parties  to  the  illegal  transaction.  Public  policy 
does  not  require  that  one  engaged  in  an  unlawful  enterprise  should, 
by  pleading  it,  shield  himself  from  liability  for  the  wages  of  his 
employees,  agents  or  servants.  It  is  enough  that  the  rule  should  be 
enforced  as  between  those  who  have  some  interest  in  the  enterprise 
as  principals. 

In  the  second  place,  it  is  contrary  to  public  policy  and  good  morals, 
to  permit  employees,  agents,  or  servants  to  seize  or  retain  the  property 
of  their  principal,  although  it  may  be  employed  in  illegal  business 
and  under  their  control.  No  consideration  of  public  policy  can 
justify  a  lowering  of  the  standard  of  moral  honesty  required  of 
persons  in  these  relations. 

And  again,  if  parties  to  an  illegal  contract,  waive  the  illegality, 
and  honestly  account  as  between  themselves,  no  other  person  can  be 
heard  to  complain  of  such  accounting.  Hence,  we  think,  that  if  in 
making  such  settlement  one  of  the  guilty  parties  should  deliver 
property  or  money  to  an  agent  of  another  to  be  delivered  by  the 
agent  to  his  principal,  such  agent  is  bound  to  account  therefor  to 
his  principal. 

A  leading  case  on  this  question  is  Tenant  v.  Elliott,  1  Bos.  and 
Pul.  3,  where  the  defendant,  a  broker,  effected  an  illegal  insurance  for 
the  plaintiff  on  a  ship,  and  after  a  loss  the  underwriters  paid  the 
amount  of  the  insurance  to  the  defendant,  who  refused  to  pay  the 
same  over  to  plaintiff,  on  the  ground  that  the  insurance  contract 
was  illegal.  Judgment  for  the  plaintiff.  Eyre,  C.  J.,  said :  "  The 
defendant  is  not  like  a  stakeholder.  The  question  is,  whether  he  who 
has  received  money  to  another's  use  on  an  illegal  contract,  can  be 
allowed  to  retain  it,  and  that  not  even  at  the  desire  of  those  who  paid 
it  to  him  ?    I  think  he  cannot." 

[The  court  also  cites  and  discusses  Brooks  v.  Martin,  2  Wall.  70 ;  ^ 
Baldwin  v.  Potter,  46  Vt.  402  ;2  Evans  v.  Trenton,  4  Zab.  764;  Wood 
on  M.  &  S.  §  202 ;  German,  etc.,  Church  v.  Stegner,  21  Ohio  St.  488.] 

Judgment  of  district  court  affirmed.^ 

*  This  case  Is  much  limited  by  McMulIen  v.  Hoffman,  174  U.  S.  639. 

'  Ante,  p.  271. 

»  Accord :  Floyd  v.  Patterson,  72  Tex.  202  (money  received  on  a  gambling  trans- 
action) ;  Hardy  v.  Jones,  68  Kans.  8  (unexpended  balance  of  fund  delivered  to  agent 
for  Illegal  purpose)  ;  Smith  v.  Blackley,  188  Pa.  550  (money  paid  to  agent  for  Illegal 
purpose  and  still  In  his  hands)  ;  Irwin  v.  Currle,  171  N.  Y.  409  (money  collected  by 
attorney  under  Illegal  champertous  contract  to  share  fee  with  brolcer). 

But  accounting  was  denied  against  an  agent  who  acted  for  plaintiffs  in  an  Illegal 
conspiracy  to  raise  the  price  of  commodities.  Leonard  v.  Poole,  114  N.  Y.  371.  See 
also  Bishop  V.  American  Preserves  Co.,  157  111.  284,  with  which  compare  Gilbert  v. 
American  Surety  Co.,  121  Fed.  Rep.  499,  and  Star  Brewery  Co.  v.  United  Brewery 
Co.,  121  Fed.  Bep.  713. 


CHAP.   VIII. J  APPOINTMENT  OF  SUB-AGENTS.  275 

HELBER   V.    SCHANTZ. 

109  Mich.  669.     1896. 

Assumpsit  by  Eugene  Helber  against  Martin  Schantz.  From  a 
Judgment  for  defendant  on  verdict  directed  by  the  court,  plaintiff 
brings  error. 

Moore,  J.  Plaintiff  furnished  five  dollars  to  defendant  with  which 
to  make  a  bet  upon  the  result  of  an  election.  The  bet  was  made,  and 
Schantz  won  the  money.  He  paid  plaintiff  five  dollars,  and  declined 
to  pay  over  the  balance.  Plaintiff  sued  him  in  justice's  court,  and 
recovered  a  judgment.  The  case  was  appealed  to  the  circuit  court. 
The  trial  judge  directed  a  verdict  for  the  defendant  upon  the  ground 
that  what  occurred  between  the  parties  was  a  gaming  transaction, 
and  that  the  courts  will  not  interfere  in  behalf  of  a  party  to  such 
a  transaction.    The  case  is  brought  here  by  writ  of  error. 

The  trial  judge  made  a  proper  disposition  of  the  case. 

The  judgment  is  affirmed. 

The  other  Justices  concurred. 


5.    Appointment  of  Sub-Agents. 

COMMERCIAL   BANK    OF   LAKE   ERIE   v. 
NORTON   ET   AL. 

1  Hill  (N.  Y.)  501.     1841. 

Assumpsit  by  plaintiffs  as  indorsees  against  defendants  as 
acceptors  of  two  bills  of  exchange.  Verdict  for  plaintiffs.  Defend- 
ants move  for  a  new  trial. 

E.  Norton  &  Co.,  the  defendants,  authorized  H.  Norton,  their 
general  agent,  to  accept  bills.  H.  Norton  directed  Cochrane,  a  book- 
keeper, to  accept  these  bills,  which  he  did  by  writing  across  the  bills, 
"  E.  Norton  &  Co.  —  per  A.  G.  Cochrane."  Cochrane  had  no 
authority  from  E.  Norton  &  Co.  to  accept  bills. 

By  the  Court,  Cowen,  J.  (after  deciding  that  there  was  evidence 
to  go  to  the  jury  that  H.  Norton  had  authority  to  accept  the  bills) . 
But  it  is  said  he  could  not  delegate  the  power  to  accept.  This  is 
not  denied,  nor  did  he  do  so.  The  bills  came  for  acceptance;  and 
having  as  agent  made  up  his  mind  that  they  should  be  accepted,  he 
directed  Cochrane,  the  book-keeper,  to  do  the  mechanical  part, — 


276  COMM.  BANK  OP  LAKE  EEIE  V.  NORTON  ET  AL.      [CHAP.    VIII. 

write  the  acceptance  across  the  bills.  He  was  the  mere  amanuensis. 
Had  anything  like  the  trust  which  is  in  its  nature  personal  to  an 
agent,  —  a  discretion  for  instance  to  accept  what  bills  he  pleased, 
—  been  confided  to  Cochrane,  his  act  would  have  been  void.  But 
to  question  it  here  would  be  to  deny  that  the  general  agent  of  a  mer- 
cantile firm  could  retain  a  carpenter  to  make  a  box,  or  a  cooper  to 
make  a  cask.  The  books  go  on  the  question  whether  the  delegation 
be  of  a  discretion.  Such  is  the  very  latest  case  cited  by  the  defend- 
ants' counsel  (Emerson  v.  The  Prov.  Hat  Manuf.  Co.,  12  Mass.  Rep. 
237,  241,  242) ;  and  the  latest  book  (2  Kent's  Com.  633,  4th  ed.). 
Blore  V.  Sutton  (3  Meriv.  237)  is  among  the  strictest  cases  I  have 
seen.  There  the  clerk  of  the  agent  put  his  own  initials  to  the 
memorandum,  by  direction  of  the  agent;  and  held,  insufficient. 
Henderson  v.  Barnewall  (1  Young  &  Jerv.  387)  followed  it.  Both 
were  cases  arising  under  the  Statute  of  Frauds,  which  requires  that 
the  memorandum  should  be  signed  by  the  principal  or  his  agent ;  and, 
I  admit,  it  is  very  difficult  to  distinguish  the  manner  of  the  signa- 
tures there  from  that  now  in  question,  by  Cochrane.  Everything 
there  seems  to  have  been  mechanical  merely,  as  here;  and  there  may 
be  some  doubt,  I  should  think,  whether  such  cases  can  be  sustained. 
At  any  rate,  in  our  attempt  to  apply  them,  we  are  met  with  a  case 
as  widely  the  other  way;  Ex  parte  Sutton,  2  Cox,  84.  The  rule  as 
there  laid  down  is,  that  "  an  authority  given  to  A.  to  draw  bills  in 
the  name  of  B.  may  be  exercised  by  the  clerks  of  A."  Such  is  the 
marginal  note,  and  it  is  entirely  borne  out  by  the  case  itself.  Peter 
Marshall  wrote  to  Lewis  &  Potter  authorizing  them  "  to  make  use 
of  his  name  by  procuration  or  otherwise  to  draw  bills  on  G.  &  J." 
The  clerk  of  Lewis  &  Potter  drew  the  bill,  signing  thus :  "  By  pro- 
curation of  Peter  Marshall,  Eobert  Edgecumbe."  The  Lord  Chan- 
cellor put  it  on  the  ground  that  the  signature  of  the  clerk  would  have 
bound  Lewis  &  Potter,  had  he  signed  their  name  under  the  general 
authority  which  he  had. 

We  thus  make  very  little  progress  one  way  or  the  other  on  direct 
English  authority.  Left  to  go  on  the  principle  of  any  other  English 
case  I  have  seen,  and  there  are  many,  all  we  have  to  say  is,  I  think, 
that  the  agent  shall  not  delegate  his  discretion;  but  may  at  least  do 
any  mechanical  act  by  deputy.  I  do  not  know  that  the  language 
of  Lord  Ellenborough  in  Mason  v.  Joseph  (1  Smith's  Eep.  406)  has 
been  anywhere  directly  carried  into  an  adjudication.  But  it  sounds 
so  much  like  all  the  cases  professing  to  go  on  principle,  that  I  can 
scarcely  doubt  its  being  law.  His  Lordship  said,  "  It  is  true  an 
attorney  appointed  by  deed  cannot  delegate  his  authority  to  a  third 
person.  He  must  exercise  his  own  judgment  on  the  principal  subject 
for  the  purpose  of  which  he  is  appointed;  but  as  to  any  mere 
ministerial  act,  it  is  not  necessary  that  he  should  do  it  in  person, 
if  he  direct  it  to  be  done,  or  upon  a  full  knowledge  of  it  adopt  it. 


CHAP.   VIII.]  APPOINTMENT   OF   SUB-AGENTS.  277 

Suppose  for  instance  he  had  got  the  gout  in  his  hands,  and  could  not 
actually  sign  himself,  he  might  have  authorized  another  to  sign 
for  him." 

New  trial  denied.^ 


McCEOSKEY   v.   HAMILTON. 
108  Ga.  640.     1899. 

Action  to  dispossess  tenant  and  recover  statutory  double  rent  since 
notice  to  quit.    Denial  that  term  had  expired.    Nonsuit. 

Under  the  lease  plaintiff  had  a  right  to  declare  a  forfeiture  for 
non-payment  of  rent.  Defendants  were  in  default,  and  one  Rustin, 
a  clerk  of  plaintiff's  authorized  agent,  was  sent  by  the  agent  to 
demand  the  rent  and  in  case  of  non-payment  to  give  notice  to  quit. 
Defendant  claimed  that  Rustin  was  not  plaintiff's  agent  and  had  no 
authority  to  give  notice  to  quit,  and,  having  no  authority,  his  acts 
could  not  afterward  be  ratified  by  plaintiff. 

Lumpkin,  P.  J.  (after  stating  the  facts).  It  may  be  true,  as 
matter  of  law,  that  if  Rustin's  acts  at  the  time  he  demanded  the 
rents  and  the  possession  of  the  premises  were  wholly  unauthorized, 
a  subsequent  ratification  of  them  by  Mrs.  McCroskey  would  not 
establish  by  relation  a  notice  to  the  Hamiltons  to  give  up  the 
premises.  1  Am.  &  Eng.  Enc.  L.  (3d  ed.)  1194.  "The  reason  is 
that  the  tenant  must  act  upon  the  notice  at  the  time  it  is  given,  and 
it  must,  therefore,  at  that  time,  be  such  a  notice  as  he  can  act  upon 
with  security ;  and  if  authority  by  relation  were  sufficient,  the  tenant 
would  be  subjected  to  the  injustice  of  being  left  in  doubt  as  to  his 
action  until  the  ratification  or  disavowal  of  the  principal."  Brahn 
V.  Jersey  City  Forge  Co.,  38  N.  J.  L.  74. 

We  agree  with  counsel  for  the  defendants  in  error,  that  Rustin  was 
not  acting  in  the  capacity  of  agent  for  Mrs.  McCroskey,  and  conse- 
quently we  do  not  think  that  the  doctrine  of  ratification  is  applica- 
ble. As  to  this  branch  of  the  case,  our  views  are  as  follows: 
Girardeau  was  unquestionably  Mrs.  McCroskey's  agent,  and  as 
such  was  not  only  authorized  but  expressly  directed  to  declare  the 
lease  forfeited  upon  non-compliance  with  its  terms.  He  certainly 
could,  in  his  own  proper  person,  have  exercised  the  authority  con- 
ferred upon  him  by  his  principal.  We  are  quite  clear  he  could  also 
do  so  by  using  his  servant,  and  that  as  to  this  matter  Rustin  was 
nothing  more.  He  was  not,  in  any  proper  sense,  a  sub-agent  of 
Girardeau,  but  a  mere  instrument.  On  this  occasion  he  simply  acted 
as  the  messenger  of  his  employer.    The  relation  between  Girardeau 

»  Accord :  Norwich  University  v.  Denny,  47  Vt.  13 ;  Weaver  i;.  Cornell,  35 
Ark.  198. 


278  ELDRIDGE  V.   HOLWAY.  [CHAP.    VIII. 

and  Rustin  was  plainly  that  of  master  and  servant.  Girardeau,  as 
agent  for  Mrs.  McCroskey  and  in  attending  to  her  business,  surely 
had  the  right  to  avail  himself  of  the  services  of  his  own  servant 
as  a  means  for  accomplishing  the  end  in  view.  "  It  is  a  general 
principle  that  an  agent's  authority  is  construed  to  embrace  all  the 
means  usual  and  necessary  for  its  proper  execution."  1  Am.  &  Eng. 
Enc.  L,  (2d  ed.)  979-980.  "A  deputy  possessing  general  powers 
may,  in  many  cases,  constitute  another  person  his  servant  or  bailiff, 
for  the  purpose  of  doing  some  particular  act;  provided,  of  course, 
that  such  act  be  within  the  scope  of  Ms  own  legitimate  agency." 
Broom's  Legal  Maxims  (7th  ed.),  841.  And  see  the  instances, 
pertinent  here,  which  this  great  author  gives  of  the  application  of 
this  rule.  Girardeau,  representing  Mrs,  McCroskey,  could  have  sent 
to  the  Hamiltons  by  Rustin  a  written  demand  for  the  rent  which 
had  been  due  for  more  than  thirty  days,  and  could  have  stated 
therein  that,  in  case  of  non-payment,  they  might  understand  that 
the  lease  was  at  an  end.  Instead  of  doing  this,  he  sent  Rustin  to  the 
Hamiltons  with  instructions  what  to  do;  and  we  shall  presently 
undertake  to  show  that  this  was,  in  substance,  the  same  thing  as 
sending  a  written  demand  and  notice  of  the  kind  just  indicated. 
The  distinction  between  "  servant "  and  "  agent "  is  clearly  pointed 
out  in  Mechem  on  Agency,  §  2,  and  Wharton  on  Agency,  §  19. 
According  to  these  authorities,  an  agent  has  more  or  less  discretion, 
while  a  servant  acts  under  the  master's  control  and  direction. 
Clearly,  Rustin  was  not  invested  with  any  discretion.  He  was  simply 
to  do  as  he  was  bid.^ 

The  next  question  is:  Did  Girardeau  direct  Rustin,  in  case  the 
demand  for  the  rent  was  not  compiled  with,  to  declare  a  forfeiture 
of  the  lease?  [The  court  then  holds  that  Rustin  was  directed  by  the 
agent  to  demand  possession  in  case  of  non-payment  of  the  rent,  and 
that  what  he  did  amounted  to  an  authorized  notice  that  plaintiff  was 
exercising  her  option  to  terminate  the  lease.] 

Judgment  reversed. 


ELDRIDGE    v.   HOLWAY. 

18  111.  446.     1857. 

Plaintiff  authorized  one  Cobb,  as  his  attorney  in  fact,  to  bring 
a  forcible  detainer  suit  against  the  defendant.  By  Cobb's  direction, 
one  Kales,  an  attomey-at-law,  served  a  written  notice  upon  the  de- 
fendant demanding  the  immediate  possession  of  the  premises  in 
controversy. 

*  See  Kingan  v.  Silvers,  ante,  p,  1. 


CHAP.   VIII.]  APPOINTMENT   OF   SUB-AGENTS.  279 

ScATES,  C.  J.  An  attorney  in  fact  of  plaintiff  employed  an  attor- 
ney-at-law  in  this  case,  who  served  the  written  notice  and  demand 
of  possession.  The  court  excluded  this  evidence  on  the  ground  that 
delegated  authority  can  not  be  delegated. 

This  is  true  as  a  general  principle,  when  properly  applied  to  the 
classes  of  cases  where  personal  confidence  is  reposed,  and  skill,  judg- 
ment, etc.,  are  involved.  Story  on  Agency,  §§  12,  13,  14.  It  was, 
doubtless,  to  obviate  this  literal  application  of  the  principle  that 
the  convention,  out  of  abundant  caution,  inserted  clause  17  of  sec- 
tion 8,  article  1,  in  the  Constitution  of  the  United  States.  3  Story, 
€om.  Const.  §§  1236-7.  Some  powers  arise  by  implication,  as  inci- 
dents to  others,  and  are  essential  to  their  exercise.  So,  in  the  per- 
formance of  a  general  or  special  agency,  many  acts  are  to  be  per- 
formed, of  an  indifferent  nature,  which  may  as  well  be  done  by  one 
person  as  another,  and  which  an  agent  might  find  it  extremely 
inconvenient  to  be  compelled  to  perform  personally.  The  maxim 
withholding  the  power  of  subdelegation  of  authority  only  has  place 
when  there  is  an  object,  an  end  to  be  gained  —  where  the  interest 
of  the  principal  may  be  neglected  or  injured  by  substitution.  When, 
from  the  nature  of  the  act  to  be  done,  there  can  be  no  difference,  the 
principle  can  not  apply. 

Such  is  the  case  here.  There  is  neither  confidence,  skill,  discretion 
or  judgment  required  to  deliver  a  written  notice,  and  make  oath 
of  it,  which  could  prevent  the  employment  of  any  one  by  an 
agent.  The  service  of  declarations  in  ejectment,  notices  to  take 
depositions,  and  a  great  variety  of  acts  now  done  by  attorneys'  clerks 
and  others,  would  fall  under  the  same  rule  contended  for,  and  compel 
attorneys  to  do  such  acts  personally. 

An  attorney  may  serve  such  notice  and  demand,  and  we  perceive 
no  reason  why  an  agent,  to  bring  suit,  may  not  employ  an  attorney. 
Agents,  as  such,  can  not  appear  in  courts  for  parties.  Where  agents 
are  not  licensed  as  attorneys,  they  must  employ  attorneys  to  appear 
for  the  client  in  the  courts. 

The  act  here  falls  strictly  within  a  class  which  may  be  done  by 
such  supposed  subdelegation.  It  is  rather  the  true  and  only  mode 
of  acting  out  an  agency  when  an  attorney  becomes  necessary,  than 
a  subdelegation  of  power. 

Had  the  agency  here  been  an  attorneyship,  it  might  present  an- 
other question  —  one  involving  a  question  of  confidence  reposed, 
or  skill  and  judgment  —  which  could  not  be  transferred.  But  the 
agency  does  not  appear  to  be  of  that  character. 

Judgment  reversed  and  cause  remanded. 

Judgment  reversed* 


280  FRANKLIN   FIRE   INS.    CO.    V.   BRADFORD.        [CHAP.   VIII. 

FEANKLIN  FIEE  INS.  CO.  v.   BRADFOED. 

201  Pa.  St.  32.     1901. 

Action  against  an  agent  for  loss  occasioned  to  the  principal 
through  the  disobedience  of  the  agent.  The  trial  judge  directed 
a  verdict  for  defendant. 

Dean,  J.  The  defendant,  Thomas  Bradford,  was  a  duly-appointed 
agent  of  the  Franklin  Fire  Insurance  Company  at  New  Brighton, 
Pa.,  with  authority  to  effect  insurance,  countersign,  issue,  and  renew 
policies  signed  by  the  president  and  attested  by  the  secretary  at  the 
oflBce  of  the  company  in  Philadelphia,  to  fix  premium  rates,  receive 
money,  and  in  general  to  attend  to  all  the  business  of  the  company 
at  New  Brighton  and  the  neighboring  region,  subject,  however,  to 
the  rules,  regulations  of,  and  such  instructions  as  might  from  time 
to  time  be  given  him  by  the  general  officers  of  the  company.  The 
appointment  was  made  in  1887,  and  Bradford  continued  to  act  under 
it  until  January  1,  1897.  By  their  terms  policies  had  no  force  imtil 
countersigned  by  Bradford,  the  local  agent.  During  his  agency 
Bradford  employed  a  sub-agent,  —  one  Hoyt,  —  who  was  given  by 
him  general  charge  of  Bradford's  insurance  business,  and  had  access 
to  all  documents  and  blank  policies,  and  was  an  occupant  of  his  office 
in  New  Brighton.  As  such  sub-agent  for  Bradford,  he  solicited 
policies,  fixed  rates,  collected  premiums,  and  filled  blanks  in  policies, 
made  daily  reports  to  the  company,  and  signed  Bradford's  name  to 
them.  A  short  time  before  July  1,  1896,  J.  and  E.  Mayer,  ownera 
of  a  pottery  at  Beaver  Falls,  wrote  to  Bradford,  asking  to  renew 
insurance  of  $15,000,  which  Bradford  had  before  that  taken  on  their 
pottery  for  one  year  in  the  Franklin  and  other  companies,  of  which 
he  was  also  agent,  which  policies  were  about  to  expire.  In  response 
to  the  letter,  Hoyt  went  to  the  place  of  business  of  the  pottery  com- 
pany, and  delivered  to  the  company  policies  aggregating  $15,000, 
to  run  for  one  year,  to  take  the  place  of  those  about  to  expire. 
Among  the  renewal  policies  was  one  for  $2,000  in  the  Franklin 
Company,  this  appellant.  The  policy  was  signed  by  the  president 
and  attested  by  the  secretary.  It  was  also  countersigned  with  the 
name  of  Thomas  Bradford,  agent.  The  total  premiums  on  the 
whole  $15,000  were  paid  by  one  check  in  the  sum  of  $225  drawn 
by  the  Mayers  and  the  pottery  company,  and  payable  to  the  order 
of  Thomas  Bradford.  This  check  was  deposited  to  the  general 
account  of  Bradford  in  the  National  Bank  of  New  Brighton.  The 
amount  of  premium  paid  on  this  policy  was  $30. 

On  the  21st  of  October  following,  within  the  year,  the  pottery  was 
destroyed  by  fire,  and  the  insurance  company  had  to  pay  its  share 


CHAP.   VIII.]  APPOINTMENT  OF   SUB-AGENTS.  281 

of  the  loss,  —  the  $2,000  covered  by  the  policy.  It  will  be  noticed 
that  the  policy  was  delivered  by  Hoyt  to  the  insured  on  the  1st  of 
July,  1896,  but  before  that  date  the  insurance  company,  through  ita 
general  state  agents,  had  notified  Bradford  to  issue  no  policies  on 
the  pottery,  such  property  not  being  considered  a  satisfactory  risk. 
While  daily  reports  of  the  business  had  been  made  to  the  company 
by  Bradford,  no  report  was  made  of  this  risk,  Bradford's  name  had 
been  countersigned  on  the  policy  by  Hoyt  as  if  Bradford  himself 
had  written  it,  but  without  express  authority  from  him,  and  without 
his  actual  knowledge.  We  may  remark  here  that,  while  the  evidence 
shows  there  was  no  express  authority  to  Hoyt  by  Bradford  to  sign 
Bradford's  name  to  the  policy,  there  was  evidence  from  which  such 
authority  might  have  been  inferred;  but  this  is  not  material,  in  the 
view  we  take  of  the  question.  We  assume  that  Hoyt  had  no  such 
authority.  But  the  evidence  fails  to  show,  as  argued,  that  Hoyt 
committed  a  criminal  act  —  that  is,  a  forgery  —  when  he  afi&xed 
Bradford's  name.  "  Forgery  is  the  fraudulent  making  of  a  writing 
to  the  prejudice  of  another's  right."  Evidence  of  the  fraudulent 
intent  is  here  almost  wholly  lacking.  Hoyt  earned  the  premium,, 
and  the  insured  paid  it  over  to  Bradford,  into  whose  account  it 
entered,  and  he  received  the  commission.  Hoyt  appropriated  not  one 
cent  to  his  own  use;  nor  does  the  evidence  show  that  he  benefited 
in  the  remotest  degree  by  the  act.  There  is  no  evidence  indicating 
a  fraudulent  intent. 

After  paying  the  loss,  the  company  brought  this  suit  against 
Bradford  to  recover  the  amount  paid,  averring  as  a  cause  of  action 
that  their  payment  was  occasioned  by  reason  of  Bradford's  mal- 
feasance and  neglect  of  duty.  The  learned  judge  of  the  court  below, 
after  hearing  the  evidence,  directed  a  verdict  for  defendant  on  the 
grounds  that  Bradford  had  no  knowledge  of  the  delivery  of  the 
policy  by  Hoyt,  nor  any  knowledge  of  the  payment  by  the  pottery 
company  of  the  premium.  From  judgment  entered  on  this  verdict, 
plaintiff  now  appeals,  assigning  for  error  the  peremptory  instruction 
of  the  court. 

That  Hoyt  was  the  authorized  agent  of  Bradford,  the  principal 
agent,  is  not  questioned.  This  being  the  fact,  the  insurance  company 
at  once  invokes  the  application  of  the  rule :  "  The  principal  is- 
responsible  civiliter  to  third  persons  for  the  acts,  even  the  tortious 
acts,  of  his  agent,  if  done  in  the  course  of  the  agenf  s  employment, 
although  the  principal  did  not  authorize  the  acts,  or,  indeed,  may 
have  forbidden  them."  Railroad  Co.  v.  Derby,  14  How.  468,  14  L. 
Ed.  502;  Hower  v.  Ulrich,  156  Pa.  412,  27  Atl.  37;  Brunner  v. 
Telegraph  Co.,  151  Pa.  447,  25  Atl.  29 ;  and  many  other  cases.  How 
does  the  court  below  relieve  the  defendant  from  the  application 
of  the  rule?  It  answers:  (1)  Bradford  had  no  knowledge  of  the 
delivery  of  the  policy.    (2)  He  had  no  knowledge  that  Hoyt  received 


283  FRANKLIN  FIRE  INS.   CO.   V.   BRADFORD.       [CHAP.  YIU, 

the  premium,  and  deposited  the  same  in  the  bank  to  his  (Bradford's) 
account. 

That  the  policy,  when  delivered,  fixed  the  liability  of  the  company, 
cannot  be  doubted.  In  fact,  that  liability  was  judicially  decided  by 
the  common  pleas,  and  the  company  had  to  pay.  True,  Bradford 
was  not  a  party  defendant  to  that  suit,  and  is  not  concluded  by  that 
judgment,  but  he  is  a  party  to  this  one,  in  which  all  the  evidence 
has  been  heard,  and  we  are  constrained  to  hold  that,  if  the  same 
evidence  had  been  presented  then,  the  judgment  would  have  been  the 
same.  We  turn,  then,  to  inquire  if  the  reasons  given  by  the  learned 
judge  are  sufficient  to  sustain  the  judgment.  Assume  the  fact  that 
Bradford  had  no  specific  knowledge  of  the  delivery  of  this  particular 
policy ;  but  Hoyt  was  his  agent  for  that  very  purpose.  He  had  access 
to  the  blanks  in  the  office,  and  had  Bradford's  authority  to  deliver 
them.  He  was  not  the  agent  of  the  company,  and  had  no  authority 
from  it.  All  his  authority  was  derived  from  Bradford,  and  by 
reason  of  Bradford's  authority  the  company  was  compelled  to  pay. 
What  one  does  by  another  he  does  by  himself.  Hoyt,  having  general 
authority  to  take  the  blanks  from  the  office,  fill  them  up,  and  deliver 
them,  made  the  act  that  of  Bradford.  It  does  not  follow  that,  to 
be  his  act,  he  must  have  handed  this  particular  blank  to  Hoyt,  and 
have  directed  him  to  fill  it  up  for  the  pottery  company.  Hoyt's 
general  authority  to  fill  up  particular  policies  and  receive  the  pre- 
miums would  cover  this  particular  act.  The  pottery  company  wrote 
to  Bradford,  asking  for  the  insurance.  In  response,  Hoyt  took  from 
the  office  the  blank,  filled  it  up,  and  delivered  it.  As  to  Bradford, 
it  must  be  conclusively  presumed  that  he  knew  that  Ho}i;  did  just 
what  he  gave  him  opportunity  and  power  to  do.  The  principal  who 
has  conferred  general  power  on  an  agent  cannot  escape  answerability 
for  a  particular  act  of  the  agent  within  the  scope  of  the  general 
power.  If  the  business  was  large,  and  the  distinct  acts  necessary 
to  its  transaction  were  numerous,  it  would  be  unreasonable  to  assume 
that  the  principal  would  have  specific  knowledge  of  each  particular 
act.  But  this  fact  does  not  shield  the  principal.  It  only  suggests 
extreme  care  in  the  selection  of  his  agent.  We  hold  that  Bradford 
legally  had  knowledge  of  the  act  he  gave  his  agent  authority  to 
perform. 

Second.  The  court  holds  that  Bradford  had  no  knowledge  that  any 
premium  had  been  paid  to  Hoyt,  and  credited  to  his  account.  The 
fact  that  the  premium  had  been  paid  is  important  only  in  fixing  the 
liability  of  the  insurance  company.  A  condition  precedent  to  recov- 
ery is  the  payment  by  the  insured  of  the  premium.  Bradford  avers 
that  Hoyt  alone  received  the  premium,  and  deposited  it  to  his  (Brad- 
ford's) credit  in  the  bank;  that  he  had  no  knowledge  of  the  fact. 
Here  again  knowledge  must  be  conclusively  presumed  on  his  part. 
It  is  highly  probable  that  among  a  large  number  of  items  to  his 


CHAP.   VIII.]  APPOINTMENT   OF   SUB-AGENTS.  283 

credit  in  the  bank  he  had  no  specific  knowledge  of  this  particular 
item,  and  he  could  probably  say  the  same  of  most  of  the  others. 
Depositors  having  large  bank  accounts  generally  send  their  agents 
or  messengers  with  the  funds  in  the  shape  of  bills,  checks,  or  drafts 
to  make  the  deposits,  and  have  little  knowledge  of  the  particular 
items.  Here  Hoyt  made  this  deposit,  with  many  others,  to  the  credit 
of  Bradford.  Bradford  had  a  right  to  know  just  what  they  were. 
He  could,  by  a  mere  examination  of  his  own  account,  have  known 
whence  came  every  dollar.  'No  other  had  such  right.  If  he  chose 
not  to  exercise  his  right,  to  remain  in  ignorance,  still  the  law  will 
impute  to  him  knowledge  of  how  he  became  the  owner  of  the  money 
which  stood  in  his  name  in  the  bank.  It  must  be  borne  in  mind  that 
this  is  not  a  criminal  prosecution,  where  knowledge  might  be  an 
important  element  as  showing  intent,  but  is  a  civil  suit  for  damages 
occasioned  by  neglect  of  an  agent  to  obey  the  instructions  of  his 
principal.  The  evidence  shows  conclusively  that  Bradford  flatly 
disobeyed  the  instructions  of  the  Fire  Insurance  Company  not  to 
insure  the  pottery,  and  that  by  reason  of  this  disobedience  the  com- 
pany had  to  pay.  In  its  most  favorable  aspect  for  defendant,  he 
comes  under  the  rule  "  that,  where  one  of  t\vo  innocent  persons  must 
suffer  from  the  wrongful  act  of  a  third,  the  loss  should  be  borne  by 
him  who  put  the  wrongdoer  in  a  position  of  trust  and  confidence, 
and  thus  enabled  him  to  perpetrate  the  wrong." 

The  judgment  is  reversed,  and  venire  facias  de  novo  awarded.^ 


POWEE   ET   AL.   v.    FIRST   NATIONAL   BANK. 

6  Mont.  251.     1887. 

Action  to  recover  the  amount  of  a  draft  deposited  by  plaintiffs 
•with  defendant  for  collection.  Defendant  sent  the  draft  to  its 
correspondent  at  the  place  of  payment.  The  correspondent  collected 
the  draft,  but  failed  to  remit,  and  subsequently  became  insolvent. 
Judgment  for  defendant.    Plaintiffs  appeal. 

McLeary,  J.  .  .  .  The  question  of  how  far  a  bank  is  liable  for 
the  default  of  a  correspondent  or  collecting  agent  in  regard  to  a 
collection  is  one  which  has  been  solved  in  at  least  three  different  ways 
by  the  many  courts  of  last  resort  in  the  United  States  which  have 
at  different  times  had  the  matter  under  consideration.  One  class 
of  cases  maintains  the  absolute  liability  of  a  bank  for  any  default 
of  its  correspondent  or  collecting  agent,  in  the  same  manner  as  it 

>  A  contrary  conclusion  was  reached  on  the  same  facts  In  Bradford  v.  Hanover 
Fire  Ins.  Co.,  102  Fed.  Rep.  48,  the  court  holding  that  Bradford  had  not  clothed 
Hoyt  with  any  apparent  authority  to  sign  the  policy  and  deliver  It  to  the  Potter/ 
Company  and  was  not  therefore  estopped  to  repudiate  the  act  of  his  clerk. 


284  POWEE  ET  AL.   V.   FIRST  NATIONAL  BANK.      [CHAP.  VTII. 

would  be  for  the  default  of  its  own  employes,  on  the  principle  that 
the  bank,  by  undertaking  the  collection,  obligated  itself  to  see  that 
every  proper  measure  was  taken,  and  regarding  the  collector  as  the 
agent  of  the  bank,  and  not  as  the  agent  of  the  owner  of  the  com- 
mercial paper.  A  second  class  of  cases  holds  that  the  bank  is  liable 
only  for  the  exercise  of  due  care  and  diligence  in  selecting  a  trust- 
worthy agent  or  correspondent,  and  that  there  being  in  the  deposit 
for  collection  the  implied  authority  to  employ  a  sub-agent,  that  such 
sub-agent  becomes,  when  chosen,  the  agent  of  the  holder,  and  not 
of  the  bank  which  selected  him.  The  third  class  of  cases  draws 
a  distinction  between  the  cases  in  which  the  payer  resides  where  the 
bank  is  situated,  and  the  cases  where  he  resides  at  a  distance :  in  the 
first  place  making  the  bank  liable  absolutely  for  any  default  or 
wrongful  act,  and  in  the  second  place  only  making  the  bank  liable 
for  the  proper  selection  of  a  competent  and  reliable  agent,  with 
proper  instruction.     1  Daniel,  Neg.  Inst.  §  341. 

The  cases  of  the  first  class  are  found  principally  in  the  decisions 
of  the  courts  of  the  United  States  and  the  states  of  New  York,  New 
Jersey,  Pennsylvania,  Ohio,  and  Indiana.  The  cases  of  the  second 
class  are  found  chiefly  in  the  reports  of  Massachusetts,  Connecticut, 
Maryland,  Mississippi,  Missouri,  and  Iowa.  The  third  class  of  cases 
is  made  up  of  those  decided  by  the  courts  of  Illinois,  Tennessee, 
Wisconsin,  and  Louisiana. 

Inasmuch  as  there  is  such  a  variety  of  opinions  to  be  found  among 
the  highest  courts  on  this  important  question,  it  is  proposed  to  ex- 
amine at  some  length  such  of  them  as  are  accessible  to  us,  and  thence 
deduce  what  we  consider  to  be  the  true  rule  governing  such  cases. 

There  has  never  been  any  adjudication  on  a  question  similar  to 
this  in  this  court ;  and  so  far  as  concerns  this  territory,  this  is  a  case 
of  first  impression. 

(The  court  then  makes  an  exhaustive  review  of  the  authorities, 
which  is  too  extended  to  reprint  here.) 

The  foundation  for  all  the  differences  of  opinion  among  the  learned 
judges  who  have  had  the  matter  under  consideration  appears  clearly 
to  rest  in  the  interpretation  of  the  implied  contract  between  the 
depositor  and  the  bank  at  the  time  the  negotiable  paper  is  deposited 
for  collection.  Where  there  is  an  express  contract,  it  must,  of  course, 
be  followed,  and  there  is  no  room  for  a  difference  of  opinion ;  and  all 
of  the  decisions  herein  styled  cases  of  the  second  and  third  classes 
are  founded  on  the  idea  that  the  course  of  business  or  the  customs 
of  bankers,  or  the  necessities  of  the  case,  or  the  peculiar  circum- 
stances, raise  some  other  presumption  than  the  one  that  the  bank 
receiving  the  deposit  for  collection  undertakes  to  collect  it,  and 
assumes  all  the  risks  from  the  negligence  or  default  of  the  agents 
which  it  employs.  We  do  not  believe  that  any  other  contract  can 
be  inferred  from  the  mere  tender  and  acceptance  of  negotiable  paper 


CHAP.   VIII.]  APPOINTMENT  OF  SUB-AGENTS.  285 

for  collection.  No  matter  where  the  debtor  may  reside,  nor  what 
agencies  it  is  necessary  to  employ  in  the  collection,  the  depositor 
is  not  supposed  to  be  acquainted  with  the  methods  to  be  employed 
by  the  bank  in  collecting  its  paper,  or  the  carefulness,  skill,  solvency, 
or  honesty  of  the  agents  whom  it  may  be  necessary  to  employ  in  such 
collections.  Besides,  it  is  the  universal  custom  of  banks,  on  receiving 
collections,  to  pass  them  to  the  credit  of  the  owner,  and  to  indorse 
and  transmit  them  to  their  correspondents,  where  they  are  in  like 
manner  passed  to  the  credit  o*f  the  indorser,  and  so  on  until  collec- 
tion; and,  if  the  collection  fails  on  account  of  the  insolvency  of  the 
debtor,  and  through  no  fault  of  any  intermediate  bank  or  agent,  the 
paper  is  returned,  and  charged  back,  until  it  reaches  the  original 
depositor  and  indorser,  who  is  called  upon  to  make  it  good.  Such 
was  the  course  pursued  in  the  case  at  bar,  and  the  defendant  is  clearly 
liable  for  the  amount  collected. 

On  mature  consideration  of  the  authorities,  supporting  all  shades 
of  opinion  on  this  subject,  we  fully  agree  with  the  views  expressed  in 
1  Daniel,  Neg.  Inst.  §  342,  and  hold  that,  in  the  absence  of  a  special 
contract,  a  bank  is  absolutely  liable  for  any  laches,  negligence,  or 
default  of  its  correspondent  whereby  the  holder  of  negotiable  paper 
suffers  loss.  By  such  a  rule  alone  can  the  depositor  who  intrusts  his 
business  to  a  bank  be  secure  against  carelessness  or  dishonesty  on 
the  part  of  collecting  agencies  employed  by  banks  to  carry  out  their 
contracts.  Banks  can  easily  avoid  the  effects  of  this  stringent  rule 
by  making  special  contracts  in  special  cases,  or  declining  to  undertake 
collections  at  points  where  they  have  any  fears  as  to  the  reliability 
or  solvency  of  the  agents  whom  they  will  be  obliged  to  employ;  but 
when  they  undertake  collections,  either  at  their  own  location,  or  at 
distant  points,  without  a  special  contract  limiting  their  liability, 
they  must  be  held  to  do  so  for  a  sufficient  consideration,  and  to  be 
responsible  absolutely  to  the  owner  of  negotiable  paper  for  the  pay- 
ment of  all  money  collected  thereon,  and  for  all  losses  occurring 
through  the  negligence  of  the  agent,  resulting  in  a  failure  to  make 
such  collection. 

In  accordance  with  these  views,  the  judgment  is  hereby  reversed, 
and  the  case  remanded  for  a  new  trial. 

Judgment  reversed. 


GUELICH   V.   NATIONAL   STATE   BANK. 

56  Iowa,  434.     1881. 

Action  to  recover  the  amount  of  a  bill  of  exchange  deposited 
with  defendant  for  collection  by  plaintiff's  testator,  which  defendant 
failed  to  present  for  payment  to  the  drawee  or  to  protest  for  non- 


286  GUELICH    V.   NATIONAL   STATE   BANK.  [CHAP.   VIII. 

payment,  whereby  the  other  parties  to  the  paper  were  discharged. 
There  was  a  trial  by  the  court  without  a  jury  and  judgment  for 
plaintiff;  defendant  appeals.  The  facts  of  the  case  appear  in  the 
opinion. 

Beck^  J.  I.  The  paper  in  question  in  this  suit  was  a  foreign  bill 
drawn  in  Munich,  Westphalia,  upon  New  York,  and  was  deposited 
with  defendant  for  collection.  In  the  usual  course  of  business  of  the 
bank,  it  was  sent  by  defendant  to  its  correspondent,  the  Metropolitan 
Bank  of  New  York.  It  may  be  conceded,  in  the  view  we  take  of  the 
case,  that,  for  the  reason  the  paper  was  not  presented  for  payment 
and  protested  for  non-payment  by  the  New  York  bank  within  the 
time  required  by  law,  the  drawers  and  indorsers  of  the  bill  were 
discharged.  Counsel  for  defendant  insist  that  for  the  reason  the 
paper  was  overdue  when  received  by  defendant  no  liability  attaches 
for  failure  to  protest  it  for  non-payment.  They  also  argue  that 
defendant  as  a  national  bank  is  not  liable  for  the  default  charged  in 
the  petition.  These  and  other  questions  discussed  by  counsel  we  need 
not  consider, ,  as  the  decision  of  the  case  turns  upon  another  point 
arising  upon  facts  we  have  just  stated. 

II.  The  question  which,  in  our  opinion,  is  decisive  of  the  case, 
is  this:  Is  defendant  liable  for  the  default  of  its  correspondent,  the 
New  York  bank,  in  failing  to  present  and  protest  the  bill  in  due 
time  ? 

The  paper  was  deposited  with  defendant  for  collection;  it  was 
payable  in  New  York.  The  course  of  business  of  defendant,  and  all 
other  banks  is,  in  such  cases,  to  make  collections  through  corre- 
spondents. They  do  not  undertake  themselves  to  collect  the  bills, 
but  to  intrust  them  to  other  banks  at  the  place  payment  is  to  be 
made.  The  holder  of  the  paper,  having  full  notice  of  the  course  of 
business,  must  be  held  to  assent  thereto.  He,  therefore,  authorizes 
the  bank  with  whom  he  deals  to  do  the  work  of  collection  through 
another  bank. 

We  will  now  inquire  as  to  the  relations  existing  between  the  bank 
charged  with  the  collection  of  the  paper,  and  the  holder  depositing 
it  with  the  first  bank. 

The  bank  receiving  the  paper  becomes  an  agent  of  the  depositor 
with  authority  to  employ  another  bank  to  collect  it.  The  second 
bank  becomes  the  sub-agent  of  the  customer  of  the  first,  for  the 
reason  that  the  customer  authorizes  the  employment  of  such  an  agent 
to  make  the  collection. 

The  paper  remains  the  property  of  the  customer,  and  is  collected 
for  him ;  the  party  employed,  with  his  assent,  to  make  the  collection, 
must  therefore  be  regarded  as  his  agent. 

A  sub-agent  is  accountable  ordinarily  only  to  his  superior  agent 
when  employed  without  the  assent  or  direction  of  the  principal. 
But  if  he  be  employed  with  the  express  or  implied  assent  of  the 


CHAP.   VIII.]  APPOINTMENT  OF   SUB-AGENTS.  287 

principal,  the  superior  agent  will  not  be  responsible  for  his  acts. 
There  is,  in  such  a  case,  a  privity  between  the  sub-agent  and  the 
principal,  who  must,  therefore,  seek  a  remedy  directly  against  the 
sub-agent  for  his  negligence  or  misconduct.  Story  on  Agency, 
§§  217  and  313.  These  familiar  rules  of  the  law,  applied  to  the 
case,  relieve  it  of  all  doubt  when  considered  in  the  light  of  legal 
principles. 

III.  But  there  is  conflict  in  the  adjudged  cases  upon  the  question, 
of  the  direct  liability  of  the  bank  employed  as  a  sub-agent  to  the 
holder  of  the  paper,  for  negligence  or  default  in  its  collection.  The 
preponderance  of  the  authorities  strongly  supports  the  conclusion 
we  have  just  reached  in  this  case.  The  following  cases  are  to  this 
effect:  Dorchester  &  Milton  Bank  v.  New  England  Bank,  1  Cush. 
177;  Fabens  v.  Mercantile  Bank,  23  Pick.  330;  Lawrence  v.  Stoning- 
ton  Bank,  6  Conn.  521 ;  East  Haddam  Bank  v.  Scovil,  12  Conn.  303 ; 
Hyde  et  al.  v.  Planters'  Bank,  17  La.  Ann.  560;  Baldwin  v.  Bank 
of  Louisiana,  1  La.  Ann.  13;  ^tna  Insurance  Co,  v.  Alton  City 
Bank,  25  111.  243 ;  Stacy  v.  Dane  County  Bank,  12  Wis.  629 ;  Tiernan 
V.  Commercial  Bank,  7  How.  (Miss.)  648;  Agricultural  Bank  v. 
Commercial  Bank,  7  Sm.  &  M.  592;  Bowling  v.  Arthur,  34  Miss. 
41;  Jackson  v.  Union  Bank,  6  Har.  &  J.  146;  Citizens'  Bank  v. 
Howell,  8  Md.  530;  Bank  of  Washington  v.  Triplett,  1  Pet.  25; 
Mechanics'  Bank  v.  Earp,  4  Rawle,  384;  Bellemire  v.  The  F.  S. 
Bank,  1  Miles,  173;  S.  C.  4  Wheat.  105;  Daly  v.  Butchers'  & 
Drovers'  Bank,  56  Mo.  94;  Smedes  v.  The  Bank  of  Utioa,  20 
Johns.  372.  . 

IV.  The  following  cases  hold  that  the  bank  to  whom  a  bill  or 
note  is  sent  for  collection  by  another  bank  is  not  the  agent  of  the 
owner  of  the  paper:  Allen  v.  Merchants'  Bank,  22  Wend.  215; 
Downer  v.  Madison  Co.  Bank,  6  Hill,  648;  Montgomery  Co.  Bank 
V.  Albany  City  Bank,  3  Seld.  459 ;  Commercial  Bank  v.  Union  Bank, 
1  Kern.  203 ;  S.  C.  19  Barb.  391 ;  Ayrault  v.  Pacific  Bank,  47  N.  Y. 
570;  Indig  v.  Brooklyn  City  Bank,  16  Hun,  200;  Reeves  v.  St. 
Bank  of  Ohio,  8  Ohio  St.  465. 

V.  Bradstreet  v.  Everson,  72  Pa.  St.  124;  Lewis  &  Wallace  v. 
Peck  &  Clark,  10  Ala.  142,  and  Pollard  v.  Rowland,  2  Blackford, 
22,  are  sometimes  quoted  as  according  with  the  cases  last  cited. 
We  think  they  are  distinguished  from  all  the  conflicting  cases  above 
referred  to,  by  the  fact  that  the  parties  receiving  the  paper,  being 
collecting  agents  only,  became  bound,  either  by  express  or  implied 
contracts,  to  make  the  collections  themselves.  In  the  other  cases 
there  was  no  such  contract  shown,  but  on  the  contrary  it  appears 
that  banks  in  their  usual  course  of  business  make  collections  of  notes 
and  bills  at  distant  places  through  their  correspondents,  with  the 
implied  assent  of  the  parties  depositing  such  paper  with  them.  The 
collecting  bank  thus  becomes  the  sub-agent  of,  and  is  responsible 


2S8  GUELICH   V.   NATIONAL   STATE  BANE.  [CHAP.   VIII. 

to,  the  owners  of  the  paper.     See  Story  on  Agency,  §  217  a,  and 
cases  cited. 

The  decision  in  Bank  of  Washington  v.  Triplett,  1  Pet.  25,  and 
Mechanics'  Bank  v.  Earp,  4  Rawle,  384,  are  based  upon  the  ground 
that  the  paper  in  each  case  was  deposited  for  transmission,  and  not 
for  collection,  that  is,  the  receiving  bank  undertook  to  transmit  the 
paper  to  its  correspondent  and  not  to  collect  it.  This  very  element, 
in  our  opinion,  is  in  all  the  cases  cited  to  support  our  position,  and 
in  the  case  before  us.  Under  the  usage  of  banks,  paper  received  for 
collection  at  the  places  other  than  the  town  or  city  where  the  receiv- 
ing bank  is  located,  is  received  under  the  implied  contract  that  it 
is  accepted  for  transmission  to  correspondents  at  the  place  where 
it  is  payable.  These  cases,  we  think,  are  in  accord  with  the  other 
decisions  we  have  cited  in  support  of  our  views. 

Mackersy  v.  Eamsays,  9  Clark  &  F.  818,  is  not  in  conflict  with 
the  doctrine  we  adopt.  In  that  case  the  receiving  bank  expressly 
undertook  to  forward  the  paper,  and,  upon  its  payment,  to  place  the 
amount  thereof  to  the  credit  of  the  depositor,  and  for  the  perform- 
ance of  its  undertaking  it  was  to  receive  a  commission.  The  paper 
was  collected  by  its  correspondent,  who  failed  soon  after,  and  the 
bank  receiving  the  paper  from  its  customer,  never  received  the  funds. 
Surely  under  this  contract  to  credit  its  customers  with  the  amount 
of  the  paper  upon  payment,  the  bank  would  be  bound  to  give  him 
credit  when  it  was  paid  to  its  correspondent,  and  thus  become 
directly  liable  for  the  money  to  the  customer. 

Allen  V.  The  Merchants'  Bank,  22  Wend.  215,  which  established 
the  doctrine  afterwards  followed  in  New  York,  was  announced  by 
a  divided  court,  fourteen  senators  concurring  in  the  decision,  and 
ten,  with  Chancellor  Walworth,  dissenting.  The  case,  however,  has 
been  uniformly  followed  in  New  York. 

(The  court  then  distinguishes  the  case  of  Hoover  v.  Wise,  91  U.  S. 
308,  which  is  superseded  as  an  authority  on  this  point  by  Exchange 
Nat.  Bank  v.  Third  Nat.  Bank,  112  U.  S.  276,  decided  in  1884.) 

In  many  of  the  cases  above  cited  banks  were  held  not  to  be  liable 
for  the  negligence  of  notaries  to  whom  paper  was  delivered  for  pro- 
test. Undoubtedly  the  doctrines  which  would  relieve  a  bank  from 
liability  for  the  negligence  of  a  notary  would  protect  it  when  charged 
with  liability  for  the  negligent  act  of  a  correspondent. 

It  may  be  remarked  that  while  a  bank  is  not  responsible  for  the 
defaults  of  proper  and  competent  sub-agents,  it  becomes  liable  if 
negligent  in  selecting  incompetent  and  improper  agents  to  whom 
it  intrusts  paper  for  collection. 

We  are  of  the  opinion  that  the  district  court  erred  in  rendering 
a  judgment  against  defendant  upon  the  facts  before  it. 

Reversed. 


CHAP.   VIII.]        OBLIGATIONS   OF   GRATUITOUS   AGENTS.  289 

6.    Obligations  of  Gratuiiotis  Agents. 

THORNE   V.   DEAS. 
4  Johns.   (N.  Y.)   84.     1809. 

This  was  an  action  on  the  case,  for  a  nonfeasance,  in  not  causing 

insurance  to  be  made  on  a  certain  vessel,  called  the  Sea  Nymph,  on 
a  voyage  from  New  York  to  Camden,  in  North  Carolina. 

The  plaintiffs  were  co-partners  in  trade,  and  joint  owners  of  one 
moiety  of  a  brig  called  the  Sea  Nymph,  and  the  defendant  was  sole 
owner  of  the  other  moiety  of  the  same  vessel.  The  brig  sailed  in 
ballast,  the  1st  December,  1804,  on  a  voyage  to  Camden,  in  North 
Carolina,  with  William  Thorne,  one  of  the  plaintiffs,  on  board,  and 
was  to  proceed  from  that  place  to  Europe  or  the  West  Indies.  The 
plaintiffs  and  defendant  were  interested  in  the  voyage,  in  proportion 
to  their  respective  interests  in  the  vessel.  On  the  day  the  vessel 
sailed,  a  conversation  took  place  between  William  Thorne  and  the 
defendant,  relative  to  the  insurance  of  the  vessel,  in  which  W.  Thome 
requested  the  defendant  that  insurance  might  be  made;  to  which 
the  defendant  replied,  "that  he  (Thome)  might  make  himself  per- 
fectly easy  on  the  subject,  for  that  the  same  should  be  done."  About 
ten  days  after  the  departure  of  the  vessel  on  her  voyage,  the  defend- 
ant said  to  Daniel  Thome,  one  of  the  plaintiffs,  "  Well,  we  have 
saved  the  insurance  on  the  brig."  D.  Thome  asked,  "  How  so  ?  or 
whether  the  defendant  had  heard  of  her  arrival?"  To  which  the 
defendant  answered,  "  No ;  but  that,  from  the  winds,  he  presumed 
that  she  had  arrived,  and  that  he  had  not  yet  effected  any  insurance." 
On  this,  D.  Thome  expressed  his  surprise,  and  observed,  "  that  he 
supposed  that  the  insurance  had  been  effected  immediately,  by  the 
defendant,  according  to  his  promise,  otherwise,  he  would  have  had  it 
done  himself;  and  that,  if  the  defendant  would  not  have  the  insur- 
ance immediately  made,  he  would  have  it  effected."  The  defendant 
replied,  that  "he  (D.  Thome)  might  make  himself  easy,  for  he 
would  that  day  apply  to  the  insurance  offices,  and  have  it  done." 

The  vessel  was  wrecked  on  the  21st  December,  on  the  coast  of 
North  Carolina.  No  insurance  had  been  effected.  No  abandonment 
was  made  to  the  defendant  by  the  plaintiffs. 

The  defendant  moved  for  a  nonsuit  on  the  ground  that  the  promise 
was  without  consideration  and  void;  and  that,  if  the  promise  was 
binding,  the  plaintiffs  could  not  recover,  without  a  previous  abandon- 
ment to  the  defendant.    These  points  were  reserved  by  the  judge. 

A  verdict  was  taken  for  the  plaintiffs,  for  one-half  of  the  cost  of 
the  vessel,  with  interest,  subject  to  the  opinion  of  the  court  on  the 
points  reserved. 

19 


290  THOBNE  V.  DBAS.  [CHAP.   VDH. 

'Kent,  Ch.  J.,  delivered  the  opinion  of  the  court.  The  chief 
objection  raised  to  the  right  of  recovery  in  this  case  is  the  want  of 
a  consideration  for  the  promise.  The  offer,  on  the  part  of  the  de- 
fendant, to  cause  insurance  to  be  effected,  was  perfectly  voluntary. 
Will,  then,  an  action  lie,  when  one  party  intrusts  the  performance 
of  a  business  to  another,  who  undertakes  to  do  it  gratuitously,  and 
wholly  omits  to  do  it?  If  the  party  who  makes  this  engagement, 
enters  upon  the  execution  of  the  business,  and  does  it  amiss,  through 
the  want  of  due  care,  by  which  damage  ensues  to  the  other  party, 
an  action  will  lie  for  this  misfeasance.  But  the  defendant  never 
entered  upon  the  execution  of  his  undertaking,  and  the  action  is 
brought  for  the  nonfeasance.  Sir  William  Jones,  in  his  "  Essay  on. 
the  Law  of  Bailments,"  considers  this  species  of  undertaking  to  be 
as  extensively  binding  in  the  English  law,  as  the  contract  of  man- 
datum  in  the  Eoman  law;  and  that  an  action  will  lie  for  damage 
occasioned  by  the  non-performance  of  a  promise  to  become  a  man- 
datary, though  the  promise  be  purely  gratuitous.  This  treatise 
stands  high  with  the  profession,  as  a  learned  and  classical  perform- 
ance, and  I  regret,  that,  on  this  point,  I  find  so  much  reason  to 
question  its  accuracy.  I  have  carefully  examined  all  the  authorities 
to  which  he  refers.  He  has  not  produced  a  single  adjudged  case; 
but  only  some  dicta  (and  those  equivocal)  from  the  year  books,  in 
support  of  his  opinion;  and  was  it  not  for  the  weight  which  the 
authority  of  so  respectable  a  name  imposes,  I  should  have  supposed 
the  question  too  well  settled  to  admit  of  an  argument.  (See  the 
note  to  Edwards  v.  Davis,  16  Johns.  Kep.  283.) 

A  short  review  of  the  leading  cases  will  show,  that,  by  the  common 
law,  a  mandatary,  or  one  who  undertakes  to  do  an  act  for  another, 
without  reward,  is  not  answerable  for  omitting  to  do  the  act,  and 
is  only  responsible  when  he  attempts  to  do  it,  and  does  it  amiss. 
In  other  words,  he  is  responsible  for  misfeasance,  but  not  for  non- 
feasance, even  though  special  damages  are  averred.  Those  who  are 
conversant  with  the  doctrine  of  mandatum  in  the  civil  law,  and  have 
perceived  the  equity  which  supports  it,  and  the  good  faith  which  it 
enforces,  may,  perhaps,  feel  a  portion  of  regret  that  Sir  William 
Jones  was  not  successful  in  his  attempt  to  ingraft  this  doctrine,  in 
all  its  extent,  into  the  English  law.  I  have  no  doubt  of  the  perfect 
justice  of  the  Eoman  rule,  on  the  ground,  that  good  faith  ought  to 
be  observed,  because  the  employer,  placing  reliance  upon  that  good 
faith  in  the  mandatary,  was  thereby  prevented  from  doing  the  act 
himself,  or  employing  another  to  do  it.  This  is  the  reason  which 
is  given  in  the  Institutes  for  the  rule:  Mandatum  non  suscipere 
cuilibet  liberum  est;  susceptum  autem  consummandum  est,  aut 
quam  primum  renunciandum,  ut  per  semetipsum  aut  per  alium, 
eandem  rem  mandator  exequatur.  (Inst.  lib.  3.  27.  11.)  But  there 
are  many  rights  of  moral  obligation  which  civil  laws  do  not  enforce. 


CHAP.   VIII.]        OBLIGATIONS  OF  GRATUITOUS  AGENTS.  291 

and  are,  therefore,  left  to  the  conscience  of  the  individual  as  rights 
of  imperfect  obligation;  and  the  promise  before  us  seems  to  have 
been  so  left  by  the  common  law,  which  we  cannot  alter,  and  which 
we  are  bound  to  pronounce. 

The  earliest  case  on  this  subject  is  that  of  Watson  v.  Brinth, 
Year  Book,  2  Hen.  IV.  3  b,  in  which  it  appears  that  the  defendant 
promised  to  repair  certain  houses  of  the  plaintiff  and  had  neglected 
to  do  it,  to  his  damage.  The  plaintiff  was  nonsuited,  because  he 
had  shown  no  covenant;  and  Brincheley  said,  that  if  the  plaintiff 
had  counted  that  the  thing  had  been  commenced^  and  afterwards, 
by  negligence,  nothing  done,  it  had  been  otherwise.  Here  the  court, 
at  once,  took  the  distinction  between  nonfeasance  and  misfeasance. 
No  consideration  was  stated,  and  the  court  required  a  covenant  to 
bind  the  party. 

In  the  next  case,  11  Hen.  IV.  33  a,  an  action  was  brought  against 
a  carpenter,  stating  that  he  had  undertaken  to  build  a  house  for 
the  plaintiff,  within  a  certain  time,  and  had  not  done  it.  The 
plaintiff  was  also  nonsuited,  because  the  undertaking  was  not  binding 
without  a  specialty ;  but,  says  the  case,  if  he  had  undertaken  to  build 
the  house,  and  had  done  it  illy  or  negligently,  an  action  would  have 
lain,  without  deed.  Brooke,  Action  sur  le  Case,  pi.  40,  in  citing  the 
above  case,  says,  that  "  it  seems  to  be  good  law  to  this  day ;  wherefore 
the  action  upon  the  case  which  shall  be  brought  upon  the  assumption, 
must  state  that  for  such  a  sum  of  money  to  him  paid,  etc.,  and  that 
in  the  above  case,  it  is  assumed,  that  there  was  no  sum  of  money, 
therefore  it  was  a  nudum  pactum" 

The  case  of  3  Hen.  VI.  36  b,  is  one  referred  to,  in  the  "  Essay 
on  Bailments,"  as  containing  the  opinion  of  some  of  the  judges, 
that  such  an  action  as  the  present  could  be  maintained.  It  was 
an  action  against  Watkins,  a  mill-wright,  for  not  building  a  mill 
according  to  promise.  There  was  no  decision  upon  the  question, 
and  in  the  long  conversation  between  the  counsel  and  the  court 
there  was  some  difference  of  opinion  on  the  point.  The  counsel  for 
the  defendant  contended  that  a  consideration  ought  to  have  been 
stated;  and  of  the  three  judges  who  expressed  any  opinion,  one  con- 
curred with  the  counsel  for  the  defendant,  and  another,  Babington, 
Ch.  J.,  was  in  favor  of  the  action,  but  he  said  nothing  expressly  about 
the  point  of  consideration,  and  the  third,  Cokain,  J.,  said,  it  appeared 
to  him  that  the  plaintiff  had  so  declared,  for  it  shall  not  be  intended 
that  the  defendant  would  build  the  mill  for  nothing.  So  far  is 
this  case  from  giving  countenance  to  the  present  action,  that  Brooke, 
Action  sur  le  Case,  pi.  7,  and  Contract,  pi.  6,  considered  it  as  con- 
taining the  opinion  of  the  court  that  the  plaintiffs  ought  to  have 
set  forth  what  the  miller  was  to  have  for  his  labor,  for  otherwise 
it  was  a  ^lude  pact;  and  in  Coggs  v.  Bernard,  2  Ld.  Ray.  909,  Mr. 
Justice  Gould  gave  the  same  exposition  of  the  case. 


292  THORNE  V.   DEAS.  [CHAP.    VIII. 

The  general  question  whether  assumpsit  would  lie  for  a  non- 
feasance, agitated  the  courts  in  a  variety  of  cases,  afterwards,  down 
to  the  time  of  Hen.  VII.  14  Hen.  VI.  18  b,  pi.  58 ;  19  Hen.  VI. 
49  a,  pi.  5;  20  Hen.  VI.  34  a,  pi.  4;  2  Hen.  VII.  11,  pi.  9;  21  Hen. 
VII.  41  a,  pi.  66.  There  was  no  dispute  or  doubt,  but  that  an  action 
upon  the  case  lay  for  a  misfeasance  in  the  breach  of  a  trust  under- 
taken voluntarily.  The  point  in  controversy  was,  whether  an  action 
upon  the  case  lay  for  a  nonfeasance,  or  non-performance  of  an  agree- 
ment, and  whether  there  was  any  remedy  where  the  party  had  not 
secured  himself  by  a  covenant  or  specialty.  But  none  of  these  cases, 
nor,  as  far  as  I  can  discover,  do  any  of  the  dicta  of  the  judges  in 
them,  go  so  far  as  to  say,  that  an  assumpsit  would  lie  for  the  non- 
performance of  a  promise,  without  stating  a  consideration  for  the 
promise.  And  when,  at  last,  an  action  upon  the  case  for  the  non- 
performance of  an  undertaking  came  to  be  established,  the  necessity 
of  showing  a  consideration  was  explicitly  avowed. 

Sir  William  Jones  says,  that  "a  case  in  Brooke,  made  complete 
from  the  Year  Book  to  which  he  refers,  seems  directly  in  point." 
The  case  referred  to  is  21  Hen.  VII.  41,  and  it  is  given  as  a  loose 
note  of  the  reporter.  The  chief  justice  is  there  made  to  say,  that 
if  one  agree  with  me  to  build  a  house  by  such  a  day,  and  he  does 
not  build  it,  I  have  an  action  on  the  case  for  this  nonfeasance, 
equally  as  if  he  had  done  it  amiss.  Nothing  is  here  said  about 
a  consideration;  but  in  the  next  instance  which  the  judge  gives  of 
a  nonfeasance  for  which  an  action  on  the  case  lies,  he  states  a  con- 
sideration paid.  This  case,  however,  is  better  reported  in  Keilway, 
78,  pi.  5,  and  this  last  report  must  have  been  overlooked  by  the 
author  of  the  "  Essay."  Frowicke,  Ch.  J.,  there  says,  "  that  if  I 
covenant  with  a  carpenter  to  build  a  house,  and  pay  him  £20  to 
build  the  house  by  a  certain  day,  and  he  does  not  do  it,  I  have  a 
good  action  upon  the  case,  by  reason  of  the  payment  of  my  money; 
and  without  payment  of  the  money  in  this  case,  no  remedy.  And 
yet,  if  he  make  the  house  in  a  bad  manner  an  rction  upon  the  case 
lies;  and  so  for  the  nonfeasance,  if  the  money  he  paid,  action  upon 
the  case  lies." 

There  is,  then,  no  just  reason  to  infer,  from  the  ancient  authori- 
ties, that  such  a  promise  as  the  one  before  us  is  good,  without  showing 
a  consideration.  The  whole  current  of  the  decisions  runs  the  other 
way,  and,  from  the  time  of  Henry  VII.  to  this  time,  the  same  law 
has  been  uniformly  maintained. 

The  doctrine  on  this  subject,  in  the  "  Essay  on  Bailments,"  is  true, 
in  reference  to  the  civil  law,  but  is  totally  unfounded  in  reference 
to  the  English  law;  and  to  those  who  haVe  attentively  examined 
the  head  of  Mandates,  in  that  essay,  I  hazard  nothing  in  assert- 
ing that  that  part  of  the  treatise  appears  to  be  hastily  and 
loosely  written.    It  does  not  discriminate  well  between  the  cases;  it 


CHAP.   VIII.]        OBLIGATIONS   OF  GRATUITOUS   AGENTS.  293 

is  not  very  profound  in  research,  and  is  destitute  of  true  legal 
precision. 

But  the  counsel  for  the  plaintiffs  contended  that  if  the  general 
rule  of  the  common  law  was  against  the  action,  this  was  a  commercial 
question,  arising  on  a  subject  of  insurance,  as  to  which  a  different 
rule  had  been  adopted.  The  case  of  Wilkinson  v.  Coverdale,  1  Esp. 
Rep.  75,  was  upon  a  promise  to  cause  a  house  to  be  insured,  and  Lord 
Kenyon  held  that  the  defendant  was  answerable  only  upon  the 
ground  that  he  had  proceeded  to  execute  the  trust,  and  had  done 
it  negligently.  The  distinction,  therefore,  if  any  exists,  must  be 
confined  to  cases  of  marine  insurance.  In  Smith  v.  Lascelles,  2 
Term  Eep.  188,  Mr.  Justice  Buller  said  it  was  settled  law,  that 
there  were  three  cases  in  which  a  merchant,  in  England,  was  bound 
to  insure  for  his  correspondent  abroad. 

1.  Where  the  merchant  abroad  has  effects  in  the  hands  of  his 
correspondent  in  England,  and  he  orders  him  to  insure. 

2.  Where  he  has  no  effects,  but,  from  the  course  of  dealing  be- 
tween them,  the  one  has  been  used  to  send  orders  for  insurance,  and 
the  other  to  obey  them. 

3.  Where  the  merchant  abroad  sends  bills  of  lading  to  his  cor- 
respondent in  England,  and  engrafts  on  them  an  order  to  insure, 
as  the  implied  condition  of  acceptance,  and  the  other  accepts. 

The  case  itself,  which  gave  rise  to  these  observations,  and  the  two 
cases  referred  to  in  the  note  to  the  report,  were  all  instances  of 
misfeasance,  in  proceeding  to  execute  the  trust,  and  in  not  executing 
it  well.  But  I  shall  not  question  the  application  of  this  rule,  as 
stated  by  Buller,  to  cases  of  nonfeasance,  for  so  it  seems  to  have  been 
applied  in  Webster  v.  De  Tastet,  7  Term  Eep.  157.  They  have, 
however,  no  application  to  the  present  case.  The  defendant  here  was 
not  a  factor  or  agent  to  the  plaintiffs,  within  the  purview  of  the 
law-merchant.  There  is  no  color  for  such  a  suggestion.  A  factor, 
or  commercial  agent,  is  employed  by  merchants  to  transact  business 
abroad,  and  for  which  he  is  entitled  to  a  commission  or  allowance. 
Malyne  81 ;  Beawes  44.  In  every  instance  given,  of  the  responsi- 
bility of  an  agent  for  not  insuring,  the  agent  answered  to  the  defini- 
tion given  of  a  factor  who  transacted  business  for  his  principal, 
who  was  absent,  or  resided  abroad;  and  there  were  special  circum- 
stances in  each  of  these  cases,  from  which  the  agent  was  to  be 
charged;  .but  none  of  those  circumstances  exist  in  this  case.  If 
the  defendant  had  been  a  broker,  whose  business  it  was  to  procure 
insurances  for  others,  upon  a  regular  commission,  the  case  might, 
possibly,  have  been  different.  I  mean  not  to  say  that  a  factor  or 
commercial  agent  cannot  exist,  if  he  and  his  principal  reside  together 
at  the  same  time,  in  the  same  place;  but  there  is  nothing  here  from 
which  to  infer  that  the  defendant  was  a  factor,  unless  it  be  the 
business  he  assumed  to  perform,  viz.,  to  procure  the  insurance  of 


294  SHIELLS   V.   BLACKBURNE.  [CHAP.   VHI. 

a  vessel,  and  that  fact  alone  will  not  make  him  a  factor.  Every 
person  who  undertakes  to  do  any  specific  act,  relating  to  any  subject 
of  a  commercial  nature,  would  equally  become,  quoad  hoc,  a  factor; 
a  proposition  too  extravagant  to  be  maintained.  It  is  very  clear, 
from  this  case,  that  the  defendant  undertook  to  have  the  insurance 
effected,  as  a  voluntary  and  gratuitous  act,  without  the  least  idea 
of  entitling  himself  to  a  commission  for  doing  it.  He  had  an  equal 
interest  in  the  vessel  with  the  plaintiffs,  and  what  he  undertook  to 
do  was  as  much  for  his  own  benefit  as  theirs.  It  might  as  well  be 
said  that,  whenever  one  partner  promises  his  co-partner  to  do  any 
particular  act  for  the  common  benefit,  he  becomes,  in  that  instance, 
a  factor  to  his  co-partner,  and  entitled  to  a  conmiission.  The  plain- 
tiffs have,  then,  failed  in  their  attempt  to  bring  this  case  within  the 
range  of  the  decisions,  or  within  any  principle  which  gives  an  action 
against  a  commercial  agent,  who  neglects  to  insure  for  his  corre- 
spondent. Upon  the  whole  view  of  this  case,  therefore,  we  are  of 
opinion,  that  the  defendant  is  entitled  to  judgment. 

Judgment  for  the  defendant.^ 


SHIELLS   V.   BLACKBUENE. 

1  H.  Bl.  (C.  P.)   159.     1789. 

Action  to  recover  the  value  of  leather  wrongly  entered  by  de- 
fendant at  the  custom  house  and  seized  by  the  government.  De- 
fendant, who  was  entering  his  own  leather,  gratuitously  undertook 
to  enter  plaintiff's  also,  and  entered  both  parcels  under  the 
denomination  of  "  wrought  leather "  instead  of  "  dressed  leather." 
Both  were  seized  and  forfeited  for  this  error.    Verdict  for  plaintiff. 

A  rule  was  obtained  to  show  cause  why  the  verdict  should  not  be 
set  aside,  and  a  new  trial  granted,  on  the  ground  that  the  defendant 
not  professing  the  business  of  entering  goods  at  the  custom  house, 
having  undertaken  to  enter  those  in  question  without  reward,  and 
having  taken  the  same  care  of  them  as  of  his  own,  was  not  liable  for 
the  loss. 

Lord  Loughborough. ^  I  agree  with  Sir  William  Jones,  that 
where  a  bailee  undertakes  to  perform  a  gratuitous  act,  from  which 
the  bailor  alone  is  to  receive  benefit,  there  the  bailee  is  only  liable 
for  gross  negligence;  but  if  a  man  gratuitously  undertakes  to  do 
a  thing  to  the  best  of  his  skill,  where  his  situation  or  profession  is 

*  Defendant  gratuitously  undertook  to  effect  new  Insurance  on  plaintiff's  prop- 
erty and  to  give  notice  to  prior  Insurer.  He  effected  the  Insurance  but  failed  to  give 
the  notice  and  plaintiff  suffered  loss  thereby.  Held,  as  defendant  had  entered  on 
performance  he  was  liable  for  negligence  as  to  what  was  unfulfilled.  Baxter  &  Co. 
V.  Jones,  6  Ont.  L.  R.  360. 

"  The  concurring  opinions  of  Heath,  J.,  and  Wilson,  J.,  are  omitted. 


CHAP.   VIII.J        OBLIGATIONS   OF   GRATUITOUS   AGENTS.  295 

Buch  as  to  imply  skill,  an  omission  of  that  skill  is  imputable  to  him 
as  gross  negligence.  If  in  this  ease  a  ship-broker,  or  a  clerk  in  the 
custom  house,  had  undertaken  to  enter  the  goods,  a  wrong  entry 
in  them  would  be  gross  negligence,  because  their  situation  and 
employment  necessarily  imply  a  competent  degree  of  knowledge 
in  making  such  entries;  but  when  an  application,  under  the  cir- 
cumstances of  this  case,  is  made  to  a  general  merchant  to  make  an 
entry  at  the  custom  house,  such  a  mistake  as  this  is  not  to  be  imputed 
to  him  as  gross  negligence. 

Ride  absolute  for  new  trial.^ 


DELANO   V.   CASE. 
121  HI.  247.     1887. 

Mr.  Justice  Scholfield  delivered  the  opinion  of  the  court. 

This  was  case,  in  the  circuit  court  of  Macoupin  County,  by  a 
general  depositor  in  a  bank,  against  directors  of  the  bank,  for  negli- 
gence in  permitting  it  to  be  held  out  to  the  public  as  solvent,  when 
in  fact  it  was,  at  the  time,  insolvent.  Judgment  was  rendered  for 
the  plaintiff  in  that  court,  and  that  judgment  was  affirmed,  on  appeal 
to  the  Appellate  Court  for  the  Third  District,  and  this  appeal  is 
from  that  judgment. 

The  Appellate  Court,  in  its  opinion  filed  on  rendering  that  judg- 
ment, holds,  first,  that  the  directors  of  a  bank  are  trustees  for  de- 
positors as  well  as  for  stockholders;  second,  that  they  are  bound  to 
the  observance  of  ordinary  care  and  diligence,  and  are  hence  liable 
for  injuries  resulting  from  their  non-observance ;  and  third,  that  the 
present  appellants  did  not  observe  that  degree  of  care  and  diligence, 
and,  in  consequence  thereof,  appellee  sustained  the  damages  for  which 
the  judgment  was  rendered.    Delano  et  al.  v.  Case,  17  Bradw.  531. 

The  last  proposition  we  are  relieved  from  inquiring  into,  since 
there  was  evidence  tending  (though,  it  may  be,  but  slightly)  to  sus- 
tain it. 

The  propositions  of  law,  as  above  stated,  are,  in  our  opinions,  free 
of  objection  and  sustained  by  authority.  Percy  et  al  v.  Millandon, 
3  La.  568;  United  Society  of  Shakers  v.  Underwood,  9  Bush,  609; 
Morse  on  Banks  and  Banking  (2d  ed.,  133;  Thompson  on  Liability 
of  Officers  and  Agents,  395;  Shea  v.  Mabry,  1  Lea  (Tenn.),  319; 
Hodges  V.  New  England  Screw  Co.,  1  K.  I.  312 ;  Wharton  on  Negli- 
gence, sec.  510. 

The  judgment  is  affirmed.  Judgment  affirmed. 

1  See  Stanton  v.  Bell,  2  Hawks  (N.  C.)  145;  Grant  v.  Ludlow's  Adm'r,  8  Oh. 
St.  1 ;  Williams  v.  HIggins,  30  Md.  404. 


296  ISHAM,   TRUSTEE,   V.    POST,   ADMINISTRATRIX.       [CHAP.    VIII. 

ISHAM,  Trustee,  v.  POST,  Administratrix. 

141  N.  Y.  100.     1894. 

Action  to  recover  $25,000  placed  in  defendant's  hands  by  plaintiff 
to  be  loaned.    Judgment  for  plaintiff.    Defendant  appeals. 

Finch,  J.  The  relation  between  the  parties  to  this  controversy 
must  be  regarded  as  that  of  principal  and  agent.  Post  was  a  banker, 
—  not  a  member  of  the  Stock  Exchange,  and  so  bound  by  its  rules, 
but  familiar  with  its  customs  and  usages,  and  controlled  by  them  to 
some  extent  whenever  dealing  with  stocks  in  the  Wall  Street  market. 
He  held  himself  out  to  the  business  world  in  that  character.  By  his 
circulars  he  advertised  himself  as  dealing  in  "  choice  stocks,"  and 
promised  his  customers  "careful  attention"  in  all  their  financial  trans- 
actions. Those  who  dealt  with  him  contracted  for,  and  had  a  right 
to  expect,  a  degree  of  care  commensurate  with  the  importance  and 
risks  of  the  business  to  be  done,  and  a  skill  and  capacity  adequate  to 
its  performance.  That  care  and  skill  is  such  as  should  characterize 
a  banker  operating  for  others  in  a  financial  centre,  and  different  in 
kind  from  the  ordinary  diligence  and  capacity  of  the  ordinary  citizen. 
The  banker  is  employed  exactly  for  that  reason.  Without  it  there 
might  cease  to  be  motives  for  employing  him  at  all. 

Isham  was  the  trustee  of  an  express  trust,  but  in  this  dispute  must 
be  regarded  simply  as  an  individual,  and  without  reference  to  his 
trust  character;  for  the  trial  court  has  found  as  a  fact  that,  in  em- 
ploying the  banker  to  loan  for  him  $25,000,  he  gave  no  notice  of  the 
trust  character  attaching  to  the  money,  contracted  apparently  for 
himself,  and  left  Post  to  believe,  and  be  justified  in  believing,  that 
the  money  was  his  own.  The  evidence  on  the  subject  admits  of  some 
difference  of  opinion,  but  on  this  appeal  the  finding  must  control. 

In  the  same  way  the  question  whether  Post's  services  in  making 
the  loan  were  or  were  not  to  be  gratuitous  must  be  deemed  settled. 
The  finding  is  that  those  services  were  to  be  without  compensation; 
and  on  that  ground  the  appellant  claims  that  Post  was  a  gratuitous 
mandatary,  and  liable  only  for  gross  negligence.  But,  while  no  com- 
pensation as  such  was  to  be  paid,  it  does  not  follow  that  the  banker 
was  freed  from  the  obligation  of  such  diligence  as  he  had  promised 
to  those  who  dealt  with  him,  or  was  at  liberty  to  withhold  from  his 
agency  the  exercise  of  the  skill  and  knowledge  which  he  held  himself 
out  to  possess.  Nothing  in  general  is  more  unsatisfactory  than 
attempts  to  define  and  formulate  the  different  degrees  of  negligence; 
but  even  where  the  neglect  which  charges  the  mandatary  is  described 
as  "  gross,"  it  is  still  true  that  if  his  situation  or  employment  implies 
ordinary  skill  or  knowledge  adequate  to  the  undertaking,  he  will  be 
responsible  for  any  losses  or  injuries  resulting  from  the  want  of  the 


CHAP.   VIII.]        OBLIGATIONS  OF  GRATUITOUS  AGENTS.  297 

exercise  of  such  skill  or  knowledge.  Story  on  Bailments,  §  182  a ; 
Shiells  V.  Blackburne,  1  H.  Black.  158;  Foster  v.  Essex  Bank,  17 
Mass.  479 ;  First  Nat.  Bank  v.  Ocean  Nat.  Bank,  60  N.  Y.  278.  In 
the  latter  case  it  was  said  that  ordinary  care  as  well  as  gross  negli- 
gence, the  one  being  in  contrast  with  the  other,  must  be  graded  by 
the  nature  and  value  of  the  property,  and  the  risks  to  which  it  is 
exposed.  Post,  therefore,  was  required  to  exercise  the  skill  and 
knowledge  of  a  banker  engaged  in  loaning  money  for  himself  and 
for  his  customers,  because  of  the  peculiar  character  and  scope  of  his 
agency,  because  of  his  promise  of  careful  attention,  and  because  the 
contract  was  made  in  reliance  upon  his  business  character  and  skill. 

We  should  next  consider  upon  whom  rested  the  burden  of  proof. 
The  plaintiff  alleged  and  proved  that  he  put  into  Posf  s  hands,  as 
his  banker  and  agent,  to  be  loaned  upon  demand  at  the  high  rates 
of  interest  prevailing,  and  in  the  mode  approved  by  custom  and  usage, 
the  surn  of  $25,000,  which  sum  Post  had  not  returned,  but  refused 
to  return  upon  proper  demand,  and  so  had  converted  the  same  to 
his  own  use.  That  made  out  plaintiff's  case.  Judgment  for  him 
must  necessarily  follow,  unless  Post,  in  answer,  has  established  an 
affirmative  defence.  That  which  he  pleaded  and  sought  to  prove  was 
that  the  money  was  lost  without  his  fault  and  through  an  event  for 
which  he  was  altogether  blameless.  In  other  words,  he  was  bound 
to  show  that  he  did  his  duty  fully  and  faithfully,  and  without  negli- 
gence or  misconduct,  so  that  the  resultant  loss  was  not  his,  but  must 
justly  fall  upon  the  plaintiff.  Marwin  v.  Brooks,  94  N.  Y.  71 ;  Ouder- 
kirk  V.  C.  N.  Bank,  119  Id.  263.  With  that  burden  resting  upon  him, 
we  must  examine  his  defence  and  the  evidence  given  in  its  support, 
and  determine  whether  or  not  it  is  our  duty  to  sustain  the  adverse 
conclusion,  to  reverse  which  he  brings  this  appeal. 

(The  court  then  decides  that  the  trial  court  erred  in  excluding 
certain  evidence  offered  by  the  defendant,  and  on  this  ground  reverses 
the  judgment.) 

Judgment  reversed. 


298      N.  Y.  IRON  MINE  V.  FIRST  NAT.  BK.  OF  NEGAUNEE.      [CHAP.   IX. 


PART  III. 

LEGAL  EFFECT  OF  THE  RELATION  AS  BETWEEN  THE 
PEINCIPAL   AND   THIRD   PARTIES. 

CHAPTER    IX. 

CONTEACT    OF   AOENT    IN    BeHALF    OF   A   DiSCLOSED   PRINCIPAL. 

1.     General  Doctrine. 

NEW   YORK   IRON   MINE   v.   FIRST   NATIONAL 
BANK   OF   NEGAUNEE. 

39  Mich.  644.     1878. 

CooLET,  J.  The  plaintiff  in  error  is  sued  as  maker  of  three  prom- 
issory notes  ^  and  endorser  of  a  fourth.^  ...  By  reference  to  these 
notes  it  will  be  seen  that  the  name  of  plaintiff  in  error  is  subscribed 
or  endorsed  by  W.  L.  Wetmore,  and  the  contest  has  been  made  over 
his  authority  to  make  use  of  the  name  of  plaintiff  in  error  as  he  has 
done.  The  New  York  Mine  is  a  corporation,  having  its  place  of 
operations  at  Ishpeming  in  this  state.  It  was  organized  some  four- 
teen years  ago,  with  Samuel  J.  Tilden  and  William  L.  Wetmore 
as  corporators.  Mr.  Tilden  has  had  the  principal  interest  from  the 
first,  and  has  always  acted  as  president  and  treasurer,  keeping  his 
office  in  New  York  City.  Mr.  Wetmore  has  always,  until  this  con- 
troversy arose,  acted  as  general  agent  with  his  office  at  Ishpeming. 
The  board  of  direction  has  been  made  up  of  these  gentlemen  with  some 
nominal  holders  of  stock  in  New  York  City  as  associates.  Meetings 
of  the  board  appear  to  have  been  held  very  seldom,  and  the  whole 
business  of  the  company  has  been  done  by  Mr.  Wetmore  and  Mr. 
Tilden,  the  latter  looking  after  the  finances,  and  visiting  Ishpeming 
only  twice  or  three  times  during  the  whole  period  of  the  corporate 
existence.  Mr.  Wetmore  hired  and  paid  all  the  miners  and  other 
laborers,  and  transacted  such  other  business  as  is  usually  taken 
charge  of  by  a  general  agent  whose  principal  is  at  a  distance.  As 
such  agent  he  has  paid  out  in  all  upwards  of  $3,000,000,  the  pay- 

•  All  three  notes  were  made  payable  "  to  the  order  of  Wetmore  &  Bro.,"  signed 
*•  New  York  Iron  Mine.     By  W.  L.  Wetmore,"  and  endorsed,  "  Wetmore  &  Bro." 

*  By  this  note  the  "  Munising  Iron  Company  "  promised  to  pay  "  to  the  order  of 
New  York  Iron  Mine "  ;  It  was  signed  "  E.  P.  Williams,  Secretary,"  and  "  W.  L. 
Wetmore,  President,"  and  endorsed  "  New  York  Iron  Mine.    By  W.  L.  Wetmore." 


CHAP.   LX.]  GENERAL  DOCTEINE.  •  299 

ments  being  generally  made  in  drafts  on  Mr.  Tilden,  or  in  the 
proceeds  of  such  drafts.  For  a  while  the  drafts  were  on  time,  but 
latterly  the  financial  condition  of  the  corporation  has  been  easy, 
and  only  sight  drafts  have  been  drawn.  The  firm  of  Wetmore  &  Bro. 
named  in  the  three  notes  purporting  to  be  made  by  the  New  York 
Mine,  was  composed  of  William  L.  and  F.  P.  Wetmore,  and  there 
was  evidence  that  the  New  York  Mine  had  had  business  transactions 
with  that  firm  to  the  amount  in  all  of  $125,000.  The  Munising 
Iron  Company  was  a  corporation  of  which  W.  L.  Wetmore,  as  its 
note  shows,  was  the  president. 

It  was  not  claimed  on  the  trial  that  there  had  ever  been  any 
corporate  action  expressly  empowering  Wetmore  as  general  agent 
to  make  promissory  notes,  nor  did  it  appear  that  he  had  ever  exe- 
cuted any  in  its  name  except  a  few  as  hereinafter  stated.  Some 
evidence  was  put  in  which  it  was  claimed  had  a  tendency  to  show  the 
existence  of  a  general  custom  in  the  mining  region  for  the  general 
agents  of  mining  companies  to  make  promissory,  notes  in  the  names 
of  their  principals  without  special  authorization,  but  as  there  was 
no  showing  that  authority  was  not  generally  given,  the  attempt  was 
a  manifest  failure.  It  was  also  insisted  on  the  part  of  the  plaintiff 
that  as  matter  of  law,  the  general  agent  of  a  mining  corporation  by 
virtue  of  his  appointment  as  such  had  authority  to  bind  it  by  com- 
mercial paper,  and  that  the  court  must  take  notice  of  his  authority, 
as  they  must  of  the  authority  of  the  cashier  of  a  bank,  the  master 
of  a  vessel,  or  other  known  agents.  Adams  Mining  Co.  v.  Senter, 
26  Mich.  73,  76.  On  the  other  hand  the  defence  contended  that 
the  authority  to  issue  commercial  paper  was  not  implied  in  any 
general  agency,  and  when  conferred  must  be  strictly  construed,  and 
in  its  exercise  strictly  limited  to  its  exact  terms;  and  that  an 
authority  to  draw  bills  would  not  authorize  the  making  of  notes. 
And  it  was  further  contended  that  even  if  authority  to  make  notes 
was  implied,  the  particular  notes  in  suit  were  presumptively  not 
within  the  authority;  three  of  them  being  drawn  by  Wetmore  as 
agent,  payable  to  the  order  of  a  partnership  of  which  he  was  one 
of  the  members,  and  prima  facie  for  the  benefit  of  that  partnership, 
while  the  other  like  these  was  made  by  Wetmore  in  one  capacity  and 
endorsed  by  him  in  another,  so  that  apparently  he  was  dealing  with 
himself  in  making  and  negotiating  all  of  them. 

It  was  not  disputed  by  the  defence  that  the  corporation  as  such 
had  power  to  make  the  notes  in  suit.  The  question  was  whether  it 
had  in  any  manner  delegated  that  power  to  Wetmore.  We  cannot 
agree  with  the  plaintiff  that  the  mere  appointment  of  general  agent 
confers  any  such  power.  White  v.  Westport  Cotton  Manf'g  Co., 
1  Pick.  215,  is  not  an  authority  for  that  position,  nor  is  any  other 
case  to  which  our  attention  has  been  invited.  In  McCuUough  v. 
Moss,  5  Denio,  567,  the  subject  received  careful  attention,  and  it 


300      N.  Y.  IRON  MINE  V.  FIRST  NAT.  BK.  OF  NEGAUNEE.      [CHAP.   IX. 

was  held  that  the  president  and  secretary  of  a  mining  company, 
without  being  authorized  by  the  board  of  directors  so  to  do,  could  not 
bind  the  corporation  by  a  note  made  in  its  name.  Murray  v.  East 
India  Co.,  5  B.  &  Aid.  204;  Benedict  v.  Lansing,  5  Denio,  283; 
and  The  Floyd  Acceptances,  7  Wall.  666,  are  authorities  in  support 
of  the  same  view.  The  plaintiff,  then,  cannot  rest  its  case  on  the 
implied  authority  of  the  general  agent;  the  issuing  of  promissory 
notes  is  not  a  power  necessarily  incident  to  the  conduct  of  the 
business  of  mining,  and  it  is  so  susceptible  of  abuse  to  the  injury, 
and  indeed  to  the  utter  destruction  of  a  corporation,  that  it  is  wisely 
left  by  the  law  to  be  conferred  or  not  as  the  prudence  of  the  board 
of  direction  may  determine. 

But  it  was  further  insisted  on  the  part  of  the  plaintiff  that  though 
Wetmore  may  never  have  had  the  corporate  authority  to  make  notes 
in  the  corporate  name,  yet  that  the  course  of  business  was  such, 
with  the  express  or  implied  assent  of  Mr.  Tilden,  as  to  lead  the 
public  to  suppose  that  his  authority  was  ample,  and  that  this  course 
of  business  should  be  conclusive  in  favor  of  those  who  had  taken  the 
notes  in  good  faith  relying  upon  it.  In  support  of  this  position 
evidence  was  given  that  Wetmore  was  in  the  practice  of  taking  notes 
from  the  creditors  of  the  corporation,  and  procuring  them  to  be 
discounted  on  his  indorsement  as  general  agent;  and  it  appeared 
that  the  note  of  $1,000  counted  on  in  this  case  was  made  for  a 
balance  remaining  unpaid  on  a  much  larger  note  made  by  the 
Munising  Iron  Company  payable  to  the  order  of  defendant  and  dis- 
counted by  the  plaintiff.  And  on  this  part  of  the  case  we  are  of 
opinion  that  enough  appeared  to  warrant  the  jury  in  finding  that 
this  practice  of  Wetmore  to  indorse  the  paper  of  the  company  for 
collection  or  discount  was  known  to  Mr.  Tilden  and  not  objected 
to  by  him;  that  parties  taking  such  paper  had  a  right  to  believe  the 
indorsement  was  authorized,  and  that  it  was  made  in  the  interest 
of  defendant,  and  not  in  fraud  of  its  rights. 

It  was  also  shown  that  within  the  three  or  four  years  preceding 
the  commencement  of  this  suit  Wetmore  had  made  a  few  notes  in 
the  name  of  the  defendant  which  he  had  procured  to  be  discounted. 
But  it  was  not  shown  that  Mr.  Tilden  knew  of  the  making  of  any 
of  these  notes  until  a  short  time  before  this  suit  was  brought,  and 
his  evidence,  taken  on  commission,  was  offered  to  show  that  when 
the  existence  of  such  notes  first  came  to  his  knowledge,  he  took 
immediate  steps  to  remove  Mr.  Wetmore  from  his  agency,  and  to  have 
notice  given  to  the  parties  concerned  that  the  notes  were  issued 
without  any  authority  whatever,  and  would  not  be  recognized.  This 
evidence,  on  objection  for  the  plaintiff,  was  ruled  out. 

So  far  as  we  can  judge  from  this  record,  there  is  no  ground  for 
the  suggestion  that  Mr.  Tilden  had  knowledge  that  such  notes  were 
being  issued,  or  any  reason  to  suspect  that  such  was  the  fact.     It 


CHAP.   IX.]  GENERAL   DOCTRINE.  301 

seems  probable  that  Wetmore  made  the  notes  in  his  own  interest, 
or  in  the  interest  of  some  other  concern  with  which  he  was  connected, 
and  not  in  the  interest  of  the  New  York  Mine.  Nor  do  we  think 
there  was  anything  in  the  course  of  the  business  as  it  had  previously 
been  conducted  by  him  that  should  have  led  parties  to  take  such 
notes  without  inquiry.  It  had  been  customary  to  transmit  to  Mr. 
Tilden  the  bills  receivable  and  all  moneys,  and  to  draw  against  them 
in  paying  demands  against  the  company,  and  in  providing  funds 
to  meet  its  current  necessities;  but  this  was  a  suitable,  proper  and 
prudent  mode  of  doing  the  corporate  business,  and  tended  rather 
to  negative  than  to  support  the  existence  of  any  authority  in 
Wetmore  to  make  notes.  Indeed,  it  is  difficult  to  understand  how 
the  putting  out  of  notes  could  have  been  either  necessary  or  con- 
venient. Time  drafts  would  accomplish  quite  as  well  any  honest 
purpose  that  could  have  existed  for  making  them,  without  at  the 
same  time  exposing  the  corporation  to  the  same  risks;  for  the  drafts 
would  necessarily  go  forward  to  the  financial  officer  of  the  corpora- 
tion for  payment,  and  would  appear  when  paid,  in  the  corporate 
accounts,  while  the  notes,  if  fraudulently  issued,  might  be  kept  from 
that  officer's  knowledge  for  a  long  time,  perhaps  for  years,  and,  if 
the  fraud  was  successfully  carried  out,  perhaps  permanently. 

But  it  is  further  insisted  on  the  part  of  the  plaintiff  that  the 
defendant  corporation  is  chargeable  with  negligence  in  suffering 
Wetmore  to  manage  the  business  independently  as  he  did  for  so 
long  a  period,  and  that  this  negligence  was  so  gross  and  so  likely 
to  mislead  as  to  call  for  the  application  of  the  familiar  and  very 
just  principle,  that  where  one  of  two  innocent  parties  must  suffer 
from  the  dishonesty  of  a  third,  that  one  shall  bear  the  loss  who  by 
his  negligence  has  enabled  the  third  to  occasion  it.  Merchants 
Bank  v.  State  Bank,  10  Wall.  604;  Bank  of  United  States  v.  Davis, 
2  Hill,  465;  Holmes  v.  Trumper,  22  Mich.  427-434;  Farmers'  etc. 
Bank  v.  Butchers'  etc.  Bank,  16  N.  Y.  133;  Welland  Canal  Co.  v. 
Hathaway,  8  Wend.  480;  N.  Y.  &  N.  H.  E.  R.  Co.  v.  Schuyler,  34 
N.  Y.  30. 

While  the  principle  invoked  is  a  very  just  and  proper  one,  it  is 
one  that  must  be  applied  with  great  circumspection  and  caution. 
Any  person  may  be  said  to  put  another  in  a  position  to  commit  a 
fraud  when  he  confers  upon  him  any  authority  which  is  susceptible 
of  abuse  to  the  detriment  of  others;  but  if  the  authority  is  one  with 
which  it  is  proper  for  one  man  to  clothe  another,  negligence  cannot 
be  imputed  to  the  mere  act  of  giving  it.  Any  one  who  entrusts  to 
another  his  signature  to  a  written  instrument  furnishes  him  with 
a  means  of  perpetrating  a  fraud  by  an  unauthorized  alteration  or 
other  improper  use  of  it.  But  if  the  instrument  was  a  proper  and 
customary  instrument  of  business,  and  has  been  issued  without 
fraudulent  intent  in  a  business  transaction,  there  is  no  more  reason 


303      N.  Y.  IRON  MINE  V.  FIRST  NAT.  BK.  OF  NEGADNEE.      [CHAP.   IX. 

for  imposing  upon  the  maker  the  consequences  of  a  fraudulent  use 
of  it  than  there  is  for  visiting  them  upon  any  third  person.  In 
other  words,  it  is  not  the  mere  fact  that  one  has  been  the  means 
of  enabling  another  to  commit  a  fraud  that^hall  make  him  justly- 
chargeable  with  the  other's  misconduct;  but  there  must  be  that  in 
what  he  has  done  or  abstained  from  doing  that  may  fairly  be  held 
to  charge  him  with  neglect  of  duty. 

If  neglect  of  duty  is  imputed  in  this  case,  it  is  important  to  know 
in  what  it  consists.  The  argument  made  for  the  plaintiff  directs  our 
attention  to  the  following  facts : 

1.  Mr.  Tilden  and  Mr.  Wetmore  were  the  sole  corporators  having 
substantial  interests,  and,  without  any  supervision  by  Mr.  Tilden, 
Mr.  Wetmore  has  been  suffered  for  many  years  to  manage  the  busi- 
ness at  the  mine  as  he  pleased;  the  public  dealing  with  no  other 
person,  either  natural  or  artificial,  and  having  no  reason  to  suppose 
that  any  one  was  reserving  from  Mr.  Wetmore  any  authority,  or 
questioning  his  power  to  act  for  the  corporation  and  make  use  of 
its  name  and  its  credit  to  the  full  extent  that  any  one  might  use 
them  under  corporate  authority.  And  the  making  of  promissory 
notes  is  an  act  so  similar  in  all  respects  to  that  of  drawing  bills,  and 
so  likely  to  be  conferred  where  the  other  is  given,  that  one  might 
fairly  infer  its  existence  in  this  case  in  view  of  the  extensive  use 
made  by  Wetmore  of  bills  in  the  corporate  business. 

2.  Mr.  Tilden  and  Mr.  Wetmore  have  conducted  the  corporate 
business  as  if  they  were  partners ;  Mr.  Wetmore  exercising  unlimited 
authority  at  one  place  and  Mr.  Tilden  at  the  other;  and  the  public 
had  a  right  to  suppose  that  they  were  trusting  each  other  to  the  full 
extent  that  partners  do  and  must;  and  therefore  that  Mr.  Wetmore 
might  bind  himself  and  Mr.  Tilden,  —  or  what  is  the  same  thing  — 
might  bind  the  corporation,  by  notes  in  its  name. 

3.  These  views  are  strengthened  by  the  fact  that  the  corporators 
did  not  for  years  hold  corporate  meetings  or  go  through  the  ordinary 
corporate  forms  of  election,  as  they  should  have  done,  and  would 
be  expected  to  do  if  they  expected  to  insist  upon  the  application  of 
strict  rules  in  the  corporate  dealings  with  others. 

These  are  the  facts  which  are  supposed  to  have  enabled  Mr.  Wet- 
more to  impose  upon  the  public  with  an  appearance  of  authority 
which  had  not  been  conferred  upon  him.  So  far  as  the  neglect  to 
hold  corporate  meetings  or  to  go  through  corporate  forms  is  con- 
cerned, there  is  no  ground  for  making  it  cut  any  figure  in  the  case. 
It  does  not  appear  that  this  plaintiff  was  influenced  by  any  such 
neglect  or  knew  anything  about  it;  and  from  anvthing  that  appears 
their  action  would  not  have  been  affected  by  it  in  any  way.  It  is 
therefore  a  fact  entirely  foreign  to  this  controversy. 

Neither  do  we  perceive  that  the  fact  that  Tilden  and  Wetmore 
conducted  their  business   as   if   they  were  partners   concerns  this 


CHAP.   IX.]  GENERAL  DOCTRINE.  303 

plaintiff  in  any  manner.  If  Wetmore  had  dealt  with  the  plaintiff 
in  the  character  of  a  partner,  and  had  by  Mr.  Tilden's  course  been 
enabled  to  deceive  the  bank  officers  into  the  belief  that  they  were 
partners,  the  case  would  be  different.  But  the  plaintiff  has  dealt 
with  no  partnership;  the  notes  sued  upon  were  given  as  corporate 
notes,  taken  as  corporate  notes,  and  are  now  sued  upon  as  corporate 
notes.  The  plaintiff  must  therefore  make  out  a  corporate  liability; 
and  as  Wetmore  gave  the  notes  assuming  to  be  empowered  thereby 
to  pledge  the  corporate  credit,  it  is  of  no  importance  whatever  that 
perhaps  he  might  have  pledged  his  associate  as  a  partner  and  had 
attempted  to  do  so,  and  had  the  plaintiff  taken  from  him  paper  that 
purported  to  be  the  paper  of  partners.  For  the  purposes  in  this 
case  it  is  sufficient  to  say  that  it  is  not  the  case  the  pleadings  make. 

Nevertheless  the  plaintiff  is  perfectly  right  in  the  argument  that 
the  corporation  must  be  held  responsible  for  any  appearances  which 
these  two  corporators  held  out  to  the  public  whereby  the  plaintiff 
has  been  deceived  to  its  prejudice.  The  plaintiff  is  therefore  en- 
titled to  all  that  can  be  claimed  from  Mr.  Wetmore's  course  of 
business  as  general  agent,  so  far  as  it  was  known  to  Mr.  Tilden. 
Now  Mr.  Tilden  knew  that  Mr.  Wetmore  was  managing  the  business 
as  general  agent  with  little  or  no  supervision  by  any  one;  but  it 
would  be  very  dangerous  to  hold  that  this  should  charge  him  with 
Mr.  Wetmore's  frauds.  There  was  nothing  in  this  that  might  not 
happen  in  any  case  where  the  business  was  conducted  by  an  agent 
at  a  distance  from  his  principal;  say  by  an  agent  in  New  York  for 
his  principal  in  London,  or  by  an  agent  in  San  Francisco  for  a 
principal  in  one  of  the  Atlantic  cities.  Mr.  Tilden  also  knew  that 
Mr.  Wetmore  was  drawing  and  negotiating  bills  upon  him  in  the 
name  of  the  corporation;  but  this  was  a  proper  and  customary 
mode  of  dealing  as  between  principal  and  agent,  and  we  see  nothing 
in  it  calculated  to  mislead  any  one  into  the  supposition  that  Mr. 
Wetmore  was  empowered  to  do  for  the  company  any  thing  not 
customary  for  such  agents  to  do,  and  not  included  in  the  authority 
Mr.  Tilden  knew  Mr.  Wetmore  to  be  exercising. 

But  before  the  maxim  which  the  plaintiff  invokes  can  be  applied 
to  the  case,  it  is  necessary  to  determine  not  only  that  fault  is  im- 
putable to  the  defendant,  but  also  that  the  plaintiff  is  free  from 
negligence.  There  must  be  one  innocent  party  and  one  negligent 
party  before  the  requirements  of  the  maxim  are  answered;  and  the 
conduct  of  the  plaintiff  is  therefore  as  important  as  that  of  the 
defendant.  Was  the  plaintiff  in  this  case  free  from  negligence  in 
discounting  the  three  $5,000  notes?  In  law  the  officers  of  the  bank 
must  be  held  to  have  known  that  Mr.  Wetmore  had  no  right  to  make 
such  paper  without  express  authority,  and  we  look  in  vain  for  any 
evidence  that  they  demanded  proof  of  such  authority,  or  extended 
their  inquiries  beyond  the  agent  himself.    Moreover,  there  was  that 


304  8TAINER  V.   TYSEN.  [CHAP.   IX. 

on  the  face  of  these  notes  to  suggest  special  caution ;  they  were  made 
by  Mr.  Wetmore  in  one  capacity  to  himself  and  his  associate  in 
another  capacity,  and  they  indicated,  or  at  least  suggested,  an  interest 
on  his  part  in  making  them  which  was  adverse  to  the  interest  of  his 
principal. 

The  notes  also  bore  the  largest  interest  admissible  under  our 
statutes;  and  this  fact,  in  the  case  of  a  corporation  whose  credit 
was  such  that  its  paper  would  be  readily  discounted,  and  having  its 
office  in  the  city  of  New  York,  might  well  have  arrested  attention. 
We  do  not  think  that  when  the  bank  discounted  such  paper  without 
inquiry  into  the  authority  of  Wetmore,  it  gave  such  evidence  of 
prudence  and  circumspection  as  placed  it  in  position  to  complain 
of  Mr.  Tilden's  course  of  business  as  negligent.  A  fair  statement  of 
the  case  for  the  plaintiff  is  that  both  parties  have  been  overtrustful 
in  their  dealings  with  Mr,  Wetmore ;  the  defendant  not  more  so  than 
the  plaintiff.  Unfortunately  for  the  plaintiff,  the  consequences  of 
the  overtrust  have  fallen  upon  its  shoulders. 

The  circuit  judge  in  his  instructions  to  the  jury  assumed  that 
there  was  evidence  in  the  case  from  which  they  might  find  that 
Wetmore  was  held  out  to  the  public  as  possessing  the  authority  he 
assumed  to  exercise.  We  find  no  such  evidence  and  there  must 
therefore  be  a  new  trial.  The  case  of  the  $1,000  note  is  different, 
as  already  explained.  .  .  . 

The  judgment  must  be  reversed  with  costs,  and  a  new  trial 
ordered. 

The  other  Justices  concurred. 


STAINEE   V.   TYSElf. 

3  Hill  (N.  Y.)  279.     1842. 

Action  on  a  promissory  note  payable  to  the  order  of  George  W. 
Tysen  &  Co.,  by  whom  it  was  endorsed  to  the  plaintiff.  The  note 
purported  on  its  face  to  have  been  made  by  the  defendant  David  I. 
Tysen,  by  George  W.  Tysen,  his  attorney.  It  appeared  on  the  trial 
that  before  the  making  of  the  note  the  defendant  had  executed 
a  letter  of  attorney  constituting  George  W.  Tysen  his  agent,  among 
other  things,  "  to  draw  and  endorse  checks,  notes  and  bills  of  ex- 
change in  my  name."  The  note  in  question  was  given  under  the 
following  circumstances :  Prior  to  its  date,  George  W.  Tysen  —  then 
a  member  of  a  firm  styled  George  W.  Tysen  &  Co.,  which  was  largely 
indebted  to  the  plaintiff  and  insolvent  —  applied  to  the  plaintiff  in 
behalf  of  his  firm  for  a  compromise.  Terms  were  agreed  upon,  and 
George  W.  Tysen  made  and  delivered  the  note  by  way  of  perfecting 


CHAP.   IX.]  GENERAL  DOCTEINE.  303 

the  compromise.  It  was  not  pretended  that  the  defendant  was  con- 
nected with  the  firm  of  George  W.  Tysen  &  Co.;  indeed,  it  was 
expressly  admitted  by  the  plaintiff's  attorney  at  the  trial,  that  the 
note,  so  far  as  the  defendant  was  concerned,  was  given  without 
consideration.  The  plaintiff,  however,  when  he  took  it,  was  not 
apprised  in  terms  of  that  fact.  Upon  these  facts  appearing,  the 
judge  directed  the  jury  to  find  for  the  defendant  which  they  accord- 
ingly did.  The  plaintiff  excepted,  and  moved  for  a  new  trial  on 
a  bill  of  exceptions. 

By  the  court,  Cowen,  J.  The  argument  by  which  those  who  ad- 
vance money  or  discharge  debts  on  the  faith  of  paper  executed  under 
letters  of  attorney  like  this,  claim  that  the  principal  should  be  bound 
at  all  events,  is,  that  he  has  authorized  another  in  general  words  and 
without  any  qualification  to  give  his  notes.  That  having  given  such 
authority,  he  cannot  require  any  person  who  takes  under  it  to  notice 
and  decide  at  his  peril  whether  the  agent  act  in  good  faith  towards 
his  principal  or  not.  That  he  has  virtually  authorized  his  agent 
to  speak  conclusively  and  by  way  of  estoppel  as  to  all  extrinsic 
circumstances  —  all  facts  not  apparent  on  the  face  of  the  power,  or 
actually  known  to  the  man  who  trusts  to  it.  That  the  attorney,  by 
the  very  act  of  making  the  note,  etc.,  does,  in  effect,  declare  that 
it  is  available.  .  .  .  The  answer  given  to  the  argument  is,  that  such 
letters  of  attorney  import,  in  their  own  nature,  an  obligation  to  act 
for  and  in  behalf  of  the  principal  and  in  his  proper  business;  that 
the  man  who  receives  the  note  is  bound  to  look  to  the  power,  and 
in  so  doing  must  take  notice  of  its  legal  effect  at  his  peril;  that  he 
is  therefore  bound  to  see  that  the  attorney  does  not  go  beyond  his 
power  by  making  or  endorsing  notes  for  the  benefit  of  himself  or 
persons  other  than  his  principal.  The  authorities  pro  and  con  are 
cited  in  The  North  River  Bank  v.  Aymar,  3  Hill,  262. 

But  we  are  all  of  the  opinion  that  the  necessity  for  weighing  these 
arguments  does  not  exist  in  the  case  before  us.  It  cannot  be  pre- 
tended that,  where  the  person  who  takes  the  note  is  aware  of  the 
attorney  acting  fraudulently  towards  his  principal,  there  is  any  color 
for  insisting  on  the  ground  of  estoppel.  There  is  no  doubt  that 
a  power  drawn  up  nakedly  to  do  acts  for  and  in  the  name  of  the 
principal,  negatives  all  idea  of  interest  in  the  agent,  or  authority 
to  act  for  the  benefit  of  any  one  beside  the  principal.  This  limitation, 
therefore,  the  plaintiff  was  bound  to  notice.  It  is  an  intrinsic  fact, 
and  when  he  is  moreover  told  that  the  attorney,  as  between  himself 
and  principal,  is  abusing  his  trust,  the  reason  for  making  the  act 
conclusive  entirely  ceases.  The  plaintiff  himself  then  becomes  a 
party  to  the  fraud.  In  this  case,  he  must  be  presumed  to  have  known 
who  it  was  that  constituted  the  insolvent  firm  of  George  W.  Tysen 
&  Co.,  the  payees  of  the  note  —  a  firm  which  had  just  compromised 
with  him  —  and  that  this  defendant  was  therefore  not  a  member 


306  STAINER  V.  TYSEN.  [CHAP.  IX. 

of  the  firm.  Had  he  been,  there  was  no  need  of  George  acting  as 
attorney.  When  a  person  sees  the  note  of  a  stranger  made  and 
endorsed  by  one  of  the  payees  to  discharge  their  own  debt,  and  takes 
such  an  endorsement,  he  has  seen  enough,  in  connection  with  the 
power,  to  raise  a  strong  suspicion,  not  to  say  conviction,  that  the 
whole  is  a  fraud  upon  that  stranger.  It  is  too  much  to  allow  that  he 
may  shut  his  eyes  and  say,  he  supposed  there  was  some  special  cir- 
cumstances on  which  the  attorney  had  a  right  thus  to  act.  The 
transaction  is,  on  its  face,  out  of  the  ordinary  course  of  business. 
This  was  of  itself  sufficient  to  put  him  on  inquiry.  In  the  case 
of  The  North  Eiver  Bank  v.  Aymar,  supra,  it  was  assumed  that  the 
plaintiffs  were  bona  fide  holders. 

We  are  therefore  of  opinion  that  the  circuit  judge  was  right  in 
directing  a  verdict  for  the  defendant. 

New  trial  denied.^ 

»  In  Merchants',  etc.,  Nat.  Bank  v.  Ohio  Valley  Furniture  Co.,  50  S.  B.  (W.  Va.) 
880,  the  bank  sued  on  a  negotiable  promissory  note  of  the  defendant  which  It  had 
discounted  at  the  request  of  one  Huston  whom  it  knew  at  the  time  to  be  an  agent  of 
the  defendant.  On  this  occasion,  Huston  represented,  not  that  his  agency  had 
ceased,  or  that  the  paper  belonged  to  him,  but  that  he  had  secured  authority  to  use 
the  proceeds  of  the  note,  and.  In  view  of  that  situation,  he  requested  the  bank  to  take 
the  note  as  a  matter  of  personal  accommodation  to  him,  which  It  did.  In  revers- 
ing a  Judgment  for  plaintiff  and  ordering  a  new  trial,  the  court  said :  "  The 
declaration  on  the  part  of  the  holder,  after  having  admitted  the  agency,  that  he 
had  secured  the  right  to  use  the  note  for  his  own  benefit,  calls  for  the  applica- 
tion of  another  principle  of  the  law  of  agency,  which  Is  a  limitation  Imposed  by 
law  upon  the  power  of  every  agent,  general  or  special,  of  which  all  persons  must 
take  notice,  namely,  that  an  agent  has  no  power  to  use  his  oflSce  otherwise  than 
for  the  benefit  of  his  principal.  When  he  undertakes  to  exercise  it  for  a  purpose 
which  can  in  no  way  benefit  his  principal,  but  will  benefit  himself  or  some  third  per- 
son, he  places  himself  in  a  position  In  which  the  law  determines  that  he  Is  outside  of 
the  scope  of  his  agency,  and  the  person  who  deals  with  him  in  such  position  will  not 
be  heard  to  say  he  was  In  ignorance  of  the  want  of  authority,  for  ignorance  of 
law  excuses  no  man.  It  is  of  the  very  essence  of  an  agency  that  it  shall  be  used  for 
the  benefit  of  the  principal.  Men  appoint  agents  to  subserve  their  interests,  carry 
on  their  business,  preserve  their  property,  and  not  for  the  purpose  of  giving  it  away 
to  others  and  converting  it  to  their  own  use.  (After  discussing  Dowden  v.  Cryder, 
55  N.  J.  L.  329 ;  Stalnback  v.  Bank  of  Virginia,  11  Grat.  269 ;  and  Stainer  v.  Tysen, 
reported  above,  the  court  continues:)  Other  cases  illustrating  the  rule  are  Bank  v. 
Aymar,  3  HiO  (N.  Y.)  262;  Suckley  v.  Tunno,  1  Brev.  (S.  C.)  257;  Holden  v. 
Durant,  29  Vt.  184 ;  Odiorne  v.  Maxcy,  13  Mass.  178 ;  Bank  v.  Studiey,  1  Mo.  App. 
260.  Most  of  these  are  cases  in  which  the  agent  pledged  or  sold  the  paper  In  pay- 
ment of  his  own  debt,  so  that  the  third  party  dealing  with  him  derived  a  peculiar 
benefit  from  the  unauthorized  transaction.  This,  however,  does  not  seem  to  be  the 
reason  for  denying  validity  of  title  in  such  purchaser.  It  seems  to  stand  upon  the 
want  of  authority  in  the  agent  to  exercise  his  powers  for  his  own  benefit  or  for  the 
benefit  of  anybody  except  his  principal.  Knowledge  of  this  perversion  of  authority 
on  the  part  of  the  purchaser  is  necessary  to  the  invalidity  of  his  title,  of  course. 
But  when  he  does  have  such  knowledge,  he  is  bound  to  know  the  want  of  authority 
in  the  agent  to  so  use  his  powers." 


CHAP.   IX.]  GENERAL   DOCTRINE.  307 

HAMBEO   V.   BUKNAND   and  others. 

[1904]  2  K.  B.  (C.  A.)   10. 

Action  upon  a  guaranty  policy.  Each  of  the  defendants  other 
than  Burnand  had  given  to  the  latter,  who  was  a  member  of  Lloyd's, 
an  authority  in  writing,  which,  in  substance,  authorized  Burnand 
to  act  as  his  agent  for  the  purpose  of  underwriting  policies  of 
insurance,  and  carrying  on  the  ordinary  business  of  an  underwriier, 
at  Lloyd's,  in  his  name  and  behalf,  in  accordance  with  the  usual 
custom  at  Lloyd's.  The  written  authorities  so  given  to  Burnand 
by  the  other  defendants  were  never  shown,  nor  was  their  existence 
known,  to  the  plaintiffs.  Burnand  signed  the  guaranty  policy  in 
his  own  name,  and  the  names  of  the  other  defendants,  in  aid  of  a 
company  of  which  he  was  a  member  and  for  his  own  ends  and  not 
for  or  in  the  interests  of  the  other  defendants.  The  trial  judge  gave 
judgment  against  Burnand  alone. 

Collins^  M.  E.  .  .  .  It  has  been  contended  for  the  appellants 
that,  although  express  authority  was  given  in  writing,  as  in  the 
present  case,  authorizing  an  agent  to  make  such  a  contract  as  he 
has  made,  it  is  open  to  the  principal  to  say  that,  nevertheless,  if  it 
appears,  on  inquiring  into  the  motives  which  existed  in  the  agent's 
mind,  that  he  intended,  in  making  the  contract,  to  misuse  for  his 
own  ends  the  opportunity  given  to  him  by  his  authority,  and  apply 
it  to  a  purpose,  which,  if  the  principal  had  known  of  it,  he  would  not 
have  sanctioned,  then,  because  the  agent  was  so  influenced  by  im- 
proper motives,  the  principal  is  not  liable  upon  the  contract  made 
by  him.  I  should  have  said  myself,  apart  from  authority  on  the 
subject,  that  such  a  proposition  could  not  hold  water.  I  am  some- 
what surprised  to  find  that,  in  an  American  case,  a  view  favorable 
to  it  has  been  taken  by  one  of  the  judges.  I  gather  that  it  was  in 
consequence  of  what  was  said  in  that  case  that  Bigham,  J.,  for  whose 
opinion  on  a  commercial  point  I  have  the  greatest  respect,  was  led 
to  the  conclusion  which  he  adopted.  The  case  of  North  Eiver  Bank 
V.  Aymar,  3  Hill,  262,  was  cited  to  him,  in  which  case  there  was  a 
difference  of  opinion  between  the  judges,  one  of  them  adopting  the 
view  that,  though  an  agent  had  acted  within  the  terms  of  his 
authority,  it  was  competent  to  the  court  to  look  into  the  mind  of 
the  agent,  and,  if  he  had  misapplied  his  authority  for  his  own 
purposes,  the  principal  was  not  bound.  The  other  two  judges  did 
not  agree  with  that  view.  Bigham,  J.,  after  examining  the  reasons 
given  in  that  case,  came  to  the  conclusion  that  the  reasoning  of  the 
dissentient  judge  was  the  stronger;  and,  not  being  fully  apprised 
of  the  present  state  of  American  authorities,  he  decided  on  similar 
grounds  that  the  principals  in  the  case  before  him  were  not  liable 


308  HAMBRO   V.   BURNAND   AND  OTHERS.  [CHAP.   IX. 

for  the  act  of  the  agent;  but  since  that  case  the  question  has  been 
mooted  several  times  in  America,  and  ultimately  the  American 
courts  have  authoritatively  laid  it  down  as  the  true  principle  that, 
where  a  written  authority  given  to  an  agent  covers  the  thing  done 
by  him  on  behalf  of  his  principal,  no  inquiry  is  admissible  into  the 
motives  upon  which  the  agent  acted.  It  would  be  impossible,  as  it 
seems  to  me,  for  the  business  of  a  mercantile  community  to  be  car- 
ried on,  if  a  person  dealing  with  an  agent  was  bound  to  go  behind 
the  authority  of  the  agent  in  each  case,  and  inquire  whether  his 
motives  did  or  did  not  involve  the  application  of  the  authority  for 
his  own  private  purposes.  The  matter  however  does  not  rest  there, 
for  the  view  which  has  been  ultimately  established  in  the  United 
States  by  a  strong  concatenation  of  American  authorities  appears 
to  have  been  anticipated  in  England,  and  at  length  finally  adopted 
in  a  recent  decision  of  the  Judicial  Committee  of  the  Privy  Council. 
There  is  a  very  remarkable  passage  in  the  judgment  delivered  by 
Lord  Brougham  in  the  year  1849  in  the  case  of  Bank  of  Bengal  v. 
Fagan,  7  Moo.  P.  C.  61,  at  p.  74.  He  said :  "  But  it  is  said  that  the 
power  was  given  to  do  the  acts  in  question  on  the  donor's  behalf. 
This  is  really  only  saying  that,  what  the  agent  is  to  do,  he  is  to  do 
as  representing  the  principal ;  as  doing  it  on  behalf  of,  or  in  the  place 
and  in  the  right  of,  the  principal.  But  it  is  further  said  that,  even 
if  the  expression  be  read  as  only  amounting  to  this,  the  indorsement 
is  to  be  only  made  for  the  benefit  of  the  principal,  and  not  for  the 
purposes  of  the  agent.  AVe  do  not  see  how  this  very  materially  affects 
the  case,  for  it  only  refers  to  the  use  to  be  made  of  the  funds 
obtained  from  the  indorsement,  not  to  the  power;  it  relates  to  the 
purpose  of  the  execution,  not  to  the  limits  of  the  power  itself;  and, 
though  the  indorsee's  title  must  depend  upon  the  authority  of  the 
indorser,  it  cannot  be  made  to  depend  upon  the  purposes  for  which 
the  indorser  performs  his  act  under  the  power."  That  passage  seems 
by  anticipation  to  deal  with  the  very  point  which  was  the  salient 
point  of  the  judgment  of  Brigham,  J.,  in  this  case  and  of  the  argu- 
ment before  us.  In  the  case  of  Bryant,  Powis  &  Bryant,  Ld.  v. 
Quebec  Bank,  [1893]  A.  C.  170,  Lord  Macnaghten,  in  delivering 
the  judgment  of  the  Judicial  Committee  of  the  Privy  Council,  says: 
"  The  law  appears  to  their  Lordships  to  be  very  well  stated  in  the 
Court  of  Appeals  in  the  State  of  New  York  in  President,  etc.,  of  the 
Westfield  Bank  v.  Comen,  37  IST.  Y.  320,  cited  by  Andrews,  J.,  in 
his  judgment  in  another  case  brought  by  the  Quebec  Bank  against 
the  company.  The  passage  referred  to  is  as  follows :  *  Whenever  the 
very  act  of  the  agent  is  authorized  by  the  terms  of  the  power,  that 
is  whenever,  by  comparing  the  act  done  by  the  agent  with  the  words 
of  the  power,  the  act  is  in  itself  warranted  by  the  terms  used,  such 
act  is  binding  on  the  constituent,  as  to  all  persons  dealing  in  good 
faith-  with  the  agent ;  such  persons  are  not  bound  to  inquire  into 


CHAP.    IX.]  GENERAL   DOCTRINE.  309 

facts  aliunde.  The  apparent  authority  is  the  real  authority.'" 
That  passage,  as  pointed  out  by  the  plaintiffs'  counsel,  though  acted 
on  and  adopted  by  the  Court  of  Appeals  of  New  York,  was  taken 
from  the  language  of  the  majority  of  the  judges  in  the  first- 
mentioned  American  case.  So  that,  after  a  series  of  cases,  that  is 
the  final  view  of  the  courts  in  America,  which  has  been  adopted 
by  the  Judicial  Committee  of  the  Privy  Council.  The  defendants* 
counsel  sought  to  distinguish  the  case  of  Bryant,  Powis  &  Bryant, 
Ld.  V.  Quebec  Bank,  [1893]  A.  C.  170,  on  the  ground  that  it  related 
to  a  negotiable  instrument  in  the  hands  of  a  hona  fide  holder  for 
valuable  consideration.  But,  as  Eomer,  L.  J,,  has  pointed  out,  it 
appears  that  the  agent  who  indorsed  the  bills  in  that  case  indorsed 
them  "  per  pro,"  thereby  giving  notice  to  any  one  who  took  the  bill 
of  the  fact  that  he  was  acting  within  the  terms  of  a  special  authority. 
It  is  not  ad  rem,  therefore,  to  say  that  the  case  concerned  a  nego- 
tiable instrument;  the  rights  of  the  person  who  took  the  bill  under 
such  circumstances  had  to  be  measured  by  the  authority  given  to 
the  agent.  It  seems  to  me  that  the  law  on  the  subject  is  clearly 
established,  and  therefore  the  ground  of  the  judgment  of  Bigham, 
J.,  fails.  .That  being  so,  it  is  really  unnecessary  for  me  to  go  into 
the  various  matters  relied  upon  by  the  defendants  in  relation  to  the 
question  whether,  in  underwriting  the  policy,  Burnand  was  acting 
for  his  own  benefit,  and  in  his  own  interests,  and  not  in  those  of  the 
other  defendants.  On  the  view  which  I  have  taken  the  plaintiffs 
were  not  concerned  to  inquire  into  those  matters,  and  they  do  not 
affect  their  right  to  recover  upon  the  contract  which  was  made  by 
the  defendant  Burnand  with  the  authority  of  the  other  defendants. 
On  these  grounds  I  think  the  appeal  must  be  allowed. 

Eomer,  L.  J.  .  .  .  Consider  how  the  case  would  have  stood  if  the 
plaintiffs  in  this  case,  who  accepted  the  guarantee  policies,  had  not 
relied  merely  on  the  representation  which  Burnand  necessarily  made 
to  them  by  professing  to  sign  the  policies  on  behalf  of  his  co- 
defendants.  The  utmost  which,  it  appears  to  me,  they  need  have 
done,  as  between  themselves  and  the  principals  of  the  agent,  was  to 
ask  the  agent  to  produce  his  written  authority,  if  he  had  any. 
Had  they  done  that,  and  had  that  authority  been  shown  to  them, 
it  would  have  been  hopeless,  in  my  opinion,  for  the  principals  of 
the  agent  afterwards  to  say  that  they  were  not  bound  by  the  written 
authority  so  inspected  because  the  agent  had  acted  in  bad  faith 
towards  them  in  acting  upon  that  authority.  As  a  matter  of  prin- 
ciple this  appears  to  me  so  clear  that  I  will  not  further  consider  the 
point.  Then  does  it  make  any  difference  that  in  point  of  fact  the 
plaintiffs  did  not  inspect  the  authority?    I  tliink  not.  .  .  . 

I  think  the  cases  cited  for  the  defendants  which  concerned  the 
relation  of  master  and  servant  are  not  applicable  to  the  present 
case.     In  those  cases  the  sole  question  was  as  to  the  authority  by 


.310  HEATH   V.   STODDARD.  [CHAP.    IX. 

implication  conferred  by  a  master  upon  a  servant.  They  have 
nothing  to  do  with  a  case  where  there  is  an  express  authority  in 
writing.  Further  I  agree  with  the  Master  of  the  Rolls  that  the  point 
has  been  decided  in  this  country,  if  not  before,  by  the  case  of  Bryant, 
Powis  &  Bryant  v.  Quebec  Bank,  [1893]  A.  C.  170,  to  which  we 
have  been  referred.  Therefore  both  on  principle  and  authority 
I  think  the  point  of  law  ought  to  be  decided  contrary  to  the  view 
which  Bigham,  J.,  took.  .  .  . 

Mathews,  L.  J.,  also  delivered  a  concurring  opinion. 

Appeal  allowed. 


HEATH   V.    STODDARD. 
91  Me.  499.     1898. 

This  was  an  action  of  replevin  to  recover  a  piano  which  one  Spencer 
sold  to  the  defendant  for  $125  in  cash  and  a  horse  worth  from  $10 
to  $25.  The  jury  returned  a  verdict  for  the  plaintiff,  and  assessed 
damages  in  the  sum  of  one  cent. 

At  the  trial  the  defendant  contended  that  if  the  plaintiff  after 
knowing  that  Spencer  had  talked  with  the  defendant  relative  to  the 
purchase  of  a  piano,  delivered  the  piano  in  suit  to  Spencer  to  be 
carried  to  the  defendant's  home  in  Greene  to  plant,  and  if  Spencer 
instead  of  planting  the  same  as  instructed  by  the  plaintiff,  sold  the 
same  to  the  defendant  and  appropriated  the  proceeds,  then  having 
placed  Spencer  in  the  position  to  commit  a  fraud,  the  plaintiff  must 
suffer  the  loss  incurred  by  tlie  fraudulent  acts  of  Spencer  in  selling 
the  piano  and  appropriating  the  proceeds,  and  not  the  defendant, 
who  was  an  innocent  party. 

The  presiding  justice  did  not  instruct  the  jury  as  contended  for 
by  the  defendant,  but  did  instruct  them  among  other  matters  and 
things  as  stated  in  the  opinion. 

WiswELL,  J.  Replevin  for  a  piano.  The  piano  was  at  one  time 
the  property  of  the  plaintiff  who  intrusted  it  to  one  Spencer  for  the 
purpose  of  taking  it  to,  and  leaving  it  at,  the  house  of  the  defendant, 
but  without  any  authority,  as  the  plaintiff  claims  and  as  has  been 
found  by  the  jury,  to  sell  the  piano  or  to  make  any  contract  for  its 
sale:  the  arrangement  being,  as  the  plaintiff  claims,  that  Spencer 
should  merely  take  it  and  leave  it  at  the  defendant's  house,  and  that 
a  day  or  two  later  the  plaintiff  would  go  there  and  make  a  sale  of 
it  if  he  could. 

Spencer  had  the  piano  taken  to  the  defendant's  house,  but  in- 
stead  of  simply  leaving  it  so  that  the  plaintiff  might  subsequently 
sell  it,  he  assumed  authority  in  himself  to  sell  it  to  the  defend- 
ant, who  bought  it  and  paid  in  cash  and  otherwise  the  full  pur- 


CHAP.   IX.]  GENERAL  DOCTRINE.  311 

chase  price  fixed  by  Spencer,  without  any  knowledge  of  his  want  of 
authority. 

Spencer  was  himself  a  dealer  in  pianos  and  musical  instruments, 
and  upon  the  very  day  when  he  made  the  arrangement  with  the 
plaintiff  to  take  one  of  his  (plaintiff's)  pianos  to  the  defendant's 
house,  he  had  seen  the  defendant  and  attempted  to  sell  him  one  of 
his  pianos. 

Upon  the  question  of  Spencer's  authority  as  an  agent  the  presiding 
justice  instructed  the  jury  as  follows : 

"  Tlie  mere  fact  that  Spencer  had  possession  of  that  piano  and  sold  it  to 
the  defendant,  even  as  the  defendant  says,  Heath's  name  not  having  been 
mentioned  to  the  defendant,  would  not  necessarily  give  a  title  to  the  defend- 
ant. To  illustrate:  Suppose  you  are  a  livery  stable  keeper  and  you  let  a 
man  have  a  horse  to  go  from  here  to  Portland.  You  let  him  have  that  horse, 
but  it  is  for  a  special  purpose  to  go  from  here  to  Portland.  He  meets  a  man 
on  the  road  and  asks  him  what  he  will  give  for  the  horse;  they  dicker  and 
finally  the  man  whom  he  meets  buys  that  horse  for  $125.  You  do  not  sup- 
pose that  would  divest  you  of  the  title  as  a  livery  stable  keeper,  because 
you  have  never  given  authority  to  that  man  to  sell  it.  You  gave  authority 
to  that  man  to  drive  to  Portland  and  back,  and  if  any  man  was  foolish 
enough  to  buy  that  horse  of  that  man,  he  will  have  to  stand  his  chances. 
I  give  you  this  as  an  illustration.  It  may  be  an  extreme  illustration.  Now, 
if  a  party  allows  another  to  take  a  piano  and  go  into  the  country  to  leave 
it,  and  that  party  who  takes  it  sells  it  and  there  is  not  any  authority  for 
that  sale,  then  whoever  purchases  it  in  the  country,  or  wherever  it  is  left, 
or  on  the  way,  can  obtain  no  greater  title  than  the  party  has  who  sells  it. 
So  it  comes  back  to  the  question  of  whether  this  man  Heath,  the  plaintiff 
iu  this  case,  ever  authorized  Spencer  to  so  deal  with  that  property  in  the 
way  of  a  sale  of  it  as  to  constitute  him  an  agent  for  that  purpose." 

While  these  instructions  were  technically  correct,  so  far  as  they 
go,  we  do  not  think  that  they  were  adequate  in  view  of  the  de- 
fendant's position,  and  we  fear  that  the  illustration  given  was  so 
extreme  as  to  be  misleading. 

A  principal  is  not  only  bound  by  the  acts  of  his  agent,  whether 
general  or  special,  within  the  authority  which  he  has  actually  given 
him,  but  he  is  also  bound  by  his  agent's  acts  within  the  apparent 
authority  which  the  principal  himself  knowingly  permits  his  agent 
to  assume,  or  which  he  holds  the  agent  out  to  the  public  as  possess- 
ing. Am.  &  Eng.  Encyl.  of  Law,  2d  ed.,  vol.  1,  page  969,  and  cases 
cited. 

Whether  or  not  the  principal  is  bound  by  the  acts  of  his  agent 
when  dealing  with  a  third  person  who  does  not  know  the  extent  of 
his  authority,  depends,  not  so  much  upon  the  actual  authority  given 
or  intended  to  be  given  by  the  principal,  as  upon  the  question,  what 
did  such  third  person,  dealing  with  the  agent,  believe  and  have  a 
right  to  believe  as  to  the  agent's  authority,  from  the  acts  of  the 
principal.  Griggs  v.  Selden,  58  Vt.  561 ;  Towle  v.  Leavitt,  23  N.  H. 
360  (55  Am.  Dee.  195) ;  Walsh  v.  Hartford  Ins.  Co.,  73  N.  Y.  5. 


312  RIPLEY   V.    COCHRAN.  [CHAP.   IX. 

For  instance,  if  a  person  should  send  a  commodity  to  a  store  or 
warehouse  where  it  is  the  ordinary  business  to  sell  articles  of  the 
same  nature,  would  not  a  jury  be  justified  in  coming  to  the  conclu- 
sion that,  at  least,  the  owner  had  by  his  own  act  invested  the  person 
with  whom  the  article  was  intrusted,  with  an  apparent  authority 
which  would  protect  an  innocent  purchaser  ?  ^ 

In  Pickering  v.  Busk,  15  East,  43,  quoted  by  Mellen,  C.  J.,  in 
Parsons  v.  Webb,  8  Maine,  38,  Lord  Ellenborodgh  says:  "Where 
the  commodity  is  sent  in  such  a  way,  and  to  such  a  place  as-to 
exhibit  an  apparent  purpose  of  sale,  the  principal  will  be  bound  and 
the  purchaser  safe." 

Let  us  apply  this  principle  to  the  present  case.  Spencer  was  a 
dealer  in  pianos.  Immediately  before  this  transaction  he  had  been 
trying  to  sell  a  piano  to  the  defendant.  There  was  evidence  tending 
to  show  that  the  plaintiff  knew  these  facts.  With  this  knowledge 
he  intrusted  the  possession  of  this  piano  with  Spencer  for  the  pur- 
pose of  its  being  taken  by  Spencer  to  the  defendant's  house  with 
a  view  to  its  sale.  Spencer  was  not  acting  merely  as  a  bailee;  he 
did  not  personally  take  the  piano  to  the  defendant's  house,  but  had 
it  done  by  a  truckman  or  expressman;  Spencer  was  employed  for 
some  other  purpose.  Whatever  may  have  been  the  private  arrange- 
ment between  the  plaintiff  and  Spencer,  or  the  limit  of  authority 
given  by  the  plaintiff,  would  not  a  jury  have  been  warranted  in 
coming  to  the  conclusion  that  the  purchaser  was  justified  in  believing, 
in  view  of  all  of  these  facts,  that  Spencer  had  authority  to  sell,  and 
that  the  plaintiff  knowingly  placed  Spencer  in  a  position  where  he 
could  assume  this  apparent  authority  to  the  injury  of  the  defendant  ? 
We  think  that  a  jury  might  have  properly  come  to  such  a  conclusion, 
and  that  consequently  the  instructions  were  inadequate  in  this 
respect,  that  it  was  nowhere  explained  to  the  jury  that  a  principal 
might  be  bound  by  the  acts  of  an  agent,  not  within  his  actual 
authority,  but  within  the  apparent  authority  which  the  principal 
had  knowingly  and  by  his  own  acts  permitted  the  agent  to  assume. 

Exceptions  sustained. 


EIPLEY   V.    COCHRAN. 

10  Abb.  Pr.  N.  S.  (N.  Y.  C.  P.  Gen.  T.)  52.    1870. 

It  appeared  from  the  evidence  on  the  trial,  that  William  Cochran, 
defendant,  contracted  with  David  Eipley  &  Sons,  plaintiffs,  for  the 
use  of  a  log  to  be  used  by  Cochran  on  a  job  he  intended  to  do  at 
Elizabeth,  N.  J.,  on  Westminster  Church.    Cochran  obtained  credit 

^  See  Biggs  v.  BTtms  [1894],  1  Q.  B.  88,  pott,  p.  616. 


CHAP.    IX.]  GENERAL   DOCTRINE,  313 

through  a  letter  of  introduction  and  recommendation  from  third 
persons. 

The  log  was  selected  and  agreed  upon  between  Cochran  and 
plaintiff's  bookkeeper,  and  it  was  agreed  that  defendant  was  to  send 
word  when  he  wanted  the  log,  and  send  a  man  for  it. 

About  a  week  after  the  agreement,  one  Smith,  who  had  the 
Westminster  job,  but  did  not  so  state  to  plaintiffs,  called  on  them 
and  said  he  came  for  Cochran's  log  —  he  wanted  to  see  about  the 
log  Cochran  had  ordered.  There  was  also  testimony  that  the  spring 
after  the  job  was  done,  plaintiffs,  on  presenting  the  bill  to  Cochran, 
were  told  that  "  Smith  ought  to  pay  for  the  log  "  —  "  if  Smith  did 
not,  defendant  would"  —  "wanted  to  get  it  out  of  Smith  if  he 
could  "  —  "  that  it  was  mean  in  Smith  not  to  pay." 

Mr.  Justice  Loew,  before  whom  the  case  was  tried,  gave  judgment 
for  the  plaintiff,  and  defendant  appealed. 

By  the  court,  Joseph  F.  Daly,  J.  The  finding  of  the  justice 
settles  the  fact,  that  Cochran  went  to  the  plaintiffs,  selected  the  log, 
and  told  them  he  would  send  a  man  after  it.  That  afterwards  Smith 
came  to  the  plaintiffs  and  asked  for  the  log  Cochran  had  ordered; 
that  the  plaintiffs  delivered  the  log  to  Smith  for-  Cochran,  giving 
the  latter  credit  for  it  on  the  strength  of  a  letter  of  Thornbum  & 
Waterbury,  presented  by  him  when  he  first  came  for  the  log;  that 
Smith  was  not,  in  fact,  the  agent  of  Cochran,  but  was  told  by 
Cochran,  that  he  could  get  at  plaintiffs'  a  log  of  the  proper  size 
for  the  work  he  (Smith)  was  about  to  undertake,  being  the  same 
work  Cochran  had  in  view  when  he  went  for  the  log. 

The  sole  question  is  whether  Cochran,  by  any  act,  held  out  Smith 
to  plaintiffs  as  his  agent,  so  as  to  charge  himself. 

In  my  opinion  he  did.  He  knew  he  had  left  the  plaintiffs' 
promising  to  send  a  man  for  the  log,  and  he  must  have  known  that 
his  recommending  Smith  to  go  there  after  the  same  property  could 
not  fail  to  mislead  the  plaintiffs.  It  was  his  duty  to  have  notified 
them  that  he  did  not  want  the  log,  but  that  Smith  did,  if  he  desired 
to  avoid  responsibility. 

The  judgment  should  be  aflBrmed. 

Charles  P.  Daly,  Ch.  J.,  and  Eobinson,  J.,  concurred. 

Judgment  affirmed. 


WATTS   V.   HOWARD. 

70  Minn.  122.     1897. 

Appeal  by  defendant  from  a  judgment  of  the  municipal  court 
of  Duluth,  entered  pursuant  to  a  verdict  of  $151.06  in  favor  of 
plaintiffs. 


314  WATTS   V,   HOWARD.  [CHAP.   IX. 

Mitchell,  J.  This  action  was  brought  to  recover  the  purchase 
price  of  certain  logs  sold  and  delivered  by  plaintiffs  to  defendant 
The  sale  and  delivery  and  the  agreed  price  per  thousand  feet  were 
admitted  by  the  defendant;  the  only  real  controversy  being  as  to 
the  number  of  feet  in  the  logs.  They  had  been  scaled  by  the  scaler 
employed  at  defendant's  mill.  ... 

When  plaintiffs  solicited  defendant  to  buy  the  logs,  he  referred 
them  to  one  Campbell,  as  the  person  who  attended  to  that  business 
for  him,  and  requested  them  to  go  and  talk  to  him.  In  pursuance 
of  this  direction,  plaintiffs  sought  Campbell,  and  took  him  where 
the  logs  were;  and  after  he  had  examined  them  he  and  they  agreed 
on  the  terms  of  the  sale,  one  of  which  was  that  the  logs  were  to 
be  scaled  by  the  scaler  employed  at  the  defendant's  mill  as  soon 
as  they  arrived  there,  and  that  they  should  be  paid  for  according  to 
that  scale,  at  $3.50  per  thousand  feet. 

Upon  the  trial,  defendant  offered  to  prove  that  Campbell  had  no 
authority  to  bind  him  by  agreeing  that  the  logs  should  be  scaled 
in  any  particular  way,  "  or  that  the  scale  of  any  particular  person 
should  govern  or  fix  the  basis  for  the  parties,"  or  to  "  designate  the 
manner  in  which  the  merchantable  pine  lumber  in  the  saw  logs 
should  be  ascertained."  The  exclusion  of  this  evidence  is  assigned 
as  error.  There  was  no  offer  to  prove  that  the  plaintiffs  had  notice 
of  any  such  limitations  upon  Campbell's  authority.  .The  evidence 
was  properly  excluded. 

Every  agency  carries  with  it,  or  includes  in  it,  the  authority  to 
do  whatever  is  usual  and  necessary  to  carry  into  effect  the  principal 
power,  and  the  principal  cannot  restrict  his  liability  for  acts  of  the 
agent  within  the  apparent  scope  of  his  authority  by  private  instruc- 
tions not  communicated  to  those  with  whom  he  deals.  These 
principles  apply  as  well  to  special  as  to  general  agents.  An  agent 
with  authority  to  sell  or  buy  has  authority  to  sell  or  buy  in  the 
usual  and  ordinary  manner.  In  this  state  the  purchase  and  sale 
of  logs  according  to  a  scale  to  be  made  is  so  general  and  notorious 
that  courts  will  take  notice  of  the  fact.  The  manner  stipulated  in 
this  contract  for  ascertaining  the  amount  of  lumber  in  the  logs 
was  the  usual  and  ordinary  way,  and  hence  within  the  apparent 
authority  of  an  agent  to  purchase  logs,  and  the  plaintiffs  are  not 
bound  by  any  private  limitations  upon  Campbell's  authority  in  that 
regard  not  communicated  to  them.  .  .  . 

Judgment  affirmed.^ 

>  "  While  a  general  agent  has  broader  powers  than  one  selected  to  do  a  particular 
act,  the  authority  in  both  cases  must  be  construed  to  Include  all  necessary  and  usual 
means  for  effectually  executing  It.  Where  one  Is  appointed  to  sell  a  particular  article 
to  a  particular  person,  this  confers  on  the  special  agent  authority  to  agree  on  the 
price  —  otherwise  the  appointment  is  illusory,  and  not  real."  Bass  Dry  Goods  Co. 
y.  Granite  City  Mfg.  Co.,  119  Mo.  124. 


CHAP.   IX.]  GENERAL  DOCTRINE.  315 

BENTLEY   v.    DOGGETT    et   al. 

51  Wis.  224.     1881. 

Action  to  recover  for  livery  furnished  by  plaintiff  to  one  Otis, 
an  agent  of  defendants.  Judgment  for  plaintiff.  Defendants 
appeal. 

Defendants  offered  to  prove  that  they  had  furnished  Otis  with 
money  to  cover  all  expenses,  that  he  had  no  authority  to  pledge 
their  credit,  that  they  had  subsequently  settled  with  Otis  and  allowed 
him  the  amount  of  plaintiff's  bill,  and  that  there  was  a  general 
custom  in  Chicago  (where  defendants  did  business)  to  furnish  travel- 
ling salesmen  with  money  for  all  expenses,  and  to  give  such  salesmen 
no  authority  to  pledge  the  credit  of  their  principals.  This  evidence 
was  excluded. 

-  Taylor,  J.  It  is  clearly  shown  by  the  evidence  that  it  was  not 
only  convenient  but  necessary  for  the  agent,  Otis,  to  have  the  use 
of  horses  and  carriages  in  order  to  transact  the  business  he  was 
employed  to  transact;  and  the  only  question  is,  whether  he  could 
bind  his  principals  by  hiring  them  upon  their  credit.  Otis  was  the 
agent  of  the  defendants  for  the  purpose  of  travelling  about  the 
country  with  samples  of  their  merchandise,  contained  in  trunks, 
which  rendered  it  necessary  to  have  a  team  and  carriage  to  transport 
him  and  his  samples  from  place  to  place,  with  full  authority  to  sell 
their  merchandise  by  sample  to  customers,  and  direct  the  same  to 
be  delivered  according  to  his  orders.  The  defendants  not  having 
furnished  their  agent  the  necessary  teams  and  carriages  for  transpor- 
tation, he  clearly  had  the  right  to  hire  the  same  and  pay  their  hire 
out  of  the  funds  in  his  hands  belonging  to  them.  This  is  admitted 
by  all  parties.  The  real  question  is,  can  the  agent,  having  the  money 
of  his  principals  in  his  possession  for  the  purpose  of  paying  such 
hire,  by  neglecting  to  pay  for  it,  charge  them  with  the  payment  to 
the  party  furnishing  the  same,  such  party  being  ignorant  at  the  time 
of  furnishing  the  same  that  the  agent  was  furnished  by  his  principals 
with  money  and  forbidden  to  pledge  their  credit  for  the  same? 

There  can  be  no  question  that,  from  the  nature  of  the  business 
required  to  be  done  by  their  agent,  the  defendants  held  out  to  those 
who  might  have  occasion  to  deal  with  him,  that  he  had  the  right 
to  contract  for  the  use  of  teams  and  carriages  necessary  and  con- 
venient for  doing  such  business,  in  the  name  of  his  principals,  if  he 
saw  fit,  in  the  way  such  service  is  usually  contracted  for;  and  we 
may,  perhaps,  take  judicial  notice  that  such  service  is  usually  con- 
tracted for,  payment  to  be  made  after  the  service  is  performed. 
It  would  seem  to  follow  that,  as  the  agent  had  the  power  to  bind 
his  principals  by  a  contract  for  such  service,  to  be  paid  for  in  the 


316  BENTLEY   V.   DOGGETT   ET  AL.  [CHAP.   IX. 

usual  way,  if  he  neglects  or  refuses  to  pay  for  the  same  after  the 
service  is  performed,  the  principals  must  pay.  The  fault  of  the  agent 
in  not  paying  out  of  the  money  of  his  principals  in  his  hands  cannot 
deprive  the  party  furnishing  the  service  of  the  right  to  enforce  the 
contract  against  them,  he  being  ignorant  of  the  restricted  authority 
of  the  agent.  If  the  party  furnishing  the  service  knew  that  the  agent 
had  been  furnished  by  his  principal  with  the  money  to  pay  for  the 
service,  and  had  been  forbidden  to  pledge  the  credit  of  his  principals 
for  such  service,  he  would  be  in  a  different  position.  Under  such 
circumstances,  if  he  furnished  the  service  to  the  agent,  he  would  be 
held  to  have  furnished  it  upon  the  sole  credit  of  the  agent,  and 
he  would  be  compelled  to  look  to  the  agent  alone  for  his  pay.  We 
think  the  rule  above  stated  as  governing  the  case  is  fully  sustained 
by  the  fundamental  principles  of  law  which  govern  and  limit  the 
powers  of  agents  to  bind  their  principals  when  dealing  with  third 
persons.  Judge  Story,  in  his  work  on  Agency,  §  127,  says :  "  The 
principal  is  bound  by  all  acts  of  his  agent  within  the  scope  of  the 
authority  which  he  holds  him  out  to  the  world  to  possess,  although 
he  may  have  given  him  more  limited  private  instructions  unknown 
to  the  persons  dealing  with  him."  In  §  133,  he  says :  "  So  far  as 
an  agent,  whether  he  is  a  general  or  special  agent,  is  in  any  case 
held  out  to  the  public  at  large,  or  to  third  persons  dealing  with  him, 
as  competent  to  contract  for  and  bind  the  principal,  the  latter  will 
be  bound  by  the  acts  of  the  agent,  notwithstanding  he  may  have 
deviated  from  his  secret  instructions."  And  again,  in  §  73,  in 
speaking  of  the  power  of  an  agent  acting  under  a  written  authority, 
he  says :  "  In  each  case  the  agent  is  apparently  clothed  with  full 
authority  to  use  all  such  usual  and  appropriate  means,  unless  upon 
the  face  of  the  instrument  a  more  restrictive  authority  is  given,  or 
must  be  inferred  to  exist.  In  each  case,  therefore,  as  to  third  persons 
innocently  dealing  with  his  agent,  the  principal  ought  equally  to 
be  bound  by  acts  of  the  agent  executing  such  authority  by  any  of 
those  means,  although  he  may  have  given  to  the  agent  separate  pri- 
vate and  secret  instructions  of  a  more  limited  nature,  or  the  agent 
may  be  secretly  acting  in  violation  of  his  duty."  In  the  case  of! 
Pickering  v.  Busk,  15  East,  38^3,  Lord  Ellenborough,  speaking* 
of  the  power  of  an  agent  to  bind  his  principal,  says :  "  It  is  cle^ 
that  he  may  bind  his  principal  within  the  limits  of  the  author/^ 
with  which  he  has  been  apparently  clothed  by  the  principal  in  resect 
to  the  subject-matter;  and  there  would  be  no  safety  in  mercantile 
transactions  if  he  could  not."  These  general  priheipTeshave  been 
illustrated  and  applied  by  this  and  other  courts  in  the  following 
cases :  Young  v.  Wright,  4  Wis.  144 ;  Whitney  v.  State  Bank,  7  Wis. 
620;  Long  v.  Fuller,  21  Wis.  121;  Houghton  v.  Bank,  26  Wis.  663 
Kasson  v.  Noltner,  43  Wis.  646;  Smith  v.  Tracy,  36  N.  Y.  79 
Andrews  v.  Kneeland,  6  Cow.  354. 


CHAP.   IX.]  GENERAL   DOCTRINE.  317 

In  this  view  of  the  case  it  was  immaterial  what  the  orders  of  the 
principal  were  to  the  agent,  or  that  he  furnished  him  money  to  pay 
these  charges,  so  long  as  the  person  furnishing  the  service  was  in 
ignorance  of  such  facts.  In  order  to  relieve  himself  from  liability, 
the  principal  was  bound  to  show  that  the  plaintiff  had  knowledge 
of  the  restrictions  placed  upon  his  agent,  or  that  the  custom  to  limit 
the  powers  of  agents  of  this  kind  was  so  universal  that  the  plaintiff 
must  be  presumed  to  have  knowledge  of  such  custom.  Under  the 
decisions  of  this  court,  the  custom  offered  to  be  proved  was  not 
suflBciently  universal  to  charge  the  plaintiff  with  notice  thereof. 
See  Scott  v.  Whitney,  41  Wis.  504,  and  the  cases  cited  in  the  deci- 
sion, and  Hinton  v.  Coleman,  45  Wis.  165,  And  there  being  no 
proof  of  actual  notice  to  the  plaintiff,  the  only  issue  left  in  the  case, 
which  was  not  clearly  disposed  of  in  favor  of  the  plaintiff  by  the 
evidence,  was  submitted  to  the  jury,  viz.,  whether  the  credit  was, 
in  fact,  given  by  the  plaintiff  to  the  agent  or  to  the  firm.  The  jury 
found  against  the  defendants  upon  this  issue.  From  reading  the 
evidence  in  the  record,  I  should  have  been  better  pleased  with  a 
different  verdict  upon  this  issue;  but  as  there  is  some  evidence  to 
support  the  verdict,  and  as  this  court  has  held  substantially  in 
Champion  v.  Doty,  31  Wis.  190,  that  charging  the  service  in  the 
plaintiff's  books  to  the  agent  is  not  conclusive  that  the  credit  was 
given  to  him,  but  might  be  explained,  it  was  the  province  of  the  jury 
to  say  whether  the  explanation  given  by  the  plaintiff  was  reasonable 
and  satisfactory.  We  cannot,  therefore,  set  aside  the  verdict  as 
against  the  evidence. 

By  the  Court.    The  judgment  of  the  court  is  affirmed. 


BYRNE   V.   MASSASOIT   PACKING   CO. 
137  Mass.  313.     1884. 

Contract,  for  breach  of  written  agreement.  Verdict  for  plaintiff. 
Defendant  alleged  exceptions. 

Defendant's  agent  sold  plaintiff  3,000  barrels  of  mackerel.  De- 
fendant refused  to  deliver  on  the  ground  that  the  agent  agreed  to 
sell  at  not  less  than  market  price  and  to  responsible  parties  alone, 
whereas  this  sale  was  at  less  than  market  price  and  to  an  irresponsible 
party.  Defendant  offered  to  prove  that  plaintiff  was  an  irrespon- 
sible party,  and  also  offered  to  prove  a  custom  among  Boston  fish- 
dealers  to  accept  or  reject  contracts  of  agents.  Both  offers  were 
rejected  and  the  evidence  excluded. 

W.  Allen,  J.  The  authority  of  Brookman  as  selling  agent  of 
the  defendant  was  not  limited  by  the  provisions  in  the  contract 


318  AMERICUS   OIL   CO.   V.   GURE.  [CHAP.   IX. 

between  them,  by  which  he  guaranteed  that  his  sales  should  not  be 
less  than  $200,000,  and  that  all  sales  should  be  to  good  and  respon- 
sible parties,  and  at  not  less  than  market  prices.  This  was  an 
arrangement  between  the  principal  and  agent  which  could  not  affect, 
and  plainly  was  not  intended  to  affect,  third  parties.  The  evidence 
offered  to  prove  that  the  agent  had  violated  his  agreements  to  sell 
to  good  and  responsible  parties,  in  making  the  sale  to  the  plaintiff, 
was  therefore  immaterial,  and  was  properly  excluded,  even  if  it  was 
competent  evidence  to  prove  the  fact  for  which  it  was  offered. 

The  evidence  to  prove  a  custom  among  fish-dealers  in  Boston 
to  accept  or  reject  contracts  of  selling  agents,  not  known  to  the 
plaintiff,  nor  in  New  Orleans,  where  the  contract  was  made,  was 
properly  excluded.  Exceptions  overruled. 


AMEEICUS    OIL   CO.   v.    GUEK. 

114  Ga.  624.     1902. 

Lumpkin,  P.  J.  An  action  was  brought  in  the  superior  court  of 
Sumter  county,  by  W.  H.  Gurr  against  the  Americus  Oil  Company, 
for  the  price  of  certain  cottonseed.  There  was  a  verdict  for  the 
plaintiff,  and  the  defendant  complains  here  of  the  court's  refusal 
to  grant  it  a  new  trial.  The  theory  of  the  plaintiff  was,  that  he  sold 
the  seed  to  one  Ward,  as  agent  of  the  defendant ;  that  it  received  the 
.seed,  and  was  therefore  liable  to  him  for  the  price  thereof.  The 
motion  for  a  new  trial  presents  a  number  of  points  involving  familiar 
and  well-settled  rules  of  the  law  of  agency.  .  .  . 

We  reverse  the  judgment  rendered  in  this  case,  because  it  was 
contrary  to  law.  The  plaintiff  failed  entirely  to  show  that  Ward 
was  the  general  agent  of  the  defendant  company,  or  that  he  had 
authority  to  buy  seed  upon  its  credit.  It  clearly  and  distinctly 
appears  from  the  evidence  as  a  whole,  and  there  is  no  testimony  to 
the  contrary,  that  the  arrangement  between  the  company  and  Ward 
was  for  him  to  buy  seed  and  ship  the  same  to  the  company,  he  ii 
each  instance  to  pay  for  the  seed  purchased,  with  cash  fumishtsd 
him  for  this  purpose  by  the  company.  His  agency  was  thus  limrted, 
and  Gurr  in  dealing  with  him  was  bound,  at  his  peril,  to^now 
exactly  what  authority  Ward  had  in  the  premises.  It  is  tdo  well 
settled  to  require  citation  of  authority,  that  one  who^dedls'  with  a 
special  agent  must  ascertain  for  himself  the  scope  and  extent  of  the 
agent's  authority  to  bind  his  principal.  There  is  not  one  line  of 
testimony  in  the  record  before  us  which  would  warrant  a  finding 
that  the  Oil  Company  contemplated  or  intended  that  Ward  should 
have  any  other  authority,  except  to  buy  for  it,  with  cash  supplied 
to  him,  the  cottonseed  which  the  company  needed  in  its  business. 


CHAP.   IX.]  SCOPE  OF   PAETICULAR   POWERS.  319 

The  fact  that  it  actually  received  the  seed  which  were  delivered  by 
Gurr  to  Ward  did  not  make  it  liable  to  the  former  under  the  doc- 
trine of  ratification.  It  did  not  know  of  or  sanction  Ward's  purchase 
or  credit,  and  had  in  point  of  fact  furnished  him  with  more  than 
enough  cash  to  pay  for  the  seed  he  obtained  from  Gurr.  The  verdict 
returned  by  the  jury  necessarily  embraced  a  finding  that  Ward  was 
authorized  to  buy  seed  on  credit,  and  make  the  company  liable  to 
the  seller;  and  this  finding  is  wholly  unsupported. 

Judgment  reversed.^ 


2.     Scope  of  Particular  Powers. 

COWAN   V.    SAEGENT   MFG.    CO. 
141  Mich.  87.     1905. 

Action  by  J.  Fred  Cowan  against  the  Sargent  "Manufacturing 
Company.  There  was  a  judgment  for  defendant,  and  plaintiff  brings 
error, 

Moore,  C.  J.  .  .  .  The  defendant  is  a  corporation  with  a  manu- 
facturing plant  at  Muskegon.  It  had  a  branch  house  in  New  York 
for  the  purpose  of  marketing  the  goods  manufactured  in  the  Muske- 
gon factory.  Mr.  Hughson  was  in  charge  of  this  branch  house. 
The  stock  of  goods  carried,  and  which  Mr.  Hughson  was  authorized 
to  sell,  consisted  of  folding  chairs,  revolving  book  cases,  hospital 
supplies,  and  invalid  goods,  for  sick  people.  The  Sargent  Manu- 
facturing Company  did  not  deal  in  brass  beds,  springs,  mattresses, 
pillows,  or  parlor  furniture,  such  as  armchairs.  It  had  none  of 
these  goods  in  its  branch  house  in  New  York.  Giving  the  fullest 
force  possible  to  the  testimony  offered  on  the  part  of  the  plaintiff, 
it  shows  that  plaintiff  made  three  sales  at  plaintiff's  store  to  Hugh- 
son  under  the  following  circumstances :  Hughson  visited  plaintiff's 
store  in  New  York  about  October  8,  1902,  in  company  with  two  lady 
friends,  and  ordered  three  brass  beds,  three  springs,  two  hair  mat- 
tresses and  one  mattress  made  over,  and  two  pillows,  for  a  total  price 
of  $141.25.  These  goods  were  never  delivered  to  defendant,  or  in 
its  store.  It  was  arranged  at  the  time  Hughson  ordered  them  that 
they  were  to  be  delivered  to  a  Mrs.  Beebe,  in  Brooklyn.  Plaintiff 
says  this  was  done  to  save  cartage.  These  goods  are  part  of  plaintiff's 
claim.  Mrs.  Beebe  paid  Hughson  for  these  goods,  and  he  receipted 
for  them  in  the  name  of  the  defendant.  On  May  25,  1901,  Hughson 
ordered  one  iron  bedstead,  springs  and  mattress  made  special.  These 
goods  were  delivered  to  Walter  Cleveland,  659   Bedford  Avenue, 

'  Accord  :  SaugertJes,  etc.,  Co.  v.  Miller,  76  N.  Y.  App.  DIv.  167  (M.  gave  S, 
money  to  pay  for  transportation  of  team,  and  S.  Induced  the  carrier  to  charge  to  M.). 


320  COWAN   V.    SAROENT  MFG.   CO.  [CHAP.   IX. 

Brooklyn,  by  direction  of  Hughson,  and  paid  for  by  defendant's 
check,  drawn  by  Hughson.  On  July  29,  1902,  Hughson  came  to 
plaintiff's  store  and  ordered  a  brass  bed  from  stock.  This  was 
delivered  at  defendant's  store,  and  was  paid  for  on  November  5, 
1902,  by  a  check  signed,  "  Sargent  Manufacturing  Company,  Mr. 
Hughson,  Manager."  On  December  20,  1902,  Estabrook  &  Co. 
sold  at  their  place  of  business  one  armchair  for  $49,  which  was 
delivered  at  273  Sixth  Street,  Brooklyn,  to  Mrs.  F.  L.  Ingram. 
The  dealings  were  with  Mr.  Hughson,  who  gave  the  directions  as 
to  place  of  delivery  of  the  chair.  This  is  the  other  item  of  plaintiff's 
claim.  On  June  7,  1899,  a  five-piece  parlor  suit,  for  $82.50,  was 
ordered  by  Hughson,  in  person,  at  Estabrook  &  Co.'s  store,  and  was 
by  his  direction  delivered  to  F.  Morris,  959  Bedford  Avenue,  Brook- 
lyn; also  on  May  22,  1901,  a  parlor  suit  of  four  pieces,  at  $52.25, 
was  ordered  by  Hughson,  in  person,  at  Estabrook  &  Co.'s  store,  and 
was  by  his  direction  delivered  to  Walter  Cleveland,  659  Bedford 
Avenue,  Brooklyn.  Estabrook  &  Co.  never  had  any  dealings  with 
the  defendant,  other  than  those  mentioned.  They  satisfied  them- 
selves when  they  sold  the  first  bill  that  Hughson  was  manager  of  the 
defendant,  from  the  fact  that  he  had  "  a  card  or  something  "  with 
him.  At  least,  "Hughson  gave  them  to  so  understand."  Their 
salesman  who  sold  these  goods  never  saw  Mr.  Hughson  at  any  other 
time  than  when  these  three  purchases  were  made,  nor  in  any  other 
place,  except  in  their  (Estabrook  &  Co.'s)  store.  No  representations 
■were  made  by  anybody  to  them,  other  than  by  Mr.  Hughson  himself, 
that  he  was  manager  of  the  defendant.  The  last  two  items  were  paid 
for  by  checks  signed  the  same  as  the  others. 

It  is  argued  that,  as  Mr.  Hughson  was  in  charge  of  the  New  York 
house,  plaintiff  was  authorized  to  act  upon  his  statement  that  he 
had  authority  to  make  the  purchases.  The  trouble  with  the  argu- 
ment is  that  the  articles  purchased  were  not  within  the  scope  of  the 
business  of  the  defendant  in  New  York.  The  business  it  was  con- 
ducting there  was  the  selling  of  articles  made  by  it  in  Muskejgon. 
It  would  hardly  be  claimed  that  sales  to  Mr.  Hughson,  by  a  jeweler, 
of  diamonds,  or,  by  a  manufacturer,  of  a  touring  car,  would/ bind 
defendants.  The  principle  of  law  is  well  settled  that  "  The  autnority 
of  a  general  agent  is  not  unlimited,  but  must  necessarily  be  rje^tricted 
to  the  transactions  and  concerns  within  the  scope  of  tjjo  business 
of  the  principal,  and  if  he  exceeds  the  authority  the^rincipal  is  not 
bound."  1  Am.  &  Eng.  Ency.  of  Law  (2d  ed;)~^90,  and  the  many 
cases  there  cited.  See  Rice  v.  Peninsular  Club,  52  Mich.  87 ;  Hurley 
et  al.  V.  Watson,  68  Mich.  531;  Stilwell,  etc.,  Co.  v.  Paper  Mill  Co., 
115  Mich.  35.1 

*  In  discussing  the  scope  of  authority  of  an  agent  to  manage  a  business,  Stayton, 
Associate  Justice,  in  Collins  v.  Cooper,  65  Tex.  461,  at  p.  464,  said :  "  The  agency 
conferred  on  James  Collins  in  1869,  and  continued  until  near  the  close  of  the  year 


CHAP.    IX.]  SCOPE   OF   PARTICULAK    POWKKS.  321 

It  is  contended  that  a  ratification  of  the  acts  of  Hughson  can  be 
inferred  from  the  fact  that  bills  for  the  purchases  hereinbefore  men- 
tioned were  sent  to  the  New  York  house,  and  were  paid  for  with  its 
checks.  The  trouble  with  this  contention  is  that  it  is  not  shown  that 
iiny  one  acting  for  defendant,  except  Hughson,  knew  he  was  pur- 
chasing in  the  name  of  the  defendant  articles  outside  of  the  scope 
of  its  business,  and  paying  for  them  with  the  company  funds. 

Judgment  is  affirmed. 


STEWAET   V.   WOODWARD. 

50  Vt.  78.     1877. 

One  Currier  was  plaintiff's  general  agent.  He  was  indebted  to 
defendant  and  induced  defendant  to  take  his  pay  in  goods  from 
plaintiff's  store.  Currier  charged  the  goods  on  plaintiff's  books  to 
defendant,  and  paid  himself  his  own  wages  in  full  from  plaintiff's 
funds.  Plaintiff  sues  defendant  for  the  price  of  the  goods.  Judg- 
ment for  defendant. 

The  opinion  of  the  court  was  delivered  by 

Powers,  J.  The  report  of  the  auditor  states  that  Currier  was  the 
general  agent  of  the  plaintiffs  -in  the  conduct  of  their  business  at 
Montpelier.  His  authority  there  empowered  him  to  do  all  things 
usual  and  useful  to  conduct  the  business  of  merchant-tailors.  A  gen- 
eral agency  is,  however,  a  restricted  service.  The  agent  cannot  go 
outside  the  proper  scope  of  his  principal's  business.  So  far  as  the 
business  of  his  principal  is  concerned,  he  may  do  all  that  his  principal 
could  do.  He  cannot  steal  his  principal's  goods,  nor  appropriate 
them  to  his  own  use.  He  can  only  appropriate  them  to  the  use 
and  profit  of  the  principal.     Persons  dealing  with  a  general  agent 

1884,  through  which  he  conducted,  as  sole  manager,  a  large  mercantile  business  for 
the  appellants,  was  given  verbally  and  was  of  the  most  general  character.  The 
determination  of  the  extent  of  authority  conferred  on  an  agent  under  such  circum- 
stances, and  in  such  a  manner,  often  becomes  difficult ;  and  in  such  a  case  it  is  not 
only  proper,  but  becomes  necessary,  to  consider  the  character  of  the  business,  the 
manner  in  which  it  is  usual  to  carry  on  such  a  business,  and,  where  the  agency  has 
continued  for  a  long  time,  the  manner  in  which  the  particular  business  was  carried 
on,  in  order  to  ascertain  the  powers  which  are  to  be  implied  from  the  direct  or  prin- 
cipal authority.  Every  agency  '  carries  with  it,  or  includes  in  it,  as  an  incident,  all 
the  powers  which  are  necessary  or  proper,  or  usual,  as  means  to  effectuate  the  pur- 
pose for  which  it  was  created,'  unless  the  Inference  of  such  powers  be  expressly  ex- 
cluded by  the  Instrument  creating  the  agency,  or  by  the  circumstances  of  the  busi- 
ness to  which  the  agency  relates.  Incidental  powers  may  be  held.  In  a  given  case, 
to  exist  by  Inference  or  intendment  of  law.  Their  existence  in  another  case  may  be 
a  mere  inference  of  fact  arising  from  the  circumstances  of  the  case,  and  in  such  a 
case  the  question  is  one  for  a  jury  to  determine.  There  is  hardly  a  conflict  in  the 
evidence  as  to  the  language  used  in  conferring  the  agency  on  James  Collins,  nor  in 
reference  to  the  manner  in  which  the  business  was  conducted,  but  the  witnesses  vary 
very  materially  in  their  opinions  as  to  the  powers  conferred.  If,  however,  there  was 
a  conflict  in  the  evidence,  it  would  rest  with  the  Jury  to  settle  it,  «nd,  unless  there 
was  some  error  in  the  charge  of  the  court  submitting  the  question  of  authority  to 
tbe  jury,  we  could  not  disturb  their  verdict." 

21 


322  CANNON   V.   HENRY.  [CHAP.   IX. 

are  bound  to  measure  the  scope  of  his  authority,  as  they  are  in 
dealing  with  a  special  agent.  Although  the  compass  of  authority 
in  the  one  case  is  wider  than  in  the  other,  it  is  to  be  understood  that 
it  has  its  limits.  It  is  to  be  understood  that  it  is  an  agent,  not 
a  principal,  who  acts.    Lapoint  v.  Scott,  36  Vt.  608, 

The  defendant's  good  faith  in  the  transaction  avails  him  nothing. 
It  does  not  cure  Currier's  bad  faith. 

The  plaintiffs  have  not  misled  the  defendant.  They  notified 
everybody  that  Currier  was  an  agent,  authorized  to  sell  their  goods. 
Purchasers  understood  they  were  buying  goods  of  the  plaintiffs 
through  Currier  as  their  salesman,  and  that  the  pay  went,  or  should 
go,  to  the  plaintiffs. 

The  defendant  purchased  the  goods  sued  for,  and  attempted  a 
mode  of  payment  which  he  was  bound  to  know  was  unauthorized. 
He  has  had  the  goods  and  converted  them  to  his  own  use,  never 
having  paid  the  plaintiffs  for  them.  The  implied  promise  arising 
from  taking  the  benefit  of  the  delivery  of  them,  is  sufficient  to 
warrant  a  recovery  in  this  action. 

Judgment  reversed,  and  judgment  on  the  report  for  the  plaintiffs. 


CANNON   V.   HENRY. 

78  Wis.  167.     1890. 

Defendants  having  sub-let  a  railroad  construction  contract  em- 
ployed one  McQuade  as  walking  boss  to  superintend  or  inspect  the 
construction  work  of  the  sub-contractors;  to  see  that  they  did  the 
work  according  to  contract  and  had  a  sufficient  number  of  men  to 
fulfil  the  contract  and  carry  out  the  instructions  of  the  engineer. 
McQuade  requested  plaintiff  to  board  certain  laborers  employed 
by  sub-contractors  and  promised  to  pay  for  the  service./ 

Plaintiff  testified  that  he  gave  credit  for  such  board  solely  to  the 
defendants,  for  whom  McQuade  was  acting  in  the  matter.  The 
court  submitted  to  the  jury  the  questions :  ( 1 )  Did  McQuade  promise 
on  behalf  of  defendants  to  pay  such  board  bills,  and  (2)  Had  he 
apparent  authority  to  bind  defendants  by  such  proihise? 

Verdict  and  Judgment  for  plaintiff.  There^s  no  question  as  to 
the  amount  of  recovery,  if  defendants  are  liable.  The  defendants 
appeal  from  the  judgment. 

Lyon,  J.  Two  questions  are  presented  by  this  appeal  for  deter- 
mination. The  first  of  these  is.  Did  McQuade  promise  on  behalf 
of  the  defendants  to  pay  the  board  bills  in  controversy?  It  does 
not  appear  that  he  named  his  principals,  the  defendants,  as  the 
parties  who  were  to  pay  the  bills.    The  testimony  only  tends  to  show 


CHAP.   IX.]  SCOPE  OF  PARTICULAB  POWERS.  323 

that  he  said  he  would  pay  them  or,  what  is  the  same  thing,  would 
see  them  paid.  But  he  was  acting  for  the  defendants  in  the  business 
and  not  for  himself,  and  whatever  he  said  or  did  on  that  occasion 
was  in  their  behalf.  The  plaintiff  was  not  dealing  with  him  per- 
sonally, but  was  dealing  with  the  defendants  through  him  as  their 
agent,  with  full  knowledge  that  they  alone  were  interested  in  the 
transaction.  We  find  no  difficulty  in  holding  the  testimony  sufficient 
to  support  a  finding  that  McQuade  promised  the  plaintiff,  on  behalf 
of  defendants,  to  pay  the  board  bills  of  these  men. 

The  other  question  is.  Was  it  within  the  scope  of  McQuade's 
authority  as  agent  for  defendants,  to  bind  them  by  such  promise? 
The  question  must  be  answered  in  the  affirmative.  He  was  the 
representative  of  the  defendants  in  the  building  of  the  spur  track, 
and  superintended  the  work  for  them.  He  had  authority  to  compel 
the  sub-contractors  to  keep  sufficient  men  on  the  work  to  fulfil  their 
contracts  with  defendants.  If,  to  do  this  effectually,  it  was  necessary 
to  pledge  his  principals  to  pay  the  board  bills  of  the  laborers  (and 
it  must  be  assumed  that  it  was),  he  had  apparent  if  not  actual 
authority  to  charge  the  defendants  with  such  liability.  In  other 
words,  he  acted  within  the  scope  of  his  authority  as  agent  of  the 
defendants  when  he  promised,  in  their  behalf,  to  pay  the  board  bills. 
All  this  is  elementary  law. 

The  charge  of  the  court  to  the  jury  accords  with  the  foregoing 
views,  and  none  of  the  exceptions  thereto  are  well  taken. 

By  the  Court.    The  judgment  of  the  circuit  court  is  affirmed. 


PICKERT   V.   MAESTON". 

68  Wis.  465.     1887. 

Action  for  price  of  codfish.  Defence,  breach  of  warranty. 
Judgment  for  defendant. 

Cassoday,  J.  The  evidence  is  undisputed  that  the  fish  were  In 
good  condition  when  shipped  to  the  defendants  from  Boston,  and 
worthless  when  they  reached  the  defendants  at  La  Crosse.  The 
defendants  made  the  contract  of  purchase  at  La  Crosse  with  the 
plaintiff's  travelling  salesman,  who  resided  at  Chicago.  There  was 
evidence  tending  to  prove  that  the  fish  shipped  were  not  the  fish 
ordered ;  and  also  that  by  the  terms  of  the  contract  the  fish  ordered 
were  guaranteed  by  the  travelling  salesman  to  reach  the  defendants 
in  La  Crosse  in  good  merchantable  condition.  The  evidence  on  the 
part  of  the  plaintiff  was  to  the  effect  that  the  travelling  salesman 
had  no  authority  to  make  such  guaranty,  nor  any  assurance  as  to 
the  condition  in  which  the  fish  should  be  on  reaching  La  Crosse; 


S24c  PICKEBT    V.   MABSTOK.  [CHAP.   IX. 

and  that  he  so  informed  the  defendants  about  a  month  prior  to  the 
taking  of  the  order  in  question.  The  issue  made  does  not  arise 
between  the  principal  and  agent,  but  between  the  principal  and  the 
defendants  who  made  the  contract  of  purchase  with  the  agent.  The 
agency  and  the  right  to  contract  for  the  sale  are  admitted.  But 
the  authority  to  make  the  guaranty  or  warranty  is  denied.  Beyond 
question,  an  agent  may  bind  his  principal  if  he  does  not  exceed  the 
power  with  which  he  is  ostensibly  invested,  notwithstanding  he  has 
secret  instructions  from  his  principal  to  the  contrary.  Putnam  v. 
French,  53  Vt.  402;  Bentley  v.  Doggett,  51  Wis.  224;  Bouck  v.  Enos, 
61  Wis.  664.  Assuming  that  the  travelling  salesman  had  no  actual 
authority  to  make  such  guaranty  or  warranty  of  the  fish,  then  it 
became  important  to  determine  whether  his  authority  to  sell  or 
contract  for  the  sale  clothed  him  with  an  implied  authority  to  make 
such  guaranty  or  warranty.  "  The  general  rule  is,  as  to  all  contracts, 
including  sales,"  said  a  late  learned  author,  "  that  the  agent  is 
authorized  to  do  whatever  is  vsual  to  carry  out  the  object  of  his 
agency,  and  it  is  a  question  for  the  jury  to  determine  what  is  usual. 
If,  in  the  sale  of  the  goods  confided  to  him,  it  is  usual  in  the  market 
to  give  a  warranty,  the  agent  may  give  that  warranty  in  order  to 
effect  a  sale."  2  Benj.  Sales  (4th  Am.  ed.),  §  945,  p.  824.  The 
text  is  supported  by  the  citation  of  numerous  authorities.  See 
Bayliffe  v.  Butterworth,  1  Exch.  425;  Graves  v.  Legg,  2  Hurl.  & 
N.  210;  Dingle  v.  Hare,  97  Eng.  C.  L.  145;  Upton  v.  Suffolk  Co. 
Mills,  11  Cush.  586,  59  Am.  Dec.  163;  Herring  v.  Skaggs,  62  Ala. 
180,  34  Am.  Rep.  4;  Smith  v.  Tracy,  36  N.  Y.  82;  Ahem  v. 
Goodspeed,  72  N".  Y.  108. 

Thus,  in  Dingle  v.  Hare,  supra,  Erle,  C.  J.,  observed:  "The 
strong  presumption  is  that  when  a  principal  authorizes  an  agent 
to  sell  goods  for  him  he  authorizes  him  to  give  all  such  warranties 
as  are  usually  given  in  the  particular  trade  or  business ; "  and  Byles, 
J.,  added :  "  An  agent  to  sell  has  a  general  authority  to  do  all  that 
is  usual  and  necessary  in  the  course  of  such  employment."  So  in 
Smith  V.  Tracy,  supra.  Porter^  J.,  speaking  for  the  court,  said: 
"  The  rule  applicable  to  such  a  case  is  stated  with  discrimination 
and  accuracy  in  our  leading  text-book  (Parsons)  on  the  law  of  con- 
tracts :  '  An  agent  employed  to  sell,  without  express  power  to  warrant, 
cannot  give  a  warranty  which  shall  bind  the  principal,  unless  the 
sale  is  one  which  is  usually  attended  with  warranty.' " 

Here  the  plaintiff  offered  to  prove,  by  different  witnesses  having 
the  requisite  knowledge,  the  general  custom  of  the  trade  as  known 
and  universally  followed  by  dealers  in  fish,  as  to  their  being  warranted 
or  guaranteed  against  spoiling  or  turning  red  in  transit;  but  it  was 
excluded  and,  as  we  think,  erroneously,  under  the  rules  of  law  above 
stated.  It  would  seem,  however,  that  to  be  binding  upon  the  defend- 
ants, such  custom  should  be  known  to  them  or  exist  in  their  section 


CHAP.   IX.]  SCOPE  OF  PARTICULAK  POWERS.  325 

of  the  country.  Thus,  in  Graves  v.  Legg,  supra,  it  was  said  by 
CocKBURN,  C.  J. :  "  The  only  question  is  whether,  when  a  merchant 
residing  in  London  contracts  with  a  Liverpool  merchant  in  Liver- 
pool, he  is  bound  by  the  usage  of  trade  at  Liverpool.  We  think  that 
as  he  employed  an  agent  at  Liverpool  to  make  a  contract  there,  it 
must  be  taken  to  have  been  made  with  all  the  incidents  of  a  contract 
entered  into  at  Liverpool,  and  one  is  that  notice  to  the  buyer's  agent 
is  notice  to  the  principal." 

By  the  Court.    The  judgment  of  the  circuit  court  is  reversed, 
and  the  cause  is  remanded  for  a  new  trial. 


HEKKING,  et  al.  v.  SKAGGS. 

62  Ala.  180.     1878. 

Action  to  recover  damages  for  breach  of  warranty  of  a  safe.  De- 
fendant's agent  sold  the  safe  to  plaintiff  and  warranted  it  to  be  of 
an  unusually  hard,  tough  iron,  three-eighths  to  one-half  inch  in  thick- 
ness, and  capable  of  resisting  the  efforts  of  a  skilled  burglar,  armed 
with  suitable  implements,  for  twenty-four  hours  or  of  two  so  armed 
for  twelve  hours.  Plaintiff  put  the  safe  in  his  store  and  deposited 
his  money  in  it.  The  safe  was  cut  open  on  the  top  by  burglars  and 
about  $5000  stolen.  The  iron  proved  to  be  very  thin  and  it  appeared 
to  have  been  cut  and  turned  back  as  a  sardine-box  is  turned  when 
opened. 

Demurrers  to  the  complaint  having  been  overruled,  the  case  went 
to  trial  and  the  plaintiff  gave  evidence  as  above. 

Stewart,  the  alleged  agent,  was  then  examined,  and  after  testifying 
to  the  circumstances  of  the  sale,  he  was  asked  by  the  defendants  if 
he  had  any  authority  to  warrant  the  safe  sold  as  burglar-proof.  The 
plaintiff  objected  to  this  question ;  the  court  sustained  the  objection, 
and  defendant  excepted.  The  defendants  then  offered  to  prove  by 
the  witness,  that  he  had  no  authority  to  warrant  the  safe  sold  to 
plaintiff  as  burglar-proof,  or  as  anything  but  an  improved  fire-proof 
safe.  The  plaintiff  objected  to  this  proof,  the  court  sustained  the 
objection,  and  defendants  excepted.  Defendants  then  offered  to  prove 
by  said  witness  that  he  had  present  during  the  negotiations  with 
plaintiff  a  pamphlet  published  by  the  defendants,  containing  an  accu- 
rate description  of  the  sizes  and  qualities  of  the  safes  made  by  them, 
and  the  difference  between  burglar-proof  and  fire-proof  safes,  and  in 
connection  with  this  testimony  offered  the  pamphlet  in  evidence. 
The  plaintiff  objected  to  this  evidence,  the  court  sustained  the  objec- 
tion, and  the  defendants  excepted. 

Verdict  and  judgment  for  plaintiff.    Defendants  appeaL 


326  HERRING,   ET   AL.   V.   SKAGGS.  [CHAP.   IX. 

Stone,  J.  In  Skinner  v.  Gmin,  9  Por.  305,  speaking  of  the  power 
of  an  agent  to  bind  his  principal,  this  court  said :  "  The  power  in 
this  case  is  to  sell  and  convey  the  negro,  in  the  name  of  the  plaintiff, 
and  the  agent  must,  as  an  incident  of  that  power,  and  in  the  absence 
of  any  prohibition,  have  the  right  to  warrant  the  soundness  of  the 
slave,  as  that  is  a  usual  and  ordinary  stipulation  in  such  contracts, 
and  must  therefore  be  implied  to  effectuate  the  object  of  the  power." 
The  court,  in  the  same  case,  had  said :  "  An  authority  to  do  an  act 
must  include  power  to  do  everything  usual  and  necessary  to  its  accom- 
plishment." This  doctrine  was  reaffirmed  in  Gaines  v.  McKinley, 
1  Ala.  446,  and  in  Cocke  v.  Campbell,  13  Ala.  286.  It  will  be  ob- 
served that,  in  these  cases,  the  court  states,  as  matter  of  law,  that 
power  given  to  sell  a  slave  carried  with  it  power  to  warrant  his  sound- 
ness, in  the  absence  of  prohibition.  A  similar  principle  is  found  in 
the  books,  in  reference  to  the  power  of  an  agent  to  bind  his  principal, 
by  warranty  of  the  soundness  of  a  horse  he  is  authorized  to  sell.  It 
is  a  "usual  and  ordinary  stipulation  in  such  contracts,"  say  the 
courts.  Perhaps  the  custom  of  such  warranties  is  so  general,  and 
has  prevailed  so  long,  that  it  has  come  to  be  treated- as  judicial  knowl- 
edge. Certainly  it  was  not  intended  to  be  affirmed,  that  an  agent 
with  general  powers  of  sale  has  unlimited  power  to  bind  his  prin- 
cipal, by  any  and  every  stipulation  the  various  phases  of  traffic  may 
be  made  to  assume.  If  so,  the  words  "  in  the  absence  of  prohibition," 
found  in  the  case  of  Skinner  v.  Gunn,  supra,  are  meaningless  and 
powerless.  In  the  case  of  Fisher  v.  Campbell,  9  Por.  210,  a  question 
arose  on  the  implied  power  of  an  agent  to  bind  his  principal.  That 
was  the  case  of  a  non-resident  planter,  whose  overseer  in  charge  made 
purchases  of  supplies  for  the  plantation  hands.  It  was  proved  that 
the  employer  had  given  the  overseer  instructions  to  purchase  pork 
for  his  slaves  from  a  particular  mercantile  house  at  Montgomery, 
with  whom  he  had  made  arrangements  for  that  purpose,  and  had 
given  him  no  directions  to  buy  anywhere  else,  nor  had  he  any 
authority  to  purchase  from  any  other  person.  The  plantation  was 
in  Lowndes  county,  and,  the  roads  being  bad,  the  overseer  purchased 
pork  in  his  own  county,  much  nearer  to  him,  and  at  Montgomery 
prices.  Commenting  on  a  charge  requested  by  plaintiffs,  and  refused 
by  the  court  below,  this  court  said,  "  The  last  branch  of  the  charge 
is  stated  as  a  corollary  from  the  preceding  propositions ;  '  that  any 
special  directions  given  to  McKay  (the  overseer)  by  the  defendant, 
as  to  the  place  of  purchasing,  was  wholly  immaterial  as  to  this  pur- 
chase, unless  from  the  evidence  they  were  satisfied  that  plaintiffs  were 
informed  at  the  time  of  such  sale  of  such  special  directions;  and 
that  without  this  information  the  plaintiffs  would  be  entitled  to 
recover,  if  the  proof  was  fully  made  out.'  We  understand  the  law 
to  be  the  exact  converse  of  this  proposition.  When  a  person  deals 
with  one  who  professes  to  be  the  agent  of  another  person,  the  person 


CHAP.   IX.]  SCOPE   OF   PARTICULAR  POWERS.  327 

contracting  with  him  is  bound  to  know  the  extent  of  his  authority." 
See  also  McCreary  v.  Slaughter,  57  Ala. 

We  are  not  prepared  to  assent  to  the  doctrine,  in  unlimited  sense, 
that  a  general  agent  to  sell  has,  by  virtue  thereof,  the  power  to  bind 
his  principal  by  every  species  of  warranty  a  purchaser  may  exact. 
In  Benjamin  on  Sales,  §  624,  is  the  following  language :  "  Warranties 
are  sometimes  given  by  agents  without  express  authority  to  that 
effect.  In  such  cases  the  question  arises  as  to  the  power  of  an  agent, 
who  is  authorized  to  sell,  to  bind  his  principal  by  a  warranty.  The 
general  rule  is,  as  to  all  contracts  including  sales,  that  the  agent  is 
authorized  to  do  whatever  is  usual  to  carry  out  the  object  of  his 
agency,  and  it  is  a  question  for  the  jury  to  determine  what  is  usual. 
If  in  the  sale  of  the  goods  confided  to  him  it  is  usual  in  the  market 
to  give  a  warranty,  the  agent  may  give  that  warranty  in  order  to 
effect  a  sale."  We  fully  approve  and  adopt  this  language  of  this 
very  accurate  writer.  We  do  not  intend,  however,  to  overturn  the 
doctrine  declared  in  Skinner  v.  Gunn  and  Cocke  v.  Campbell,  supra. 
As  a  general  rule,  the  agent  has  power  to  do  whatever  is  usual  —  to 
enter  into  such  express  stipulations  as  are  usual  and  customary  —  in 
effecting  such  sales.  What  stipulations  are  usual  and  customary  in 
effecting  such  sales  is  not  always  a  matter  of  judicial  knowledge.  It 
is  declared  in  the  sale  of  slaves  and  horses  to  be  within  the  knowl- 
edge of  the  court  that  it  is  usual  to  give  warranties.  It  cannot  be 
aflfirmed  that  such  custom  exists  in  the  sale  of  all  chattels.  Gener- 
ally, and  we  hold  in  a  sale  like  the  present,  "  it  is  a  question  for  the 
jury  to  determine  what  is  usual."  This,  in  the  absence  of  express 
authority  in  the  agent  to  warrant;  for  if  the  agent  had  such  express 
authority,  then  his  act  is  the  act  of  his  principal.  And,  in  the  absence 
of  express  authority,  the  question  arises,  and  it  is  one  for  the  jury, 
whether  such  warranty  is  customary  in  the  sale  of  safes.  If  the  jury, 
on  the  evidence,  find  there  was  such  custom,  then  the  principal  is 
bound,  "  in  the  absence  of  prohibition "  resting  on  the  agent,  and 
brought  to  the  knowledge  of  the  purchaser,  to  the  same  extent  as  if 
the  principal  himself  had  given  the  warranty.  On  the  other  hand, 
i:^  there  was  no  such  authority  given,  and  no  such  custom  found  to 
exist,  then  the  principal  would  not  be  bound.  True,  if  the  principal 
ratified  the  act  of  such  agent,  although  the  act  itself  had  been  un- 
authorized, this  would  bind  the  principal.  But  the  receipt  of  the 
purchase  money  would  have  no  such  effect,  unless  received  or  retained 
with  knowledge  that  the  agent  had  given  the  warranty. 

The  sale  in  the  present  case  was  made  by  an  agent.  In  the  absence 
of  proof  of  express  authority  to  warrant,  it  was  incumbent  on  the 
plaintiff  to  show  a  custom  in  the  sale  of  safes,  to  warrant  them  as 
burglar-proof.  Either  the  express  authority,  or  the  authority  implied 
from  such  proven  custom,  would  constitute  the  act  of  the  agent  the 
act  of  the  principal;  but  the  law  does  not  imply  the  authority  from 


328  SMITH   V.   TRACY.  [CHAP.   IX. 

the  fact  that  Stewart,  who  conducted  the  sale,  was  a  general  agents 
The  third  count  of  the  complaint  avers  that  the  defendants  "  did 
employ  an  agent,  and  authorized  him  to  sell  such  safes,  and  did  hold 
him  forth  to  the  public  residing  in  and  about  the  town  of  Talladega, 
Alabama,  and  elsewhere,  as  their  general  agent  for  the  sale  of  iron 
Bafes."  This  is  the  entire  averment  of  authority,  and  we  hold  it  in- 
sufficient. It  should  have  been  ai^erred  that  the  agent  had  authority 
to  make  the  warranty.  Being  averred,  proof  of  express  authority, 
or  custom  to  warrant,  would  have  sustained  the  averment.  The 
third  count  is  insufficient,  and  the  demurrer  to  it  should  have  been 
sustained. 

Under  the  principle  above  declared,  it  became  a  material  inquiry 
whether  Stewart  had  express  authority  to  warrant  the  safe  as  burglar- 
proof.  He  should  have  been  permitted  to  prove  he  had  not  such  ex- 
press authority.  True,  this  would  not  necessarily  exonerate  the  de- 
fendants. It  would^bear  on  only  one  phase  of  the  inquiry;  for  if 
such  warranties  are  usual  and  customary  in  the  sale  of  iron  safes, 
then  even  a  prohibition  of  such  authority  to  the  agent  would  amount 
to  nothing,  unless  knowledge  of  guch  prohibition  was  carried  home 
to  the  purchaser  before  the  sale  was  consummated.  So,  if  the  pub- 
lished descriptive  pamphlet  with  which  the  agent  was  furnished 
tended  to  disclose  what  classes  of  safes  were,  and  what  were  not  rep- 
resented as  burglar-proof,  and  such  pamphlet  was  exhibited  to  the 
purchaser  pending  the  negotiation,  then  the  pamphlet  should  have 
been  allowed  to  go  to  the  jury,  as  shedding  some  light  upon  the  con- 
troverted question  of  warranty  vel  non.  .  .  . 

Reversed  and  remanded. 


SMITH   V.   TEACY. 
36  N.  Y.  79.     1867. 

The  action  was  for  breach  of  warranty,  on  the  sale  of  two  hundred 
shares  of  stock,  owned  by  the  late  Albert  H.  Tracy,  in  the  Hollister 
Bank  of  Buffalo,  of  the  nominal  value  of  $10,000.  Tracy  authorized 
Hollister  to  sell  the  stock  for  him.  There  was  no  evidence  of  any 
authority  from  Tracy  to  give  a  warranty,  or  of  any  knowledge  on  his 
part,  then  or  afterward,  that  one  had  been  given.  It  was  proved  that 
it  was  not  usual  to  give  a  warranty  on  the  sale  of  bank  stocks,  and 
the  representations  did  not  purport  to  be  made  in  the  name  of  Mr. 
Tracy. 

The  jury  found  for  the  plaintiff,  and  a  new  trial  was  denied  at 
the  General  Term,  Davis,  J.,  dissenting. 

Porter,  J.    We  concur  with  the  court  below  in  the  opinion  that 

1  But  see  Talmage  v.  Blerhause,  103  Ind.  270,  post,  p.  329. 


CHAP.   IX.]  SCOPE   OF   PARTICULAR   POWERS.  329 

HoUister  had  no  authority  to  warrant  the  stock,  which  his  principal 
empowered  him  merely  to  sell.  The  rule  applicable  to  such  a  case  is 
stated  with  discrimination  and  accuracy  in  our  leading  text-book  on 
the  law  of  contracts:  "An  agent  employed  to  sell,  without  express 
power  to  warrant,  cannot  give  a  warranty  which  will  bind  the  prin- 
cipal, unless  the  sale  is  one  which  is  usually  attended  with  warranty." 
(1  Parsons  on  Contracts,  5th  ed.,  60.)  It  was  proved  that  no  such 
custom  exists  in  connection  with  the  sale  of  bank  stocks,  and  that 
the  special  agent,  in  this  instance,  had  nothing  but  a  naked  authority 
to  sell.  .  .  . 

The  plaintiff  is  chargeable  with  notice  of  the  extent  and  limits  of 
the  power  of  the  special  agent  from  whom  he  purchased.  Nixon  v. 
Palmer,  4  Seld.  398;  Sage  v.  Sherman,  Lalor's  Supp.  147,  152; 
Beals  V.  Allen,  18  Johns.  363,  366.  He  knew  that  Hollister  was  not 
the  owner  of  the  stock  he  assumed  to  sell;  and  he  was  content  to 
take  a  warranty  from  one  who  had  neither  actual  nor  apparent  au- 
thority to  bind  his  principal  by  such  an  engagement.  It  was  a  single 
isolated  transaction,  unaided  by  any  extrinsic  fact  or  any  antecedent 
relation;  and  upon  its  own  merits  it  must  stand  or  fall.  The  sole 
authority  of  Hollister  was  to  sell  the  stock  at  par,  with  interest  from 
the  date  of  the  last  dividend,  and  to  insert  the  name  of  the  purchaser 
in  the  blank,  left  in  the  body  of  the  transfer  written  and  signed  by 
Mr.  Tracy.  The  representations  to  the  plaintiff  were  not  even  made 
in  the  testator's  name;  and  the  purchaser  who  assumed  the  risk  of 
bargaining  without  inquiry  cannot  transfer  to  the  defendant  a  loss 
resulting  from  his  own  neglect  and  incaution. 

The  judgment  should  be  reversed  and  a  new  trial  ordered,  with 
costs  to  abide  the  event. 

All  judges  concurring,  except  Grover^  J.,  who  did  not  vote. 

Judgment  accordingly. 


TALMAGE   v.   BIEEHAUSE. 

103  Ind.  270.     1885. 

Action  for  the  price  of  goods.  Defence,  off-set  for  breach  of 
warranty  of  quality  of  rice  under  a  prior  sale.  The  sale  was  made 
by  a  travelling  salesman  of  the  plaintiffs.  At  the  time  the  order  was 
given,  the  evidence  tended  to  show  that  one  of  the  defendants  in- 
quired of  the  salesman  whether  the  rice  would  keep.  He  replied  that 
"he  would  guarantee  it  to  keep  all  summer  if  kept  in  a  dry,  cool 
place."  The  rice  was  shipped  from  Charleston,  S.  C,  and  received 
by  the  defendants  in  Vincennes,  Ind.,  some  time  during  the  month 
of  April,  1882.    One  barrel  of  it  was  examined  casually  on  its  arrival, 


330  COOLEY   V.   PERRINE.  [CHAP.    IX. 

and  seemed  to  be  all  right,  and  according  to  the  sample  exhibited  at 
the  time  of  the  sale.  The  whole  was  put  in  a  dry,  cool  place,  and  not 
further  examined  until  some  time  in  July  following,  when  it  was 
found  to  be  musty  and  damaged.    Judgment  for  defendants. 

Mitchell,  C.  J.  ...  It  is  next  contended  that  the  evidence  fails 
to  show  that  the  salesman  had  authority  to  make  the  guarantee  which 
the  defendants  claimed  was  made. 

The  inference  to  be  drawn  from  the  argument  of  counsel  is,  that 
it  was  incumbent  on  the  defendants  to  prove  affirmatively,  either  that 
express  authority  to  that  end  had  been  conferred,  or  that  such  sales 
are  usually  attended  with  warranties.  It  may  be  said  that  the  posi- 
tion contended  for  has  the  support  of  authority,  but  the  authorities 
supporting  it  are,  in  the  main,  cases  which  involved  an  agency  to  do 
a  single  act,  as  the  sale  of  some  article  by  an  agent  in  whose  hands 
the  particular  article  was  placed  for  sale.  Andrews  v.  Kneeland, 
6  Cow.  354;  Smith  v.  Tracy,  36  N.  Y.  79;  Cooley  v.  Perrine,  41 
N.  J.  L.  322;  Brady  v.  Todd,  9  C.  B.  (n.  s.)  592. 

We  think  the  rule  generally  prevailing  is,  that  an  agent  upon 
whom  general  authority  to  sell  is  conferred  will  be  presumed  to  have 
authority  to  warrant,  unless  the  contrary  appears.  Authority  to  sell 
generally,  without  any  restrictions,  carries  with  it  prima  facie  author- 
ity to  do  any  act  or  make  any  declaration  in  regard  to  the  subject- 
matter  of  the  sale  necessary  to  consummate  the  contract,  and  usually 
incident  thereto,  and  until  the  contrary  is  made  to  appear,  it  will 
be  presumed  that  a  warranty  is  not  an  unusual  incident  to  a  sale 
by  an  agent  for  a  dealer  in  a  commodity  or  article,  where  the  thing 
sold  is  not  present  and  subject  to  the  inspection  of  the  purchaser. 
Ahern  v.  Goodspeed,  72  N.  Y.  108 ;  Sturgis  v.  N.  J.  Steamboat  Co., 
62  N.  Y.  625;  Nelson  v.  Cowing,  6  Hill,  336;  Schuchardt  v.  Aliens, 
1  Wall.  359 ;  Boothby  v.  Scales,  27  Wis.  626 ;  Howard  v.  Sheward, 
L.  E.  2  C.  P.  148 ;   Deming  v.  Chase,  48  Vt.  382. 

In  all  such  cases,  even  though  the  authority  of  the  agent  is 
restricted  by  instructions  from  his  principal,  he  will  be  bound  by  a 
warranty  attending  a  sale  made  by  the  agent,  unless  the  purchaser 
knew  of  the  restriction.  Murray  v.  Brooks,  41  Iowa,  45.  .  .  . 

Judgment  affirmed. 


COOLEY   V.    PEERINE. 
41  N.  J.  L.  322.     1879. 

Action  on  a  note  given  for  the  price  of  a  horse.  Defence,  breach 
of  warranty  of  soundness  of  horse.  The  horse  was  sold  to  defendant 
by  plaintiff's  agent  who  was  given  special  authority  to  sell  this  one 
horse  to  this  defendant  for  $150.    Exception  was  taken  to  the  refusal 


CHAP.    IX.]  SCOPE  OF  PAETICDLAR   POWERS.  331 

of  the  court  to  charge  that  "  the  servant  of  a  private  owner,  intrusted 
to  sell  and  deliver  a  horse  on  a  particular  occasion,  is  not,  by  law, 
authorized  to  bind  his  master  by  a  warranty." 

Dixon,  J.  ...  In  a  sale  of  a  horse,  subject  to  the  buyer's  inspec- 
tion, no  warranty  of  quality  is  implied,  and  it  seems  a  short  and 
clear  deduction  of  reasoning  thence  to  conclude  that  in  an  authority 
to  make  such  a  sale,  no  authority  so  to  warrant  is  implied.  The  war- 
ranty is  outside  of  the  sale,  and  he  who  is  empowered  to  make  the 
warranty  must  have  some  other  power  than  that  to  sell.  Accordingly, 
in  Brady  v.  Todd,  9  C.  B.  (n.  s.)  593,  the  court  directly  decided  that 
the  servant  of  a  private  owner,  intrusted  by  his  master  to  sell  and 
deliver  a  horse  on  one  occasion,  is  not,  hy  law,  authorized  to  bind 
his  employer  by  a  warranty  of  quality,  but,  to  do  so,  authority  in  fact 
must  be  shown.  The  significant  circumstances  of  that  case  were  pre- 
cisely like  those  in  this,  and  Chief  Justice  Erle  points  out  the  sound- 
ness, both  in  law  and  policy,  of  the  rule  there  applied.  .  .  . 

[The  court  cites  and  discusses  Fenn  v.  Harrison,  3  T.  E.  757; 
Helyear  v.  Hawke,  5  Esp.  72 ;  Alexander  v.  Gibson,  2  Camp.  555.] 

For  these  dicta  and  decisions  no  authority  is  cited.  Chief  Justice 
Erle  says,  in  Brady  v.  Todd,  ubi  supra,  that  he  understands  these 
judges  to  refer  to  a  general  agent  employed  for  a  principal  to  carry 
on  his  business  of  horse  dealing.  Certainly  if  the  ruling  in  Alex- 
ander V.  Gibson  had  regard  to  a  particular  agent,  it  has  not  been  fol- 
lowed to  the  extent  to  which  it  was  there  carried.  No  other  case 
holds  that  such  an  agent  could  bind  his  principal  by  a  warranty  ex- 
pressly interdicted.  But  to  the  extent  of  holding  that  a  special  agent 
might  warrant  if  not  forbidden,  these  observations  have  formed  the 
foundation  of  some  judicial  assertions  and  adjudications.  .  .  . 

[The  court  cites  and  discusses  Lane  v.  Dudley,  2  Murph.  119 
Skinner  v.  Gunn,  9  Porter,  305;    Gaines  v.  McKinley,  1  Ala.  446 
Cocke  V.  Campbell,  13  Ala.  286 ;    Bradford  v.  Bush,  10  Ala.  386 
Ezell  V.  Franklin,  2  Sneed,  236;  Tice  v.  Gallup,  2  Hun,  446;   Nel- 
son V.  Cowing,  6  Hill,  336.] 

These  are  the  only  cases  I  have  found  wherein  it  has  been  decided 
that  an  authority  to  a  special  agent  to  sell  embraces  an  authority  to 
warrant  quality.  Resting,  as  they  all  do,  either  directly  or  indirectly 
on  Fenn  v.  Harrison,  Helyear  v.  Hawke,  and  Alexander  v.  Gibson, 
they  no  longer  have  any  foundation  on  authority,  since  these  three 
cases,  if  they  ever  applied  to  a  special  agency,  are  now,  in  that  re- 
spect, distinctly  overruled  by  Brady  v.  Todd,  uhi  supra;  a  decision 
foreshadowed  by  Creswell,  J.,  when,  in  Coleman  v.  Riches,  16  C.  B. 
104,  113  (1855),  he  asked  counsel,  citing  2  Camp.  555,  "would  you 
hold  that  to  be  good  law  at  the  present  day  ?  "  and  clearly  approved 
as  correct  in  principle  in  Udell  v.  Atherton,  7  H.  &  N.  170. 

Nor  have  they  any  better  basis  on  principle  than  on  authority. 
Their  underlying  principle  is  said  to  be  that  the  agent,  being  em- 


332  COOLEY   V.   PERRINE.  [CHAP.    IX. 

powered  to  sell,  is  intrusted  with  all  the  powers  proper  for  effectuat- 
ing the  sale,  and  a  warranty  of  quality  is  both  a  proper  and  a  usual 
power  for  that  purpose.  If  by  this  were  meant  that  the  agent  is 
intrusted  with  all  the  powers  proper  to  the  making  of  an  effectual 
sale,  its  accuracy  could  not  be  questioned.  Undoubtedly  his  author- 
ity extends  to  whatever  is  proper  to  be  done  in  fixing  the  price,  and 
the  time  and  mode  of  payment,  and  the  time  and  mode  of  vesting 
the  title  and  delivering  the  chattel.  All  these  things  are  incident  to 
the  sale.  But  if  the  expression  mean  that  the  agent  is  intrusted  with 
all  the  powers  convenient  for  the  purpose  of  inducing  the  purchaser 
to  buy,  even  to  the  extent  of  enabling  him  to  make  collateral  con- 
tracts to  that  end,  then  I  think  it  is  in  violation  of  the  settled  ride 
that  the  special  agent  must  be  confined  strictly  to  his  express  author- 
ity, and  is  in  opposition  to  well-considered  and  authoritative  decisions. 
For  example,  it  might  very  much  facilitate  the  sale  if  the  agent 
could  endorse  the  vendee's  note  for  the  purpose  of  raising  the  money 
to  pay  the  price,  and  such  an  exercise  of  power  would  jeopardize  the 
principal  no  more  than  would  a  sale  on  credit,  and  very  much  less 
than  might  a  warranty  of  quality ;  and  yet  I  imagine  that  a  special 
agent  could  not  make  such  an  endorsement  binding  on  his  employer, 
for  in  Gulik  v.  Grover,  4  Vroom,  463,  the  court  of  errors  held  that 
even  a  general  agent  had  no  authority  so  to  endorse,  to  enable  his 
principal's  debtor  to  borrow  money  to  pay  the  debt.  So  in  Upton  v. 
Suffolk  County  Mills,  11  Cush.  586,  it  was  adjudged  that  even  a 
general  agent  for  the  sale  of  flour  could  not  warrant  that  it  would 
keep  good  during  a  voyage  to  California.  And  in  Bryant  v.  Moore, 
26  Vt.  84,  a  warranty  of  oxen  by  a  special  agent  empowered  to  ex- 
change was  held  invalid  against  the  principal.  Likewise,  in  Lips- 
comb V.  Kitrell,  11  Humph.  256,  it  was  decided  that  an  authority  to 
sell  a  claim  confers  no  authority  to  guarantee  it  —  that  such  a  guar- 
antee is  not  a  necessary  incident  of  the  sale;  and  a  similar  con- 
clusion was  reached  as  to  bank  stock,  in  Smith  v.  Tracy,  36 
N.  Y.  79.  .  .  . 

Nor  do  I  see  the  propriety  of  asserting,  as  a  matter  of  law,  that  a 
warranty  of  quality  is  a  usual  means  of  effecting  the  sale  of  a  chattel 
by  a  private  person,  i.  e.,  one  not  a  tradesman  in  the  line  of  the  sale, 
or  that  it  is  even  a  usual  attendant  upon  such  a  sale.  Such  warran- 
ties may  be  as  various  as  the  qualities  of  the  object  sold,  and  to  de- 
termine, as  by  a  rule  of  law,  which  are  usual  and  which  are  not, 
will  involve  the  courts  in  discussions  where  the  personal  experience 
of  judges  must  have  more  influence  than  legal  principles.  In  every 
such  case  the  question  of  usage  should  be  regarded  as  one  of  fact 
and  not  of  law.  .  .  . 

In  the  present  suit  I  think  that  the  unauthorized  warranty,  in- 
ferred from  the  honest  statement  of  the  agent  that  the  horse  was  all 
right,  not  communicated  to  the  vendor  or  his  representatives  until 


CHAP.   IX.]  SCOPE  OF  PARTICULAR  POWERS.  333 

after  the  horse  was  delivered  to  and  had  died  in  the  possession  of  the 
vendee,  formed  no  defence  to  the  claim  for  the  price,  and  that  the 
appellee's  prayer  for  instructions  to  the  jury  was  justified  by  the  facts 
and  the  law,  and  should  have  been  granted.  Its  refusal  was  error, 
for  which  the  judgment  should  be  reversed,  with  costs. 

The  cause  may  be  remitted  to  the  common  pleas  for  a  new  trial.* 


TICE   V.    GALLUP. 

2  Hun    (N.  Y.)  446.     1874. 

Appeal  from  a  judgment  in  favor  of  the  plaintiff.  The  facts  are 
stated  in  the  opinion. 

Gilbert,  J.  Action  for  a  breach  of  warranty,  on  sale  of  a  horse 
by  defendant  through  an  agent  named  Burgo.  The  authority  to 
Burgo  was  to  sell  the  horse  if  he  got  sixty  dollars.  Burgo  sold  to 
plaintiff  for  that  price,  and  induced  the  plaintiff  to  purchase  by  rep- 
resenting, among  other  things,  that  the  horse  was  only  eleven  years 
old,  whereas  he  was  fifteen ;  that  a  lameness  which  he  had  came  from 
a  kick,  whereas  it  was  caused  by  a  bone  spavin.  No  question  is  made 
that  these  representations  amounted  to  a  warranty,  or  that  there  was 
a  breach.  The  plaintiff  recovered  judgment,  which  was  afiirmed  by 
the  County  Court.  The  error  complained  of  is,  that  a  question  put 
to  the  defendant  when  testifying  on  his  own  behalf,  viz.,  whether  he 
instructed  Burgo  to  make  the  representations  which  constitute  the 
warranty,  was  excluded.  We  perceive  no  error.  Whether  Burgo  was 
a  general  or  special  agent,  he  had  authority  to  make  the  representa- 
tions, by  virtue  of  his  agency  to  sell,  unless  he  was  forbidden  to  do 
so  by  his  principal.  Nelson  v.  Cowing,  6  Hill,  336 ;  Story  on  Agency, 
137.  The  question  was  irrelevant.  A  specific  authority  to  warrant 
is  not  necessary.    The  judgment  must  be  affirmed. 

Judgment  affirmed.'^ 

>  Affirmed  42  N.  J.  L.  623. 

»  Accord:    Scott  v.  McGrath,  7  Barb.    (N.  T.)   53. 

"  True  there  Is  no  direct  proof  that  David  had  authority  to  warrant  the  pumps, 
or  make  any  representation  concerning  their  quality  or  condition.  But  a  warranty 
—  and  so  of  a  representation  —  Is  one  of  the  usual  means  for  effecting  the  sale  of  a 
chattel :  and  when  the  owner  sells  by  an  agent,  It  may  be  presumed.  In  the  absence  of 
all  proof  to  the  contrary,  that  the  agent  has  been  clothed  with  all  the  usual  powers 
for  accomplishing  the  proposed  end.  So  long  as  the  agent  is  acting  within  the  gen- 
eral scope  of  his  authority,  persons  dealing  with  him  are  considered  as  dealing  with 
the  principal.  I  will  not  stop  to  inquire  whether  David  is  to  be  regarded  as  a  gen- 
eral or  special  agent ;  for  If  he  was  only  a  special  agent,  his  authority  to  warrant 
the  quality  or  condition  of  the  thing  sold  would  be  presumed,  until  the  contrary 
appeared.  Fenn  v.  Harrison,  4  T.  R.  177  ;  Sandford  v.  Handy,  23  Wend.  260.  The 
plaintiffs  rely  on  Gibson  v.  Colt,  7  John.  390 ;  but  that  case  was  much  shaken.  If 
not  entirely  overthrown,  by  the  decision  in  Sandford  v.  Handy ;  which  Is  also  an 
authority  for  saying,  that  the  principal  will  be  affected  by  the  fraudulent  representa- 
tions of  the  agent  making  the  sale."    Nelson  v.  Cowing,  6  Hill,  338. 

"  Bound  &  Co.,  being  his  agents  to  sell  the  notes  without  expressed  restrictions  of 
their  powers,  had  authority  to  do  any  act,  or  make  any  declaration  in  regard  to 


334  CAESTENS'i;.   McREAVY.  [CHAP.   iXl, 


CAESTENS   V.   McEEAVY. 
1  Wash.  359.     1890. 

Action  to  compel  a  specific  performance  of  an  alleged  agreement 
to  sell  and  convey  certain  real  estate  in  the  city  of  Seattle,  King 
County,  State  of  Washington. 

Stiles,  J.  .  .  .  The  appellant  was  the  owner  of  certain  real  prop- 
erty in  the  city  of  Seattle,  and  the  court  found  that  at  a  certain  date 
agents  named,  who  were  real  estate  agents  in  Seattle,  "  were  the 
agents  of  defendant  for  the  sale  of  the  aforesaid  real  estate,  and  were 
then  and  there  duly  authorized  and  empowered  by  the  defendant,  by 
writing  under  the  defendant's  hand,  to  make  and  negotiate  a  sale  of 
said  real  estate."  The  agents  thus  authorized,  executed  and  deliv- 
ered to  the  appellee  a  contract  of  sale  for  the  appellant's  property, 
without  his  knowledge,  and  in  his  absence  from  the  state,  and  re- 
ceived a  portion  of  the  purchase  money.  Appellant  refused  to  recog- 
nize the  contract  thus  made,  claiming  that  the  authority  by  him 
given  to  sell  did  not  include  the  authority  to  execute  a  contract, 
or  anything  more  than  to  find  a  purchaser.  This  was  the  vital  point 
in  the  case,  upon  which  the  court  held  with  the  appellee,  and  directed 
that  the  contract  thus  made  be  performed. 

The  statute  of  frauds  may  be  satisfied  by  the  execution  of  a  con- 
tract for  the  sale  of  lands  by  the  hand  of  another  person  than  the 

them,  found  necessary  to  make  a  sale,  and  usually  incidental  thereto.  Andrews  v. 
Kneeland,  6  Cow.  354 ;  Nelson  v.  Cowing,  6  Hill,  336 ;  Sturgls  v.  N.  J.  St.  Bt.  Co., 
62  N.  Y.  625."    Ahem  v.  Goodspeed,  72  N.  Y.  108,  114. 

"  Whatever  may  be  the  law  in  regard  to  the  customary  power  of  an  agent  to 
warrant  the  article  which  he  sells,  there  is  no  case  which  I  have  found  after  con- 
siderable search  in  which  it  has  ever  been  held  that  an  agent  to  sell  a  particular 
article  has  the  right  not  only  to  warrant  the  article  which  he  then  sells,  but  to 
warrant  all  which  may  thereafter  be  sold  by  his  principals  to  the  party  with  whom 
he  closes  his  own  sale.  There  is  no  principle  upon  which  such  a  claim  can  be 
founded.  The  idea  upon  which  is  founded  the  right  to  warrant  on  the  part  of  an 
agent  to  sell  a  particular  article,  is  that  he  has  been  clothed  with  power  to  make  all 
the  common  and  usual  contracts  necessary  or  appropriate  to  accomplish  the  sale  of 
the  article  entrusted  to  him.  And  if  in  the  sale  of  that  kind  or  class  of  goods  thus 
confided  to  him  it  is  usual  in  the  market  to  give  a  warranty,  the  agent  may  give 
that  warranty  in  order  to  effect  a  sale,  and  the  law  presumes  that  he  has  such 
authority.  .  .  . 

"  But  nowhere  is  there  any  rule  laid  down  that  I  have  been  able  to  find,  enlarging 
the  scope  of  the  agent's  power  to  warrant  beyond  the  necessities  of  the  case,  or  so 
as  to  include  subsequent  sales  not  made  by  himself,  but  by  his  principals.  It  would, 
in  my  opinion,  be  granting  an  agent  altogether  too  broad  a  power,  and  it  would  be 
placing  the  principal  too  much  at  the  mercy  of  the  agent  who,  for  the  purpose  of 
accomplishing  a  sale  of  a  small  amount,  might  lead  his  principals  into  liabilities  of 
which  they  knew  nothing  and  might  know  nothing  until  a  claim  for  their  settlement 
was  presented  to  them.  It  is  not  necessary  to  grant  to  agents  any  such  extensive 
powers  in  order  that  they  may  accomplish  the  purpose  for  which  they  are  engaged, 
viz. :  the  present  sale  by  them  of  an  article  which  belongs  to  the  principal.  Public 
policy,  I  think,  forbids  any  such  Inferential  powers,  and  if  vendees  seek  to  place 
liabilities  of  that  nature  upon  principals,  it  is  not  too  much  to  require  that  they 
should  show  actual  authority  of  the  agent  to  make  such  contracts."  Peckham,  J.,  in 
Wait  V.  Borne,  123  N.  Y.  592,  603,  604. 


CHAP.   IX.]  SCOPE   OF   PARTICULAE  POWERS.  335 

party  to  be  charged,  if  that  person  be  thereunto  lawfully  authorized, 
and  it  is  well  settled  that  such  third  person  may  be  thus  lawfully 
authorized  orally,  by  written  direction  not  under  seal,  and,  even,  by 
a  course  of  conduct  amounting  to  an  estoppel.  It,  therefore,  only 
remains  to  determine  whether  the  ordinary  real  estate  agent  or  broker, 
authorized  to  sell  land,  is  thereby  empowered  to  enter  into  a  contract 
binding  upon  his  principal  in  an  action  for  specific  performance. 
A  real  estate  agent  is  a  person  who  is,  generally  speaking,  engaged 
in  the  business  of  procuring  purchases  or  sales  of  lands  for  third 
persons  upon  a  commission  contingent  upon  success.  He  owes  no 
affirmative  duty  to  his  client,  is  not  liable  to  him  for  negligence  or 
failure,  and  may  recede  from  his  employment  at  will,  without  notice. 
On  the  other  hand,  courts  almost  unanimously  unite  in  holding  that 
in  case  of  an  ordinary  employment  to  sell,  once  he  has  procured  a 
party  able  and  willing  to  buy,  upon  the  terms  demanded  by  his  prin- 
cipal, and  has  notified  him  of  the  purchaser's  readiness  to  buy,  the 
agent's  work  is  ended  and  he  is  entitled  to  his  commission.  It  is 
not  his  duty  to  procure  a  contract  or  make  one,  and  he  is  not  in 
default  if  he  fails  to  do  either.  Therefore  to  our  mind  it  seems  clear 
that  ordinarily  it  is  not  within  the  contemplation  of  the  owner  and 
agent,  where  property  of  this  character  is  placed  in  the  hands  of  the 
latter  for  sale,  that  he  shall,  without  consultation  with  his  client, 
execute  a  contract.  We  are  aware  that  courts  have  held  to  this  ex- 
tent, basing  their  decisions  upon  a  distinction  between  an  authority 
to  sell  and  an  authority  to  find  a  purchaser,  and  upon  the  well-known 
rule  that  an  authority  to  an  agent  to  do  a  thing  is  presumed  to  in- 
clude all  the  necessary  and  usual  means  of  executing  it  with  effect. 
But  such  holdings  do  not  commend  themselves  to  our  judgment,  and, 
as  this  is  a  new  question  in  this  state,  and  we  are  satisfied  that  it  is 
not  the  general  practice  of  agents  to  make  such  contracts,  we  do  not 
hesitate  to  dissent  from  the  decisions  above  mentioned,  especially  as 
there  is  no  lack  of  authority  for  the  position  we  take.  We  cannot 
shut  our  eyes  to  the  obvious  defect  in  the  argument  that  authority 
to  sell,  in  this  instance,  necessarily  implies  authority  to  execute  a 
contract.  A  sale  of  land,  "executed  with  effect,"  includes  the  exe- 
cution of  a  deed  and  the  delivery  of  possession,  neither  of  which  the 
agent  can  do,  unless  his  authority  to  sell  is  supplemented  by  the 
delivery  of  possession  to  him  and  a  power  of  attorney  to  convey.  So 
that  he  does  not,  although  in  possession  of  the  authority  to  sell,  have 
all  the  necessary  means  of  executing  that  authority  with  final  effect. 
He  stops  short  somewhere,  and  when  we  are  inquiring  where  the 
probable  and  proper  place  of  his  stoppage  is,  the  evils  that  would 
attend  the  extension  of  his  actual  authority  beyond  the  finding  of  a 
purchaser,  furnish  ample  reason  for  fixing  his  limit  there.  An 
agency  of  this  kind  may  be  created  by  the  slightest  form  of  words, 


336  CARSTENS   V.    McREAVY.  [CHAP.   IX. 

without  any  writing,  leaving  it  to  litigation  to  determine  whether 
the  substance  of  the  authority  is  "  to  sell "  or  "  to  find  a  purchaser," 
wherein  the  unscrupulous  and  dishonest  agent  would  be  at  once 
arrayed  as  the  principal  witness  against  his  client,  with  every  ad- 
vantage, from  some  note,  "  made  at  the  time,"  of  what  the  instruc- 
tion was.  Perjury  would  go  at  a  premium  in  such  cases,  and  the 
confiding  and  unlettered  would  be  its  victims.  Scarcely  any  man, 
when  listing  his  property  with  a  real  estate  agent,  stops  to  give  de- 
tails as  to  the  property  itself  or  as  to  the  arrangements  he  desires 
to  make,  yet  no  one  would  sell  upon  equal  terms  to  a  first  class  busi- 
ness man  and  to  an  habitual  drunkard  or  well  known  insolvent;  and 
the  ordinary  owner  would  not  sell  at  all  to  a  person  whose  very  occu- 
pancy would  tinge  the  neighborhood  with  a  bad  repute.  These  are 
good  reasons,  and  are,  probably,  some  of  the  reasons  why  custom  and 
law  have  made  it  not  necessary  that  real  estate  agents  should  actu- 
ally procure  contracts  in  order  to  earn  their  compensation ;  and  why, 
in  this  connection,  the  common  understanding  of  the  phrase  "  au- 
thority to  sell "  means  only  authority  to  find  a  purchaser,  whether 
the  authority  be  given  orally  or  by  written  request. 

In  considering  this  case  we  have  examined  the  numerous  authori- 
ties cited  by  both  sides,  as  well  as  many  others,  and  find  the  position 
we  take  fully  sustained  by  Morris  v.  Euddy,  20  N.  J.  Eq.  236 ;  Milne 
V.  Kleb,  44  N.  J.  Eq.  378;  Duffy  v.  Hobson,  40  Cal.  240;  Arm- 
strong V.  Lowe,  76  Cal.  616;  Mechem  on  Agency,  §  966;  Warvelle 
on  Vendors,  213;  2  Am.  and  Eng.  Ency.  Law,  p.  573,  note  2.  The 
earlier  cases  in  New  York  were  to  the  same  effect,  notably :  Coleman 
V.  Garrigues,  18  Barb.  60,  and  Glentworth  v.  Luther,  21  Barb.  145; 
but  they  were  overthrown  by  Haydock  v.  Stow,  40  N.  Y.  363,  with- 
out sufficient  reason,  as  it  seems  to  us.  We  note  that  in  nearly  if 
not  all  the  states  where  the  courts  at  any  time  held  agents  to  sell 
Teal  estate  authorized  to  execute  contracts  of  sale,  especially  in  New 
York  and  Illinois,  the  legislatures  very  soon  after  amended  the 
statutes  of  frauds  so  as  to  require  the  agent's  authority  to  contract 
to  be  in  writing. 

Lyon  V.  Pollock,  99  U.  S.  668,  presents  a  state  of  facts  not  found, 
to  any  extent  whatever,  in  the  case  at  bar,  and  is,  therefore,  not 
applicable,  and  the  same  may  be  remarked  of  Eutenberg  v.  Main^ 
47  Cal.  213.  What  a  broker  must  do  to  "complete  a  sale"  is  well 
defined  in  McGravock  v.  Woodlief,  20  How.  221,  thus:  "The  broker 
must  complete  the  sale;  that  is,  he  must  find  a  purchaser  in  a  situa- 
tion and  ready  and  willing  to  complete  the  purchase  on  the  terms 
agreed  on,  before  he  is  entitled  to  his  commission,"  Per  contra,  if 
the  broker  has  "  completed  the  sale  "  so  as  to  be  entitled  to  his  com- 
missions, by  finding  a  purchaser,  without  a  contract,  his  duty  is 
thereby  performed  and  his  authority  exhausted. 


CHAP.    IX.]  SCOPE   OF   PARTICULAR  POWERS.  337 

The  judgment  of  the  court  below  must  be  reversed,  and  the  action 
dismissed.    Costs  to  the  appellant. 
Anders,  C.  J.,  and  Hoyt,  Dunbar,  and  Scott,  JJ.,  concur.' 


McCTJLLOUGH   v.   HITCHCOCK. 

71  Conn.  401.     1899. 

Suit  for  specific  performance.    Judgment  for  defendant. 

The  complaint  alleged  that  the  defendant,  on  the  seventh  day  of 
July,  1897,  acting  by  his  agents  and  brokers,  Anderson  &  Mead, 
agreed  in  writing  to  convey  to  her,  free  from  incumbrances,  certain 
lands  in  consideration  of  $1,100;  that  the  plaintiff  tendered  said 
sum  to  the  defendant,  but  that  he  refused  to  convey  said  land;  and 
claimed  a  decree  for  a  conveyance,  or  that  the  title  be  otherwise  vested 
in  the  plaintiff,  and  damages. 

The  answer  denied,  in  substance,  all  the  complaint,  and  specifically 
denied  that  Anderson  &  Mead  were  his  agents;  and  asserted  that  if 
they  had  ever  made  any  such  contract  with  the  plaintiff  as  she 
claimed,  they  had  no  authority  therefor  from  the  defendant. 

The  court  found  the  issues  for  the  defendant,  and  the  plaintiff 
appealed. 

Upon  the  trial  of  the  cause  the  plaintiff,  to  prove  the  averment  of 
her  complaint,  offered  in  evidence  a  certain  letter  as  follows: 

AiTSONiA,  CoNii.,  November  23,  1896. 
Messrs.  Axdebson  k  Mead,  Bridgeport,  Conn. 

Gentlemen,  —  I  have  a  building  lot  on  William  St.,  E.  D.,  that  I  would 
like  to  sell  if  I  can  do  so  at  any  advantage.  It  is  located  next  to  the  resi- 
dence of  S.  W.  Hubbell,  268  Wm.  St.  As  I  am  not  a  resident  of  Bpt.  I  do 
not  know  the  value  of  said  lot,  but  could  you  not  look  at  the  lot  and  give 
me  an  idea  of  its  value  and  if  possible  find  a  purchaser  for  same. 

lours  truly, 

M.  C.  HrrcHOocK. 

It  was  admitted  that  the  defendant  was  the  owner  of  the  land,  and 
that  Anderson  &  Mead  were  real  estate  agents  or  brokers. 

Andrews,  C.  J.  Anderson  &  Mead  had  no  authority  to  make  a 
written  contract  binding  on  the  defendant  to  convey  the  land  in  ques- 
tion, unless  it  can  be  found  in  the  letter  of  November  23d,  1896. 
That  letter  does  not  in  terms  purport  to  give  any  such  authority. 
The  contention  of  the  plaintiff  is  that  such  authority  is  implied 

'  Accord  :   Donnan  v.  Adams,  30  Tex.  Clv.  App.  615. 

In  the  following  cases  the  authority  to  sell  was,  under  the  circumstances,  held  to 
carry  with  It  the  power  to  execute  a  contract  of  sale.  Valentine  v.  Piper,  22  Pick. 
85  (principal  in  England  and  agent  authorized  to  collect  and  disburse  proceeds  of 
sale)  ;  Lyon  v.  Pollock,  99  U.  S.  668  (principal  a  fugitive)  ;  Ish  v.  Crane,  13  Oh. 
St.  574. 

22 


338  WILLIAM   DEERING   &   CO.    V.   KELSO.  [CHAP.    IX. 

from  the  request  in  the  letter  to  find  a  purchaser;  that  it  is  a  cus- 
tom of  the  real  estate  business  that  a  broker  authorized  to  find  a 
purchaser  for  lands  may  sign  a  binding  contract  for  the  sale  of  that 
land.  We  do  not  understand  any  such  custom  to  exist  in  this  State. 
A  custom  can  exist  only  as  a  matter  of  fact.  Smith  v.  Phipps,  65 
Conn.  302,  307.  There  is  no  finding  that  any  such  custom  prevails 
in  Connecticut;  and  there  is  no  case  cited  which  recognizes  any 
such  rule. 

A  real  estate  broker  or  agent  is  one  who  negotiates  the  sales  of 
real  property.  His  business,  generally  speaking,  is  only  to  find  a  pur- 
chaser who  is  willing  to  buy  the  land  upon  the  terms  fixed  by  the 
owner.  He  has  no  authority  to  bind  the  principal  by  signing  a  con- 
tract of  sale.  A  sale  of  real  estate  involves  the  adjustment  of  many 
matters  besides  fixing  the  price.  The  delivery  of  the  possession  has 
to  be  settled;  generally  the  title  has  to  be  examined;  and  the  con- 
veyance with  its  covenants  is  to  be  agreed  upon  and  executed  by  the 
owner.  All  of  these  things  require  conferences,  and  time  for  com- 
pletion. These  are  for  the  determination  of  the  owner,  and  do  not 
pertain  to  the  duties  and  are  not  within  the  authority  of  a  real  estate 
agent.  For  these  obvious  reasons,  and  others  which  might  be  sug- 
gested, it  is  a  wise  provision  of  the  law  which  withholds  from  such 
an  agent,  as  we  think  it  does,  any  implied  authority  to  sign  a  con- 
tract of  sale  in  behalf  of  his  principal.  Coleman  v.  Garrigues,  18 
Barb.  (N.  Y.)  60  i;  Eoach  v.  Coe,  1  E.  D.  Smith  (K  Y.),  175; 
Lindley  v.  Keim,  54  N.  J.  Eq.  418,  423 ;  Duffy  v.  Hobson,  40  Cal. 
240;  4  Amer.  &  Eng.  Ency.  of  Law  (2d  ed.),  964,  note;  3  Waifs 
Actions  &  Defenses,  286,  287;  Halsey  v.  Monteiro,  92  Va.  581; 
Armstrong  v.  Lowe,  76  Cal.  616. 

There  is  no  error.    In  this  opinion  the  other  judges  concurred. 


WILLIAM   DEEEING   &   CO.   v.   KELSO. 

74  Minn.  41.     1898. 

Buck,  J.  The  plaintiff  is  a  non-resident  corporation,  created  un- 
der the  laws  of  the  State  of  Illinois,  and  engaged  in  the  manufacture 
and  sale  of  harvesting  machinery  and  other  farm  implements.  The 
defendants  are  co-partners  and  bankers  at  the  village  of  Hallock, 
Kittson  County.    On  January  16,  1895,  one  B.  P.  Lewis,  a  collector 

*  "  An  agent  authorized  to  sell  either  real  or  personal  estate  may  enter  Into  a  con- 
tract, within  the  terms  of  his  authority,  which  will  bind  his  principal.  This  is  of 
the  very  essence  of  the  authority  given,  viz.,  an  authority  to  sell.  That  he  can  bind 
bis  principal  by  a  formal  contract  is  the  doctrine  of  the  books  from  the  earliest  law 
on  the  subject.  (Worrall  v.  Munn,  1  Seld.  229,  and  the  numerous  cases  cited ;  Mc- 
Whorter  v.  Baldwin,  10  Paige,  386;  Champlin  v.  Parrish.  11  Paige,  411;  Story  on 
Agency,  §§  58,  60.)  The  case  of  Coleman  v.  Garrigues  (18  Barb.  60),  to  the  con- 
trary was  not  well  decided,"    Haydock  v.  Stow,  40  N.  Y.  363,  368. 


CHAP.   IX.]  SCOPE   OF  PARTICULAR   POWERS.  339 

for  the  plaintiff,  went  to  the  firm  of  Westerson  &  Johnson,  in  Hal- 
lock,  and  received  from  this  firm  a  bank  check  for  the  sum  of  $200, 
dated  on  that  day,  and  payable  to  plaintiff  or  order,  drawn  on  the 
defendants,  in  part  payment  of  a  debt  then  due  and  owing  from  said 
firm  to  the  plaintiff.  Lewis,  instead  of  transmitting  this  check  to 
the  plaintiff,  residing  in  the  State  of  Illinois,  took  the  same  to  the 
banking  house  of  the  defendants,  and  then  indorsed  upon  the  back 
of  the  check  the  words  "  William  Deering  &  Co.,  by  B.  P.  Lewis  " 
(the  name  of  the  plaintiff),  and  received  from  the  defendants,  in 
exchange  for  said  check,  a  draft  payable  to  himself  or  order,  on  Gil- 
man,  Son  &  Co.,  of  New  York,  for  $199.80,  issued  by  the  defendants. 
Lewis  collected  the  proceeds  of  the  draft,  and  absconded.  He  never 
paid  to  plaintiff  any  part  of  the  proceeds  so  collected,  and  never 
made  any  report  to  plaintiff  of  such  collection.  When  the  plaintiff 
was  informed  of  the  transaction,  it  caused  a  demand  to  be  made  on 
the  defendants  for  the  payment  to  it  of  the  amount  of  said  check  so 
indorsed  by  Lewis.  The  defendants  refused  to  pay  the  same.  In 
the  meantime  the  defendants  charged  the  account  of  Westerson  & 
Johnson  with  the  amount  of  said  check,  and  stamped  upon  its  face 
that  the  same  had  been  paid.  Upon  defendants'  refusal  to  pay  the 
amount  of  the  check,  the  plaintiff  brought  this  action  for  the  recovery 
thereof,  and  upon  trial  the  defendants  had  a  verdict,  and,  from  the 
judgment  entered  thereon,  the  plaintiff  appeals  to  this  court. 

It  quite  conclusively  appears  that  Lewis,  as  collector  for  the  plain- 
tiff, was  authorized  to  make  collections  in  money,  or  to  receive  what 
are  commonly  called  "  bank  checks,"  conditioned,  however,  that  they 
were  payable  to  the  order  of  William  Deering  &  Co. ;  and,  upon  the 
receipt  of  such  checks,  it  was  his  duty  to  send  these  identical  checks 
forthwith  to  plaintiff  for  indorsement  and  collection,  through  the 
clearing  house  and  other  banks.  Lewis  never  had  any  express  au- 
thority to  indorse  or  collect  the  checks  after  they  were  received  by 
him;  and  it  is  a  well  established  general  rule  of  commercial  law, 
applicable  to  all  cases  of  implied  agencies,  that  no  authority  will  be 
implied  from  an  express  authority,  unless  it  is  positively  needful  for 
the  performance  of  the  main  duties  contemplated  by  the  express 
authority.  Tiedman,  Com.  Paper,  §  77,  and  authorities  cited;  Jack- 
son V.  Bank,  92  Tenn.  154,  20  S.  W.  802. 

In  this  case  no  such  necessity  was  shown  or  existed.  The  check 
in  the  possession  of  Lewis  was  not  payable  to  him,  but  to  his  prin- 
cipal, William  Deering  &  Co.;  and  no  implication  arose  that  prima 
facie  it  was  payable  to  Lewis,  or  that  he  had  authority  to  demand  or 
secure  payment  in  the  name  of  the  true  owner.  Where  the  drawer 
has  funds  in  a  bank,  it  is  by  custom  obliged  to  honor  checks  payable 
to  order,  and  it  pays  them  at  its  peril  to  any  other  than  the  person 
to  whose  order  they  are  made  payable.  Tiedmann,  Com.  Paper, 
§  431.    The  check  was  payable  to  plaintiff,  and,  when  Lewis  received 


840  LAW  V.   STOKES.  [CHAP.   IX 

it  in  payment  of  a  debt  due  his  principal,  his  duty  as  collector  ceased, 
except  to  transmit  it  to  his  principal.  The  indorsement  of  tlie  check 
was  not  a  necessary  incident  of  the  collection  of  the  account,  and  his 
power  to  receive  checks,  instead  of  cash,  did  not  confer  power  to  in- 
dorse checks.    Jackson  v.  Bank,  supra;  Graham  v.  U.  S.,  46  Mo.  186. 

The  fact  that  Lewis  was  authorized  to  make  collections  in  money 
as  well  as  in  checks  did  not  enlarge  his  authority  to  indorse  checks 
so  taken  in  the  name  of  the  principal.  Jackson  v.  Bank,  supra.  If 
he  took  checks  in  payment,  he  was  not  thereby  authorized  to  indorse 
them  to  the  bank  on  which  they  were  drawn,  and  receive  the  proceeds. 
1  Daniel  Neg.  Inst.  §  294.    See  Mechem,  Ag.  382. 

We  do  not  think  that  any  custom  or  usage  was  proven  that  plain- 
tiff permitted  its  collection  agents  to  indorse  checks  payable  to  it- 
self, and  receive  the  proceeds;  nor  do  we  in  any  manner  intimate 
that,  if  such  usage  or  custom  was  proven,  it  would  be  competent 
evidence  to  overcome  well-established  commercial  law.  It  seems  a 
hardship  for  this  loss  to  fall  upon  the  bank,  but  it  took  no  steps  to 
inquire  by  what  authority  Lewis  made  the  indorsement,  and,  like 
other  litigants  who  mistake  the  law,  it  must  necessarily  abide  the 
consequences.  Judgment  reversed.^ 


LAW   V.    STOKES. 

32  N.  J.  L.  249.     1867. 

This  cause  was  tried  at  the  Essex  Circuit  and  a  verdict  rendered 
for  the  defendant.  On  the  coming  in  of  the  postea,  the  plaintiff 
moved  to  set  aside  the  verdict,  and  for  a  new  trial. 

*  "  A  drummer  or  commercial  traveller,  employed  to  sell  and  take  orders  for  goods, 
to  collect  accounts,  and  receive  money  and  checks  payable  to  the  order  of  his  prin- 
cipal, Is  not,  by  implication,  authorized  to  Indorse  such  principal's  name  to  such 
checks."    Jackson  v.  Bank,  92  Tenn.  154,  160. 

An  agent  for  attending  to  and  managing  a  grocery  and  provision  store  is  not, 
In  consequence  of  such  agency,  authorized  to  draw  or  indorse  notes  in  the  name  of 
his  principal.     Smith  *.  Gibson,  6  Blackf.  (Ind.)  369. 

"  The  weight  of  authority  seems  to  be  in  favor  of  the  contention  of  appellant, 
that  authority  to  endorse  commercial  paper  can  only  be  implied,  where  the  agent  is 
unable  to  perform  the  duties  of  his  agency  without  the  exercise  of  such  authority. 
In  other  words,  the  power  of  an  agent  to  endorse  commercial  paper  for  his  principal 
must  be  a  necessary  implication  from  an  express  authority  conferred  upon  such 
agent.  Wherever  such  power  is  implied  from  the  acts  of  the  agent,  the  acts,  subject 
to  such  implication,  must  be  acts  of  a  kind  like  those  from  which  the  implication  is 
drawn.  ...  It  is  true  that  Jackson  was  the  superintendent  of  appellant's  mill,  and 
managed  the  business  of  running  the  mill ;  but  '  an  agent  having  general  authority 
to  manage  his  principal's  business,  has,  by  virtue  of  his  employment,  no  implied 
authority  to  bind  his  principal  by  making,  accepting,  or  endorsing  negotiable  paper. 
Such  an  authority  must  be  expressly  conferred,  or  be  necessarily  implied  from  the 
peculiar  circumstances  of  each  case.  It  may  undoubtedly  be  conferred,  and  by  im- 
plication, but  it  will  not  be  presumed  from  the  mere  appointment  as  general  agent.' 
(Mechem  on  Agency,  sec.  .398)."  Jackson  Paper  Co.  v.  Commercial  Bank,  199  111. 
151,  156,  157. 

See  also  New  York  Iron  Mine  v.  Bank,  39  Mich.  644,  reported  herein  at  p.  298. 


CHAP.   IX.]  SCOPE   OF   PARTICULAR  POWERS.  341 

The  opinion  of  the  court  was  delivered  by 

Depde,  J.  The  plaintiff  brought  this  action  to  recover  the  amount 
of  a  bill  of  goods,  sold  by  him  to  the  defendant.  The  sale  and  de- 
liver}' of  the  goods  were  not  denied,  and  the  only  question  in  con- 
troversy at  the  trial  was  whether  the  defendant  had  paid  for  them. 

The  plaintiff,  at  the  time  of  the  transaction,  was  an  importer  of 
earthenware,  doing  business  in  the  city  of  New  York,  and  the  de- 
fendant the  keeper  of  a  hotel  at  Long  Branch  in  this  state. 

On  the  fifth  of  July,  1865,  the  defendant  purchased,  at  the  store 
of  the  plaintiff,  in  New  York,  of  one  J.  B.  Sheriden,  a  bill  of  earthen- 
ware, amounting  to  the  sum  of  $320.37.  It  appears  from  the  evi- 
dence in  the  cause  that  Sheriden  was  employed  by  the  plaintiff  to 
sell  goods  for  him,  without  any  salary,  for  a  commission  on  his  sales. 
The  goods  in  question  were  sold  on  a  credit,  and  were  to  be  paid  for 
on  the  first  day  of  the  next  August.  The  goods  were  shipped  to  the 
defendant  on  the  sixth  day  of  July,  1865,  and  on  the  same  day  the 
plaintiff  wrote  the  defendant  a  letter,  of  which  the  following  is  a 
copy : 

Mb.  W.  Stokes,  Long  Branch : 

Deab  Sib,  —  I  beg  to  hand  you  bill  of  ware  purchased  by  you,  and  duly 
forwarded  as  per  direction.  I  trust  you  will  find  all  satisfactory.  Please 
remit  amount  direct  to  me. 

$320.37  Yours  truly, 

Henby  D.  Law. 
August  1,  1865. 

Enclosed  with  the  letter  was  a  bill  of  the  goods,  in  the  name  of 
Henry  D.  Law,  as  vendor,  in  the  heading  of  which  was  printed 
plainly  and  conspicuously,  in  red  letters,  "  all  remittances  on  account, 
or  in  settlement  of  bills,  must  be  made  direct  to  the  principal ;  sales- 
men not  authorized  to  collect."  On  the  sixteenth  of  August,  1865,  the 
defendant  paid  Sheriden  for  the  goods,  at  the  defendant's  hotel  at 
Long  Branch,  and  took  from  him  a  receipt  for  the  same,  signed, 
"  J.  B.  Sheriden,  for  Henry  D.  Law."  Sheriden  never  paid  the 
money  to  the  plaintiff,  and  has  left  the  country. 

The  fact  of  this  payment  to  Sheriden  is  not  disputed,  but  the 
plaintiff  insists  that  Sheriden  had  no  authority  to  collect  the  money, 
and,  therefore,  the  payment  to  him  is  no  discharge. 

Sheriden  was  a  mere  salesman  for  a  commission.  As  such  he  had 
authority  to  sell  goods  on  credit,  but  not  to  discharge  purchasers  from 
debts  incurred  by  them  in  purchasing  goods,  through  him,  of  the 
plaintiff.  An  agent  employed  to  make  sales,  and  selling  on  credit, 
is  not  authorized  subsequently  to  collect  the  price  in  the  name  of  the 
principal,  and  payment  to  him  will  not  discharge  the  purchaser, 
unless  he  can  show  some  authority  in  the  agent  other  than  that 
necessarily  implied  in  a  mere  power  to  make  sales.  Seiple  v.  Irwin, 
30  Penn.  (6  Casey)  513.    Such  authority  may  be  shown  by  proof. 


342  LAW  V.   STOKES.  [CHAP.   IX. 

either  that  the  agent  was  expressly  authorized  to  receive  and  dis- 
charge debts,  or  that  he  was  held  out  by  his  principal  to  the  public, 
or  to  the  defendant,  as  having  such  authority. 

A  principal  is  bound  by  the  acts  of  his  agent  within  the  authority 
he  has  actually  given  him,  which  includes  not  only  the  precise  act 
which  he  expressly  authorizes  him  to  do,  but  also  whatever  usually 
belongs  to  the  doing  of  it,  or  is  necessary  to  its  performance.  Beyond 
that,  he  is  liable  for  the  acts  of  his  agent  within  the  appearance  of 
authority  which  the  principal  himself  knowingly  permits  the  agent 
to  assume,  or  which  he  holds  the  agent  out  to  the  public  as  possessing. 
For  the  acts  of  his  agent,  within  his  express  authority,  the  principal 
is  liable,  because  the  act  of  the  agent  is  the  act  of  the  principal. 
For  the  acts  of  the  agent,  within  the  scope  of  the  authority  he  holds 
the  agent  out  as  having  or  knowingly  permits  him  to  assume,  the 
principal  is  made  responsible,  because  to  permit  him  to  dispute  the 
authority  of  the  agent  in  such  cases  would  be  to  enable  him  to  com- 
mit a  fraud  upon  innocent  persons.  In  whichever  way  the  liability 
of  the  principal  is  established,  it  must  flow  from  the  act  of  the 
principal.  And  when  established  it  cannot,  on  the  one  hand,  be 
qualified  by  the  secret  instructions  of  the  principal,  nor,  on  the 
other  hand,  be  enlarged  by  the  unauthorized  representations  of 
the  agent.  These  principles  find  ample  illustrations  in  the  ele- 
mentary books,  and  in  decided  cases.     1  Parsons  on  Cont.  44,  45; 

2  Kent  620,  621;  Mechanics  Bank  v.  N.  Y.  &  X.  H.  E.  E.  Co., 

3  Keman,  p.  632,  per  Comstock,  J. ;  F.  &  M.  Bank  of  Eens.  Co. 
V.  Butchers'  and  Drovers'  Bank,  16  N".  Y.  (2  Smith)  125;  Story 
on  Agency,  §  127';  Dunning  v.  Eoberts,  35  Barb.  463;  Thurman 
V.  Wells,  18  Barb.  500;  1  Am.  Leading  Cases,  567  (fourth  edition). 

"Where  an  agent  is  entrusted  with  the  possession  of  goods,  with 
an  unrestricted  power  to  sell  (Higgins  v.  Moore,  6  Bosw.  344), 
or  payments  are  made  over  the  counter  of  the  principal's  store 
to  a  shopman  accustomed  to  receive  money  there  for  his  employer 
(Kaye  v.  Brett,  5  Exch.  269),^  the  authority  to  receive  payment 
will  be  implied  in  favor  of  innocent  persons,  because  the  principal, 
by  his  own  act,  gives  to  the  agent  an  apparent  authority  to  receive 
such  payment.  But  if  the  principal  forbids  such  payments,  and 
requires  all  payments  to  be  made  to  himself  personally,  or  to  a 

•  "  If  a  shopman,  who  is  authorized  to  receive  payment  over  the  counter  only, 
receives  money  elsewhere  than  In  the  shop,  that  payment  Is  not  good.  The  principal 
might  be  willing  to  trust  the  agent  to  receive  money  In  the  regular  course  of  business 
in  the  shop,  when  the  latter  was  under  his  own  eye,  or  under  the  eyes  of  those  in 
whom  he  had  confidence,  but  he  might  not  wish  to  trust  the  agent  with  the  receipt 
of  money  elsewhere."     Kaye  v.  Brett,  5  Ex.  269,  274. 

"  The  usual  employment  of  a  clerk  in  a  retail  store  Is  to  sell  goods  to  customers 
or  purchasers,  and  it  is  implied  from  such  employment  that  he  has  authority  to 
receive  pay  from  them  on  such  sale.  But  there  is  no  implication  from  such  employ- 
ment that  he  has  authority,  after  goods  are  delivered  and  taken  from  the  store,  to 
present  bills  and  collect  money  due  to  his  employers,  because  it  is  not  in  the  scope 
pf  the  usual  employment  of  such  clerks."    Hirshfleld  v.  Waidron,  54  Mich.  649,  651. 


CHAP.   IX.]  SCOPE   OF   PARTICULAR  POWERS.  343 

cashier,  and  gives  a  customer  notice  thereof,  the  customer  would 
have  no  right  to  insist  upon  the  apparent  rather  than  the  real 
authority  of  the  agent. 

In  the  case  now  before  the  court,  Sheriden  had  not  the  possession 
of  the  goods.  The  sale  was  made  on  a  credit,  and  the  payment  was 
made  to  him,  not  over  the  plaintiff's  counter,  at  his  place  of  business, 
but  at  the  defendant's  hotel.  In  most  respects,  the  case  is  similar 
to  that  of  Seiple  v.  Irwin,  where  the  payment  to  the  agent  was  not 
sustained.  He  had  no  express  authority  to  collect  the  debt  in  ques- 
tion, nor  was  there  any  evidence  that  the  plaintiff  held  him  out 
to  the  public,  or  to  the  defendant,  as  having  such  authority.  The 
letter  of  the  plaintiff  expressly  directs  that  the  money  for  this  bill 
should  be  remitted  directly  to  him.  That  letter,  it  is  said,  was 
never  received  by  the  defendant.  The  weight  of  the  evidence  is 
that  that  letter  was  sent  and  was  received  before  the  payment  was 
made  to  Sheriden.  But  independent  of  that,  the  evidence  on  the 
part  of  the  defendant  shows  that  the  bill  which  was  produced  by 
him  at  the  trial  was  received  before  the  goods  were  unpacked,  and 
that  his  son,  who  was  his  bookkeeper,  and  had  charge  of  receiving 
those  goods,  ticked  off  the  goods  on  the  bill,  and  told  the  defendant 
that  it  was  correct. 

The  defendant  testified  that  he  never  saw  the  bill  until  after  the 
payment  was  made  to  Sheriden,  and  the  son  says  that  he  did  not 
read  the  heading  of  the  bill  —  that  he  had  not  time  to  do  it.  The 
plaintiff  did  all  that  prudence  and  good  faith  required  of  him  to 
prevent  the  defendant  falling  into  an  error  in  regard  to  his  salesman. 
Immediately  upon  the  shipment  of  the  goods,  he  wrote  the  letter 
to  the  defendant,  requiring  him  to  remit  direct  to  him,  and  enclosed 
in  it  the  bill  of  the  goods,  on  the  face  of  which  was  printed  a  notice, 
that  salesmen  were  not  authorized  to  collect.  That  bill,  at  least, 
was  in  the  hands  of  the  defendant's  son,  who  was  his  bookkeeper, 
and  authorized  to  pay  bills,  and  had  charge  of  comparing  the  goods 
with  the  bill,  and  who  was  present  when  the  money  was  subsequently 
paid  to  Sheriden.  Not  to  have  seen  the  directions  on  the  bill-head 
was  the  grossest  negligence,  and  to  permit  a  party  to  defend  under 
the  protection  of  his  own  carelessness,  would  be  to  offer  a  premium 
for  negligence,  and  open  the  door  to  fraud,  especially  so  when  the 
party  is  himself  bound  to  see  to  it  that  the  person  with  whom  he 
transacts  business,  as  an  agent,  has  the  authority  which  he  assumes. 
Capel  and  another  v.  Thornton,  3  C.  «&  P.  352,  is  not  a  parallel  case 
with  this.  In  that  case  the  defendant  dealt  with  Ellsworth,  the 
agent,  as  principal,  without  any  knowledge  of  his  agency.  The  coal, 
for  the  price  of  which  the  suit  was  brought,  was  ordered  of  Ells- 
worth, and  the  defendant  paid  Ellsworth.  The  only  evidence  of 
notice  of  his  agency,  before  the  bill  was  paid,  was  the  vendor's 
ticket,  sent  with  the  coal,  and  delivered  to  the  defendant's  footman, 


344  MOKINDLET   V.   DUNHAM.  [CHAP.   EC 

and  not  shown  to  have  reached  the  defendant.  After  the  payment 
was  made,  a  notice  was  sent  to  the  defendant,  by  the  plaintiffs,  to 
pay  the  amount  to  them,  or  to  their  clerk,  and  not  to  Ellsworth. 
The  defendant  had  no  knowledge  of  the  agency,  and  the  footman 
was  not  her  agent  in  relation  to  that  business,  and  the  notice  which 
the  defendant  did  receive  came  after  the  payment  was  made.  These 
circumstances  render  that  case  wholly  unlike  the  case  now  before 
the  court.  .  .  . 

The  verdict  is  against  the  evidence,  and  contrary  to  law,  and 
should  be  set  aside  and  a  new  trial  granted ;  costs  to  abide  the  event. 


McKINDLEY   v.   DUNHAM. 

55  Wis.  515.     1882. 

Action  to  recover  the  purchase  price  of  1,000  cigars  sold  and 
delivered  to  the  defendant.  The  answer  alleged  payment  in  full. 
There  was  a  verdict  for  the  defendant  and  from  a  judgment  thereon, 
the  plaintiffs  appealed. 

Oeton,  J.  A  short  time  before  August  11,  1879,  one  W.  L.  Kil- 
boum  called  upon  the  defendant  at  Berlin,  Wisconsin,  exhibited 
the  cards  of  the  plaintiffs'  house  in  Chicago,  and  solicited  and  ob- 
tained from  the  defendant  an  order  for  1,000  cigars  of  a  certain 
brand  upon,  and  sent  the  same  to,  the  plaintiffs,  and  the  plaintiffs 
on  that  day  shipped  the  cigars  and  sent  the  bill  thereof  (of  $30 
at  sixty  days)  to,  and  they  were  duly  received  by,  the  defendant. 
About  thirty  days  thereafter  the  said  Kilboum  called  upon  the 
defendant  and  asked  him  "  if  he  would  just  as  soon  pay  him  for 
these  cigars  as  not,"  and  the  defendant  replied  "  that  he  would  as 
soon  pay  it  then  as  any  other  time,"  and  paid  the  same,  and  said 
Kilbourn  receipted  the  original  bill  produced  by  the  defendant  in 
the  firm  name  of  the  plaintiffs  by  himself.  Kilboum's  real  authority 
as  agent  of  the  plaintiffs  was  to  solicit  from  country  merchants 
orders  on  them  for  goods,  and  if  such  orders  were  accepted  and 
filled  Kilbourn  was  entitled  to  a  small  commission  thereon.  We 
have  no  evidence  of  what  the  terms  of  this  order  were,  and  are  left 
to  presume  that  it  was  a  mere  order  or  request  by  the  defendant  to 
the  plaintiffs  for  1,000  cigars,  and  perhaps  at  a  certain  price.  The 
main  question  in  the  case  is  the  authority  of  Kilboum  to  receive 
payment  of  this  bill.  There  is  no  proof  of  numerous  or  indeed  of 
any  other  acts  done  by  this  agent  of  this  character,  with  the  express 
or  tacit  consent  of  the  plaintiffs,  or  of  any  general  habits  of  dealing 
or  of  any  other  transaction  between  these  parties  of  any  kind,  or 
that  the  real  scope  of  his  authority  beyond  what  appeared  was  dis- 


CHAP.    IX.]  SCOPE  OF   PABTICULAR  POWERS.  345 

closed  at  this  time.  There  is  nothing  besides  this  one  transaction 
from  which  his  authority  and  the  full  scope  of  his  authority  can 
be  implied  or  inferred.  It  is  his  apparent  or  ostensible  authority 
in  this  one  act  to  do  another  act  of  the  same  kind,  and  nothing 
more. 

The  only  question  here  is,  what  was  his  apparent  or  ostensible 
authority  in  this  one  act?  "His  implied  agency  cannot  be  con- 
strued to  extend  beyond  the  obvious  purposes  for  which  it  was 
apparently  created."  "  The  intention  of  the  parties,  dedflced  from 
the  nature  and  circumstances  of  this  particular  case,  constitutes  the 
true  ground  of  exposition  of  the  extent  of  his  authority."  Story  on 
Ag.  §  87;  Wright  v.  Hood,  49  Wis.  235.  A  principal  is  responsible 
for  any  act  of  his  agent  which  justifies  a  party  dealing  with  him 
in  believing  that  he  has  given  the  agent  his  authority  to  do  such  act 
(1  Parsons  on  Con.  44;  Kasson  v.  Noltner,  43  Wis.  647);  or,  as 
PoTHiER  says,  "  if  the  agent  does  not  exceed  the  power  with  which 
he  was  ostensibly  invested."  This  agent  did  not  appear  or  pretend 
to  have  any  other  authority  from  the  plaintiffs  than  to  solicit  orders 
for  goods,  and  send  them  to  the  plaintiffs.  This  is  all  he  did  in 
this  case,  and  all  he  pretended  he  had  authority  to  do.  In  this  he 
could  not  possibly  do  his  principal  any  harm.  To  this  extent  they 
authorized  him  and  trusted  him;  but  they  might  not  have  been 
willing  to  trust  him  further  with  the  large  and  dangerous  power  of 
receiving  payments,  and  they  did  not,  so  far  as  is  possible  to  infer 
from  this  transaction. 

But  it  is  said  by  the  learned  counsel  of  the  respondent  the  agent 
Kilboum  sold  the  goods  to  the  defendant,  and  in  this  power  to  sell 
is  implied  the  further  power  to  receive  the  consideration  or  payment 
therefor,  and  the  learned  judge  of  the  circuit  court  in  effect  so  charged 
the  jury,  as  follows :  "  Presumptively,  Mr.  Dunham  had  the  right 
to  pay  this  bill  to  the  person  from  whom  he  purchased  the  goods  " 
(meaning  Kilboum,  the  agent) ;  and  again:  "The  plaintiffs  sending 
the  goods  to  Dunham  upon  that  sale  or  order,  presumptively  Kil- 
boum had  the  right  to  collect  that  debt."  If  what  Kilbourn  did 
could  properly  be  called  a  sale  of  the  goods,  even  then  his  instruction 
is  questionable  as  an  abstract  statement  of  the  law;  for  it  does  not 
always,  as  a  general  rule,  follow  that  the  power  to  collect  the  moneys 
upon  them  is  included  in  the  power  of  an  agent  to  make  contracts 
for  his  principal.  Story  on  Ag.  §  98;  Higgins  v.  Moore,  34  N.  Y. 
417;  Mynn  v.  Joliffe,  1  Moody  &  R.  326. 

But  the  agent  did  not  sell  the  goods,  or  even  contract  to  sell  them. 
When  the  defendant  had  completed  his  transaction  with  Kilbourn, 
there  had  been  no  binding  contract  made,  or  any  sale,  absolute  or 
conditional.  The  defendant  could  have  countermanded  his  order  at 
any  time  before  the  goods  were  shipped,  and  the  plaintiffs  could  have 
refused  to  accept  the  order.     Neither  party  had  become  bound  by 


346  McKINDLEY   V.   DUNHAM.  [CHAP.   IX. 

anything  then  done.  The  order  of  the  defendant  was  a  mere  pro^ 
posed,  to  be  accepted  or  not,  as  the  plaintiffs  might  see  fit,  and  he 
could  have  withdrawn  it  before  its  acceptance.  The  minds  of  the 
parties  had  not  met,  and  there  had  been  no  mutual  assent  or 
aggregatio  mentium.  Benj.  on  Sales,  §§  40,  70;  Johnson  v.  Fil- 
kington,  39  Wis.  62.  Even  as  a  broker  (and  he  was  less  rather  than 
more  in  the  authority  he  exercised  in  this  instance)  he  need  not 
even  see  to  the  delivery  of  the  goods  (Story  on  Sales,  §  85)  ;  and 
if  his  negotiation  had  been  broken  off,  and  the  contract  not  finally 
completed,  he  would  not  be  entitled  to  his  commissions.  Story  on 
Sales,  §  86.  As  is  said  in  Higgins  v.  Moore,  supra:  "  The  duty 
of  a  broker,  in  general,  is  ended  when  he  has  found  a  purchaser 
and  has  brought  the  parties  together.  He  is  a  mere  negotiator  or 
middle-man  between  the  seller  and  purchaser."  It  is  only  in  cases 
where  the  broker  has  possession  of  the  goods  that  he  can  sell,  and  in 
that  case,  even,  if  he  parts  with  the  securities  he  receives  on  the  sale 
to  his  principal,  his  implied  authority  to  receive  payment,  if  he 
had  any,  ceases  with  their  possession.  Strachan  v.  Muxlow,  24 
Wis.  1.  Aside  from  the  clear  and  obvious  reason  from  the  general 
principles  of  bargain  and  sale,  and  principal  and  agent,  why  Kil- 
bourn  was  not  authorized  to  receive  payment  as  the  agent  of  the 
plaintiffs  in  this  case,  the  four  following  cases,  all  of  them  closely 
analogous,  and  two  of  them  precisely  parallel,  are  abundant  author- 
ity: Barring  v.  Corrie,  2  Bam.  &  Aid.  137;  Higgins  v.  Moore,  supra; 
Korneman  v.  Manegan,  24  Mich.  36 ;  and  Clark  v.  Smith,  88  111.  298. 

It  follows,  therefore,  that  so  far  the  circuit  court  committed  two 
flagrant  errors:  First,  in  ruling  and  instructing  the  jury  that  Kil- 
bourn,  as  agent  of  the  plaintiffs,  made  a  sale  of  the  goods  to  the 
defendant,  and  was  authorized  so  to  do;  and,  secondly,  that  if  he 
did  sell  the  goods,  he  had,  therefore,  authority  to  receive  payment 
therefor.  We  omit  to  consider  whether,  admitting  both  of  these 
propositions,  he  could  have  received  payment  before  it  was  due 
according  to  the  terms  of  the  assumed  sale,  or  whether  the  fact  of 
his  proposing  payment  so  long  before  due  did  not  cast  suspicion 
upon  his  act,  especially  as  he  had  ndt  been  entrusted  with  the  bill 
of  the  goods  even,  and  did  not  pretend  that  he  had  authority  to 
receive  the  payment;  leaving  to  the  defendant  the  merely  voluntary 
act  of  payment,  in  answer  to  the  request  "  if  he  would  just  as  soon 
pay  him  for  those  cigars  as  not."  .  .  . 

By  the  Court.  The  judgment  of  the  circuit  court  is  reversed 
and  the  cause  remanded  for  a  new  trial  therein.* 

^  Accord  :  Butler  v.  Dorman,  68  Mo.  298 ;  John  Matthews  Apparatus  Co.  v. 
Benz,  61  S.  W.  (Ky.)  9. 

In  Crawford  v.  Whittaker,  42  W.  Va.  430,  the  plaintiffs,  partners,  sued  the  de- 
fendant for  the  purchase  price  of  goods  sold  to  the  defendant  by  a  travelling  sales- 
man of  the  plaintiffs.  The  defendant  pleaded  payment  to  the  travelling  salesman. 
He  admitted  notice  not  to  pay  salesmen,  but  contended  that  be  had  made  the  pay- 


CHAP.  IX.]  SCOPE  OP  PARTICULAR  POWERS.  347 

TRAINER   V.   MORISON. 
78  Me.  160.     1886. 

Haskell,  J.  Assumpsit  to  recover  the  price  for  merchandise 
sold.    Defence,  payment  to  the  plaintiff's  general  agent. 

The  plaintiff  employed  an  agent  to  "  sell "  his  goods  "  by  sample.** 
The  agent  took  an  order  from  the  defendants  for  oil,  and  directed 
the  same  forwarded  to  them,  saying  that  it  would  arrive  by  next 
boat,  and  that  "  he  came  round  once  a  month,"  when  the  defendants 
engaged  to  pay  him.  The  goods  were  delivered  as  agreed,  accom- 
panied by  a  bill,  with  the  words,  "all  bills  must  be  paid  by  check 
to  our  order,  or  in  current  funds  at  our  office,"  printed  in  red  at  the 
top.  In  two  weeks  after  the  delivery  of  the  oil,  the  agent  called 
for,  and  received  from  the  defendants  pay  for  the  same,  and  gave 
to  them  a  bill  receipted  in  the  plaintiff's  name  by  himself,  that  bore 
the  same  notice  in  red  letters  that  was  printed  upon  the  bill  sent 
with  the  goods.  The  agent  embezzled  the  collection.  The  case  comes 
up  on  report. 

The  agent  contracted  a  sale  of  the  goods  to  be  delivered,  and 
to  be  paid  for  to  himself  at  his  next  call.  The  goods  were  delivered 
according  to  contract,  thereby  giving  the  defendants  reason  to  be- 

ment  relying  upon  the  representation  of  the  salesman  that  he  was  a  member  of  the 
firm.  The  court,  in  overruling  this  defence,  said  "  The  burden  of  showing  that  a 
salesman  not  in  possession  of  the  goods  had  authority  to  receive  payment  therefor 
Is  on  the  purchaser  or  the  party  mailing  payment.  The  defendant  linew  that  Con- 
roy  was  a  salesman,  and,  as  such,  was  without  authority  to  receive  payment ;  yet  he 
accepts  his  misrepresentations  as  to  being  a  member  of  the  firm,  although  the  style 
thereof  was  Crawford  Bro's.  This  alone  should  have  put  him  upon  inquiry  as  to  the 
truth  of  the  representations.  There  is  nothing  to  show  that  Crawford  Bro's  were 
advised  of,  or  had  any  knowledge  of,  these  misrepresentations,  or  that  they  ratlfled 
them  in  any  manner.  They  had  taken  sufficient  steps  for  their  own  protection  when 
they  notified  their  customers  not  to  make  payments  to  salesmen ;  and  they  could  not 
foresee  or  protect  themselves  against  the  false  representations  of  their  agents  as  to 
their  relation  to  the  firm.  The  name  of  the  firm,  together  with  notice  not  to  pay 
salesmen,  was  sufficient  'i  t  put  the  purchaser  on  his  guard  and  inquiry  as  to  the 
truth  of  the  representations  of  the  salesman.  Instead  of  making  inquiry,  he  took 
the  risk  of  the  salesman's  integrity,  and  must  bear  the  loss  which  his  false  repre- 
sentations, clearly  beyond  the  scope  of  his  authority,  have  imposed.  It  would  be  a 
harsh  rule,  indeed,  to  require  wholesale  dealers  to  notify  their  customers  that  their 
travelling  salesman  were  not  members  of  the  firm,  and  for  this  reason  not  authorized 
to  receive  payment  for  goods  sold.  The  presumption  is  that  they  are  not  members 
of  the  firm  they  represent  as  salesmen,  in  the  face  of  notice  not  to  pay  salesmen ; 
and  the  burden  is  on  the  person  alleging  the  contrary  to  show  the  relationship,  and 
destroy  this  presumption,  which  can  not  be  done  by  the  mere  declarations  of  the 
salesman  made  without  the  knowledge  of  the  firm.  It  is  an  established  rule  of  the 
mercantile  law  that  a  travelling  salesman  who  is  merely  authorized  to  take  orders  for 
goods  has  no  implied  authority  to  receive  payment  or  make  collections.  Clark  v. 
Smith,  88  111.  208;  1  Am.  &  Eng.  Enc.  Law,  10.36.  To  hold  that  such  salesmen 
can  empower  themselves  to  make  such  collections  by  merely  falsely  representing 
themselves  to  be  members  of  the  firm  for  which  they  are  making  sales  is  placing  It 
within  their  nower  to  entirely  abrogate  the  rule,  and  destroy  its  efficacy.  Whole- 
sale merchanis  would  be  entirely  at  the  mercy  of  their  salesmen." 

A  travelling  salesman,  known  in  modern  business  parlance  as  a  "  drummer " 
derives  no  implied  authority  from  the  nature  of  his  employment  to  sell  the  samples 
with  which  his  principal  intrusts  him  as  an  aid  to  the  discharge  of  the  duties  he 
engages  to  perform,    Hlbbard  v.  Stein,  45  Or.  507. 


348  TRAINER   V.   MORISON.  [CHAP.   JXJ 

licve  that  the  agent  had  authority  to  contract  for  their  sale.  An 
agent  who  has  authority  to  contract  for  the  sale  of  chattels,  has 
authority  to  collect  pay  for  them  (at  the  time,  or  as  a  part  of  the 
same  transaction),  in  the  absence  of  any  prohibition  known  to  the 
purchaser.  Capel  v.  Thornton,  3  Car.  &  Payne,  352;  Greely  v. 
Bartlett,  1  Maine,  173;  Goodenow  v.  Tyler,  7  Mass.  36;  Story  on 
Agency,  §  102. 

Knowledge  of  this  prohibition  by  the  purchaser  may  be  inferred 
from  particular  circumstances  of  the  sale,  or  from  customary  usages 
of  trade  with  which  he  is  familiar,  as  well  as  by  direct  notice,  that 
the  authority  of  the  agent  is  limited  in  this  particular.  Persons 
dealing  with  an  agent  have  a  right  to  assume  that  his  agency  is 
general,  and  not  limited,  and  notice  of  the  limited  authority  must 
be  brought  to  their  knowledge  before  they  are  to  regard  it.  Methuen 
Co.  V.  Hayes,  33  Maine,  169.  A  travelling  agent,  who  assumes  only 
to  solicit  orders  for  goods  to  be  sold  at  the  option  of  his  principal, 
as  in  McKindley  v.  Dunham,  55  Wis.  515,  may  well  be  held  un- 
authorized to  make  collections.  So  a  broker,  not  intrusted  with  the 
article  sold,  may  not  be  authorized  to  receive  the  purchase  money. 
Higgins  V.  Moore,  34  ?f.  Y.  417;  Barring  v.  Corrie,  2  B.  &  Aid.  137; 
Story  on  Agency,  §  109, 

In  this  case,  the  agent  assumed  to  complete  a  contract  of  sale, 
specific  in  its  terms,  stipulating  that  payment  was  to  be  made  to 
himself.  After  the  goods  had  been  delivered  he  presented  for 
payment  a  bill,  made  upon  a  genuine  "  bill  head  "  of  his  principal. 
He  assumed  general  authority,  and  no  facts  are  proved  that  curtail 
or  limit  it.  The  plaintiff  seeks  to  charge  the  defendant  with  knowl- 
edge that  payment  was  required  to  be  made,  according  to  the  terms 
of  the  notice  in  red  letters  upon  the  bill  sent  with  the  goods.  The 
defendants  did  not  see  the  notice,  nor,  taking  into  consideration  the 
care  ordinarily  exercised  by  prudent  men,  are  they  at  fault  for  not 
observing  it. 

It  is  not  so  prominent  upon  the  bill  as  to  become  a  distinctive 
feature  of  it;  one  that  would  be  likely  to  attract  attention  in  the 
hurry  of  business,  and  that  ought  to  have  been  seen  by  the  de- 
fendants. It  would  have  been  an  easy  matter  for  the  plaintiff  to 
have  inclosed  the  bill  in  a  letter  of  advice,  calling  the  attention 
of  the  defendants  to  the  fact  that  he  was  unwilling  to  intrust  collec- 
tions to  his  agent.  Kinsman  v.  Kershaw,  119  Mass.  140;  Putman 
and  Co.  v.  French  et  al.  53  Vt.  402;  Wass  v.  M.  M.  Ins.  Co.  61 
Maine,  537.  Plaintiff  nonsuit.^ 

Peters,  C.  J.,  Danforth,  Virgin,  Emery  and  Foster.  JJ., 
concurred. 

»  Contra:   Simon  v.  Johnson,  105  Ala.  344. 


CHAP.    IX.]  SCOPE   OF   PARTICULAR   POWERS.  34J 

HAREIS   V.    SIMMERMAN. 

81  111.  413.     1876. 

Appeal  from  a  judgment  in  favor  of  defendant. 
Mr.  Justice  Scholfield  delivered  the  opinion  of  the  court: 
The  suit  is  for  the  balance  due  for  a  safe  sold  and  delivered  by 
the  plaintiff  to  the  defendants.  Proof  is  made  of  payment  to  one 
Cochnower,  the  agent  of  plaintiff,  by  whom  the  sale  was  effected, 
and  the  only  question  is,  whether  this  payment  is  good  as  against 
the  plaintiff. 

Plaintiff  testifies  that  Cochnower  was  only  authorized  to  take 
orders  for  safes,  and  that  he  had  no  authority  to  receive  payment. 
The  general  rule  is  that  a  person  dealing  with  an  agent  consti- 
tuted for  a  special  purpose,  does  so  at  his  peril,  where  the  agent 
passes  the  precise  limits  of  his  power,  though,  if  he  pursues  the 
power  as  exhibited  to  the  public,  his  principal  is  bound,  even  if 
private  instructions  had  still  further  limited  this  special  power. 
2  Kent's  Corns.  8th  ed.,  p.  806,  side  p.  621. 

In  the  case  before  us,  the  agent  received,  at  the  time  he  sold  the 
safe,  an  old  safe,  which  he  and  defendants  agreed  should  go  in 
payment  of  $50  on  the  safe  to  be  delivered  by  the  plaintiff.  Plaintiff 
accepted  the  old  safe  at  this  estimate  and  sent  the  new  safe,  and 
gave  defendants  no  notice,  until  after  they  had  paid  Cochnower, 
that  he  had  no  authority  to  collect  the  balance  due. 

We  think  this  transaction  was  a  recognition  of  a  right  in  the 
agent  to  receive  payment  —  a  holding  of  him  out  to  the  public  as 
authorized  to  collect,  as  well  as  to  sell.  If  he  was  authorized 
to  receive  old  safes  in  part  payment,  fixing  and  agreeing  upon 
their  value,  the  inference  would  be  that  he  might  also  receive 
money. 

Plaintiff  should,  at  once,  upon  the  receipt  of  the  old  safe,  which 
was  express  notice  to  him  that  his  agent  was  exceeding  what  he  says 
was  the  authority  confided  to  him,  have  notified  the  defendants  that 
the  agreement  was  beyond  his  authority,  and  that  he  was  not 
authorized  to  receive  payment.  By  the  acquiescing  of  the  plain- 
tiff in  the  arrangement  the  agent  made,  defendants  were  justi- 
fied in  assuming  that  the  agent  had  the  power  to  collect,  as  he 
represented  he  had,  and  not  being  otherwise  informed  until  after 
they  had  made  payment,  the  plaintiff  should  be  bound  by  the 
payment. 

We  consider  it  of  no  special  significance  that  the  order  for  the 
safe,  and  agreement  of  price  to  be  paid,  were  in  writing  and  not 
verbal.     The  writing  was  delivered  to  the  agent,  and  there  was 


350  DAYLIGHT  BURNER  CO.   V.   ODLIN.  [CHAP.   IX. 

nothing  in  it  which  precluded  payment  to  be  made  to  an  agent, 
instead  of  the  plaintiff. 

The  judgment  is  affirmed.  Judgment  affirmed.^ 


DAYLIGHT   BURNEE   CO.   v.    ODLIN". 

61  N.  H.  56.     1871. 

Assumpsit  against  Odlin  as  a  common  carrier  for  delivering,  goods 
marked  "  C.  0.  D."  without  receiving  the  price.  Verdict  for 
defendant,  and  plaintiff  moved  to  set  it  aside. 

The  goods  were  addressed  to  one  Berry,  to  whom  they  had  been 
sold  by  Moore,  an  agent  of  plaintiff.  Berry  refused  to  pay  for  the 
goods  on  the  ground  that  he  had  purchased  them  of  Moore  on  credit. 
Defendant  refused  to  deliver  them,  but  subsequently  Berry  presented 
an  order  from  Moore  to  defendant  directing  defendant  to  deliver 
them  "  without  C.  0.  D.,"  and  thereupon  defendant  delivered  them 
without  receiving  payment. 

Moore  travelled  to  sell  his  own  goods,  but  incidentally  sold  goods 
for  plaintiff.    He  had  no  actual  authority  to  sell  on  credit. 

Bellows,  C.  J.  From  the  uncontradicted  testimony  of  the  plain- 
tiff and  the  finding  of  the  jury,  it  may  be  assumed  that  Moore  was 
clothed  by  the  plaintiff  with  an  apparent  authority,  like  that  of  a 
factor,  to  sell  all  the  goods  of  the  plaintiff  he  could  sell  within  his 
business  circuit,  on  a  commission  of  ten  per  cent. 

As  incident  to  that  general  authority,  he  had  power  to  fix  the 
terms  of  sale,  including  the  time,  place,  and  mode  of  delivery,  and 
the  price  of  the  goods,  and  the  time  and  mode  of  payment,  and  to 

1  In  Meyer,  etc.,  Co.  v.  Stone  &  Co.,  46  Ark.  210,  215,  It  was  held  that  full  valid- 
ity may  also  "  be  given  to  the  act  of  the  agent  in  receiving  payment  if  there  be  a 
known  usage  of  trade  or  course  of  business  to  justify  the  purchaser  in  making  it. 
...  In  that  case  the  presumption  Is  that  the  agency  was  created  with  reference  to 
the  custom  or  course  of  business,  and  the  ordinary  reach  of  the  agent's  authority  is 
thereby  enlarged  so  as  to  cover  the  usual  incidents  of  such  an  agency. 

"  The  proof  in  this  case  developed  the  fact  that  it  was  a  general  custom  for  com- 
mercial agents,  travelling  like  Barry,  to  solicit  orders,  to  collect  the  purchase  money 
for  the  goods  sold  by  them,  for  their  principals,  and  the  proof  was  specifically 
directed  to  the  custom  of  St.  Louis  agents  (the  principals  were  St.  Louis  mer- 
chants). Isolated  exceptions  to  the  rule  were  proved,  but  in  such  instances  the  firm 
making  the  limitation  indicated  the  fact  in  their  bill  or  letter  heads  that  payment 
must  be  made  to  them  directly.  Proof  was  had  of  the  fact  of  two  other  of  appel- 
lants' salesmen  traveling  at  the  same  time  as  Barry,  both  of  whom  were  in  the  habit 
of  making  collections  as  Barry  did,  in  this  instance,  and  remitting  to  the  appellants. 
Barry,  himself,  it  ^pears,  made  collections  from  other  customers  of  this  house,  and 
remitted  the  money  to  his  principals  from  time  to  time,  and  no  complaint  was  made 
by  them  of  this  exercise  of  authority,  until  his  failure  to  remit  the  money  paid  him 
by  the  appellees.  They  did  not  before  that  time  Inform  him  or  any  one  else  that 
he  had  no  authority  to  collect.  Proof  of  the  custom  as  referred  to  was  admissible, 
not  for  the  purpose  of  enlarging  the  scope  of  Barry's  agency,  but  in  order  to  inter- 
pret his  power  under  it,  and  the  specific  acts  of  payment  by  other  merchants  to 
Barry  and  the  appellants'  other  agents,  tended  to  show  their  usual  course  of  dealing 
with  this  class  of  agents,  and  to  establish  an  actual  knowledge  on  their  part  of  the 
usage  in  this  respect." 


CHAP.   IX.]  SCOPE   OF  PARTICULAR  POWERS.  351 

receive  payment  of  the  price,  subject  of  course  to  be  controlled  by 
proof  of  the  mercantile  usage  in  such  trade  or  business. 

There  is  some  conflict  in  the  adjudged  cases  upon  the  question 
of  the  authority  of  a  factor  to  sell  on  credit,  but  we  think  the  weight 
of  modern  authority  is  in  favor  of  the  position  that  he  may  sell  on 
credit,  unless  a  contrary  usage  is  shown.  Goodenow  v.  Tyler,  7 
Mass.  36;  Hapgood  v.  Batcheller,  4  Met.  573;  Greely  v.  Bartlett, 
1  Greenl.  172;  Van  Alen  v.  Vanderpool,  6  Johns.  70;  Eobertson  v. 
Livingston,  5  Cow.  473;  Leland  v.  Douglass,  1  Wend.  490;  and  see 
1  Am.  Leading  Cases,  4th  ed.,  662,  note,  where  it  is  said  that  it  is 
universally  established  as  the  law-merchant  that  a  factor  may  sell 
on  credit.  So  in  Laussatt  v.  Lippincott,  6  S.  &  K.  386,  and  May 
V.  Mitchell,  5  Humph.  365,  and  Story  on  Agency,  §  209. 

The  same  views  are  recognized  in  Scott  v.  Surman,  Willes,  406; 
Russell  V.  Hankey,  6  T.  R.  12;  Haughton  v.  Mathews,  3  B.  &  P. 
489,  per  Chambre,  J. ;  3  Selw.  N.  P.  719. 

In  the  case  before  us,  Moore  stands  much  on  the  same  footing  as 
a  factor.  The  most  marked  distinction  is  that  he  is  a  travelling 
merchant,  and  did  not  apparently  have  his  principal's  goods  with 
him;  but  this,  we  think,  cannot  affect  the  rule. 

The  reason  of  that  rule  in  the  case  of  factors  is  that  it  is  found, 
by  experience  and  repeated  proofs  in  courts  of  justice,  that  it  is 
ordinarily  the  usage  of  factors  to  sell  on  credit ;  and  the  same  reason 
will  apply  in  this  case.     • 

We  have  a  case,  then,  where  the  agent  was  apparently  clothed 
with  the  authority  to  sell  the  plaintiff's  goods,  without  limitation 
as  to  the  quantity,  and  on  commission,  for  cash  or  on  credit  as  he 
might  think  proper;  and  this  being  so,  Moore  must  be  regarded,  in 
respect  to  third  persons,  as  the  plaintiff's  general  agent,  whose 
authority  would  not  be  limited  by  instructions  not  brought  to  the 
notice  of  such  third  persons.  Backman  v.  Charle'stown,  42  N.  H. 
125,  and  cases  cited. 

As  Moore,  then,  in  respect  to  third  persons,  had  the  power  to  sell 
on  credit,  the  authority  to  control  the  delivery  of  the  goods  so  sold 
and  sent  to  his  order,  for  the  purpose  of  making  it  conform  to  the 
contract  of  sale,  would  necessarily  come  within  the  scope  of  his 
agency;  and  we  think  his  order  to  the  defendant  would  justify  a 
delivery  of  the  goods  without  payment,  unless  he  had  notice  of  the 
agent's  want  of  authority.  As  to  him  the  agenfs  apparent  authority 
was  real  authority. 

The  marking  of  the  package  by  another  agent  of  the  plaintiff, 
to  the  effect  that  cash  was  required  on  delivery,  was  not  in  law  notice 
of  such  want  of  authority,  although  it  might  be  sufficient  to  put  the 
defendant  upon  inquiry.  That,  however,  was  properly  left  to  the 
jury,  and  they  have  found  it  not  to  be  sufficient  for  that  purpose. 
The  marking  of  the  package  in  that  way  does  not  necessarily  imply 


352  PAYNE  V.   POTTER.  [CHAP.  IX. 

that  the  agent  had  no  authority  to  sell  on  credit,  but  it  might  indi- 
cate merely  that  the  person  so  marking  it  supposed  the  sale  to  be  for 
cash.  And  it  might  well  be  considered  to  come  within  the  scope 
of  Moore's  agency  to  make  the  delivery  conform  to  the  contract  of 
sale. 

As  the  defendant,  therefore,  is  found  to  have  had  no  notice  of 
any  want  of  authority  in  Moore,  and  was  not  put  upon  inquiry, 
there  must  be  Judgment  on  the  verdict. 


PAYNE   V.    POTTER. 

9  Iowa,  549.     1859. 

Eeplevin  for  a  horse  alleged  to  be  of  the  value  of  one  hundred 
dollars.  The  court  charged  the  jury,  that  "  if  the  defendant  justi- 
fied his  possession  by  virtue  of  a  purchase  from  the  agent  of  the 
plaintiff  having  authorit}'  to  sell,  he  must  show  that  the  agent  in 
making  the  sale  complied  substantially  with  the  authority  conferred. 
That  an  authority  to  sell  the  horse  did  not  confer  upon  the  agent 
authority  to  sell  him  upon  time,  and  if  the  defendant  in  justification 
shows  simply  an  authority  to  sell,  he  must  in  addition  show  that  the 
sale  was  for  cash ;  and  it  is  not  sufficient  to  show  a  sale  upon  time." 
Judgment  for  plaintiff,  and  defendant  appeals. 

Stockton,  J.  The  first  assignment  of  error  is  upon  the  charge 
of  the  court.  The  rule  of  law  is  that  no  man  is  bound  by  the  act 
of  another,  without  or  beyond  his  consent;  and  where  an  agent  acts 
under  a  special  or  express  authority,  whether  written  or  verbal,  the 
party  dealing  with  him  is  bound  to  know  at  his  peril  what  the  power 
of  the  agent  is,  and  to  understand  its  legal  effect;  and  if  the  agent 
exceed  the  boundary  of  his  legal  power,  the  act,  as  concerns  the 
principal,  is  void.  Delafield  v.  State  of  Illinois,  26  Wend.  193; 
Story  on  Agency,  §  165.  The  power  must  be  pursued  with  legal 
strictness,  and  the  agent  can  neither  go  beyond  nor  beside  it.  The 
act  must  be  legally  identical  with  that  authorized  to  be  done,  or 
the  principal  is  not  bound.  1  Am.  Lead.  C.  544,  545,  note  to 
Eossiter  v.  Bossiter.  So  it  is  held  that  an  agent  to  whom  a  horse 
is  given  to  sell  for  the  principal,  cannot  deliver  him  in  payment 
of  his  own  debt,  and  the  owner  may  recover  the  horse  from  a 
purchaser  to  whom  he  has  been  so  delivered.  Parsons  v.  Webb, 
8  Greenl.  E.  38. 

And  it  is  held  that  a  special  authority  or  direction  to  sell  does 
not  authorize  a  sale  on  credit,  unless  commercial  custom  has  given 
rise  to  such  an  understanding  in  some  particular  business.  The 
question  whether  in  such  a  case  a  discretion  to  sell  on  credit  is  given 
must  depend  on  the  authority  in  the  particular  case.     In  May  v. 


CHAP.   IX.]  SCOPE   OF   PAETICULAE   POWERS.  353 

Mitchell,  5  Humph.  365,  a  principal  delivered  to  an  agent  three 
mules  to  be  taken  to  the  southern  market,  and  to  be  sold  for  the  best 
price  that  he  could  get,  and  the  proceeds  to  be  returned;  the  agent 
took  them  to  the  south  and  sold  them  on  credit,  and  the  purchaser 
proved  insolvent;  it  was  held  that  the  agent  was  vested  with  a  dis- 
cretionary power  to  sell  upon  the  best  terms  that  could  be  procured 
according  to  the  course  of  trade  in  that  part  of  the  country  to  which 
the  mules  were  carried,  and  as  this  was  proved  to  be  on  credit,  the 
agent  was  held  not  to  be  liable  to  the  principal. 

Every  general  power  necessarily  implies  the  grant  of  every  matter 
necessary  to  its  complete  execution.  Peck  v.  Harriott,  6  Serg.  & 
E.  146.  In  the  absence  of  special  instructions  to  the  contrary,  and 
in  the  absence  of  such  prescription  as  to  the  manner  of  doing  the 
act,  as  implies  an  exclusion  of  ^  any  other  manner,  an  authority  or 
direction  to  do  an  act,  or  accomplish  a  particular  end,  implies  and 
carries  with  it  authority  to  use  the  necessary  means  and  inducements, 
and  to  execute  the  usual  legal  and  appropriate  measures  proper  to 
perform  it.  And  not  only  are  the  means  necessary  and  proper  for 
the  accomplishment  of  the  end  included  in  the  authority;  but  also, 
all  the  various  means  which  are  justified  or  allowed  by  the  usages 
of  trade.  Thus  (says  Judge  Story)  if  an  agent  is  authorized  to 
sell  goods,  this  will  be  construed  to  authorize  the  sale  to  be  made  on 
credit  as  well  as  for  cash,  if  this  course  is  justified  by  the  usages  of 
trade,  and  the  credit  is  not  beyond  the  usual  period.  Story  on 
Agency,  §  60. 

We  think  it  results  from  the  rules  above  laid  down  that  the  burden 
lay  upon  the  defendant  to  show  that  the  sale  by  the  agent  on  credit 
was  justified  by  the  usages  of  trade,  and  that  the  credit  given  was 
not  unreasonable.  Without  such  proof  the  authority  of  the  agent 
could  only  be  construed  into  an  authority  to  sell  for  cash;  and  in 
this  view  there  was  no  error  in  the  charge  of  the  court  to  defendant's 
prejudice.  .  .  .  Judgment  reversed  on  another  point. 


BEITTAIN   V.   WESTALL. 

137  N.  C.  30.     1904. 

Action  to  recover  a  balance  claimed  to  be  due  for  lumber  sold  and 
delivered  by  plaintiff  to  the  defendant  through  one  J.  A.  Townsend, 
who,  the  plaintiff  alleged,  was  the  agent  of  defendant  to  buy  the 
lumber.  Defendant  denied  this  allegation,  and  he  also  denied  that 
he  was  indebted  to  plaintiff  in  any  amount.  From  a  judgment  in 
favor  of  plaintiff,  defendant  appeals. 

Walker,  J.  This  case  was  before  us  at  the  last  term  upon  an 
appeal  by  the  plaintiff  from  a  judgment  of  nonsuit,  which  the  court 

23 


354  BEITTAIX    V.    WESTALL.  [CHAP.    IX. 

rendered  on  motion  of  the  defendant  at  the  close  of  the  testimony. 
135  N.  C.  492.  "We  then  held  there  was  some  evidence  that  Townsend 
was  the  agent  of  Westall  to  buy  the  lumber  for  him,  and,  although 
it  was  a  restricted  agency,  and  Townsend  could  only  buy  for  cash, 
yet,  if  Townsend  bought  lumber  from  the  plaintiff  on  Westall's  credit, 
and  the  latter  received  and  appropriated  it  to  his  own  use,  knowing 
at  the  time  it  had  been  so  bought,  he  would  be  liable  for  its  value. 
In  order  that  this  phase  of  the  case  might  be  submitted  to  the  jury, 
the  judgment  was  set  aside,  and  a  new  trial  awarded.  .  .  .  There 
was  evidence  at  the  last  trial  that  the  defendant  had  supplied  Town- 
send  with  sufficient  funds  to  buy  the  lumber.  In  Patton  v.  Brittain, 
32  N.  C.  8,  it  appeared  that  an  agent  was  given  authority  to  purchase 
personal  property  for  his  principal,  but  only  so  far  as  he  had  cash 
of  his  principal  with  which  he  was  to  pay  for  it.  The  agent  pur- 
chased on  the  credit  of  the  principal  without  paying  any  money,  and 
the  property  was  delivered  to  the  principal,  who  received  and  con- 
verted it  to  his  own  use.  The  court  held  that,  when  the  agent  vio- 
lated his  express  instructions,  and  bought  on  credit  instead  of  for 
cash,  the  principal  had  the  right  to  repudiate  the  contract,  and  to 
refuse  to  receive  the  articles,  but,  having  received  and  used  them  with 
knowledge  that  they  had  been  purchased  for  him  and  upon  his  credit, 
the  vendor  could  recover  from  him  the  price  of  the  goods.  It  was 
said  that  the  same  result  would  follow  whether  the  agent  acted  con- 
trary to  his  authority,  exceeded  it,  or  had  none  at  all;  it  being  the 
simple  case  of  the  goods  of  one  man  coming  to  the  use  of  another, 
which  he  knows  are  not  intended  as  a  gift,  but  are  sent  to  him  upon 
the  expectation  that  he  will  receive  and  pay  for  them.  A  mere  agency 
to  purchase  does  not  always  and  necessarily  imply  authority  to  pledge 
the  credit  of  the  principal,  and  when  the  agent  is  furnished  with 
funds  for  the  purpose  of  making  purchases  on  his  principal's  account 
he  cannot  bind  the  latter  by  a  purchase  on  credit,  unless,  perhaps, 
such  is  the  well-known  custom  of  trade,  or  unless  the  principal,  with 
notice  of  the  facts,  ratifies  the  transaction.  This  is  substantially 
the  principle  which  is  involved  in  this  case,  and  it  is  sanctioned  by 
the  best  authorities.  See  1  Am.  &  Eng.  Enc.  of  Law  (2d  ed.), 
pp.  1020,  1021,  where  the  cases  on  the  subject  are  collated.  This 
court  has  said  that  when  the  authority  to  buy  or  to  sell  is  given  in 
general  terms,  it  is  clear,  in  the  absence  of  any  restriction  to  the 
contrary,  that  the  agent  has  the  power  to  buy  for  cash  or  on  credit, 
as  he  may  deem  best,  and  to  sell  in  the  same  way.  Euffin  v.  Mebane, 
41  N.  C.  507.  It  may  be  taken,  then,  as  a  settled  principle  in  the 
law  of  agency,  that,  if  express  authority  to  buy  on  a  credit  is  not 
given  to  an  agent,  but  he  is  authorized  to  make  the  purchase,  and 
no  funds  are  advanced  to  him  to  enable  him  to  buy  for  cash,  he  is 
by  implication  clearly  authorized  to  purchase  on  the  credit  of  his 
principal,  because  when  an  agent  is  authorized  to  do  an  act  for  his 


CHAP.   IX.]  SCOPE   OF   PARTICULAR  POWERS,  355 

principal  all  the  means  necessary  for  the  accomplishment  of  the  act 
are  impliedly  included  in  the  authority,  unless  the  agent  be  in 
some  particular  expressly  restricted.  Sprague  v.  Gillett,  50  Mass. 
(9  Mete.)  91.  The  case  of  Komorowski  v.  Krumdick,  56  Wis.  23, 
is  much  like  ours.  The  court  there  held  that  an  agent  to  purchase 
property  must,  in  order  to  bind  his  principal,  who  furnishes  in 
advance  the  funds  to  make  the  purchase,  buy  for  cash,  unless  he  has 
express  power  to  buy  upon  credit,  or  unless  the  custom  of  the  trade 
is  to  buy  upon  credit;  and  in  the  absence  of  such  express  authority 
or  of  such  a  custom  the  agent  cannot  bind  his  principal  by  a  purchase, 
upon  a  credit,  of  a  person  who  is  ignorant  of  his  real  authority  as 
between  himself  and  his  principal,  unless  the  property  so  bought 
is  delivered  to  the  latter,  and  he  receives  it  knowing  that  his  agent 
actually  bought  on  credit,  or  that  he  had  no  funds  in  his  hands  at 
the  time  with  which  to  buy  the  same.  See,  also,  Jaques  v.  Todd, 
3  Wend.  83 ;  Willard  v.  Buckingham,  36  Conn.  395 ;  Proctor  v.  Tows, 
115  111.  138;  Paine  v.  Tillinghast,  52  Conn.  532;  Mechem  on  Agency, 
§  364.  While  these  principles  seem  not  to  have  been  seriously  ques- 
tioned by  the  defendant,  he  contended  that  Townsend  was  not  liis 
agent,  and  that,  even  if  he  was,  he  had  been  supplied  by  him  with 
more  than  sufficient  cash  with  which  to  buy  the  lumber  afterwards 
received  by  the  defendant,  and  that  Townsend  had  no  express 
authority  to  buy  on  credit. 

In  order  to  present  these  questions,  and  have  the  jury  pass  upon 
them,  the  defendant's  counsel  requested  the  court  to  give  certain 
instructions  to  the  jury;  and  among  others  the  following  one,  which 
was  the  subject  of  the  defendant's  second  prayer :  "  The  written 
contract  introduced  in  evidence  constituted  Townsend  the  agent  of 
Westall,  with  limited  authority  only.  As  such  agent,  Townsend  had 
authority  to  buy  lumber  for  cash,  with  money  furnished  him  by 
Westall,  but  he  did  not  have  authority  under  said  written  contract 
to  buy  lumber  on  Westall's  credit."  We  do  not  see  why  defendant 
was  not  entitled  to  this  instruction.  On  the  face  of  the  contract  it 
appeared  that  Townsend  was  directed  to  buy  only  for  cash,  and,  this 
being  so,  he  could  not,  of  course,  buy  on  credit,  contrary  to  the 
instructions  of  his  principal.  Whether  the  defendant  subsequently 
ratified  what  he  did,  and  is  therefore  liable  to  the  palintiff,  is  quite 
another  and  different  question. 

The  instruction  requested  in  the  defendant's  sixth  prayer  was  a 
proper  one,  and  should  have  been  given.  It  was  as  follows: 
"  Although  the  identical  lumber  in  controversy  came  into  possession 
of  defendant,  and  was  appropriated  by  him,  he  would  not  be  liable 
to  plaintiff  for  its  value  unless  he  had  authorized  Townsend  to  buy 
on  his  credit,  or  accepted  and  appropriated  the  lumber  with  notice 
of  the  fact  that  Townsend  had  bought  it  on  his  [defendant's]  credit." 
The  contract  expressly  required  Townsend  to  buy  for  cash,  and  the 


856  TAYLOR  V.   STARKEY.  [CHAP.  IX. 

only  possible  ground  of  defendant's  liability  is  that  he  received  and 
appropriated  the  lumber  to  his  own  use,  knowing  that  his  agent  had 
bought  it  on  his  credit,  or  that  he  had  not  provided  his  agent  with 
the  cash  to  buy  lumber,  in  which  case  he  would  have  implied 
authority  to  buy  on  credit,  and  that  fact  would  also  be  some  evidence 
of  notice  to  defendant  that  his  agent  had  so  bought.  1  Am.  &  Eng. 
Enc.  of  Law,  1021,  and  notes. 

There  was  error  in  the  refusal  to  give  the  instructions  contained 
in  the  second  and  sixth  prayers  of  defendant,  for  which  there  must 
be  another  trial.  New  trial. 


TAYLOE   V.    STARKEY. 

59  N.  H.  142.     1879. 

Trover,  for  an  organ.  Facts  found  by  the  court.  The  organ  was 
delivered  by  the  plaintiffs  to  one  Davis,  under  a  contract,  in  writing, 
in  which  it  was,  among  other  things,  stipulated  that  Davis  should 
make  efforts  to  sell  it  for  them,  and  pay  over  the  proceeds  less  his 
commissions.  It  was  agreed  that  the  plaintiffs  should  not  part  with 
their  title  until  they  were  paid.  The  contract  was  admitted  in 
evidence,  subject  to  the  defendant's  exception. 

The  defendant  received  the  organ  of  Davis  in  exchange  for  a 
buggy  and  $40  cash.  When  the  exchange  was  made,  Davis  informed 
the  defendant  that  he  was  the  plaintiff's  agent.  The  organ  was 
demanded  before  this  suit  was  brought. 

Stanley,  J.  The  contract  between  the  plaintiffs  and  Davis  was 
properly  admitted.  It  was  evidence  of  the  agreement  under  which 
Davis  was  in  possession,  and  tended  to  show  that  his  authority  was 
to  sell,  and  not  to  exchange.  In  the  absence  of  evidence  to  the  con- 
trary, to  sell  means  to  sell  for  cash.  Davis,  having  no  authority 
except  to  sell  for  cash,  could  not  lawfully  exchange  for  other  prop- 
erty, either  in  whole  or  in  part  (Story  on  Agency,  §  78),  and  if  he 
did  the  title  would  not  pass,  for  the  plaintiffs  did  not  hold  Davis  out, 
or  authorize  him  to  hold  himself  out,  as  owner  of  the  organ.  Holton 
V.  Smith,  7  N.  H.  446;  Bumham  v.  Holt,  14  N.  H.  367;  Towle  v. 
Leavittj  23  N.  H.  360.  Judgment  for  plaintijfs. 

Clark^  J.,  did  not  sit;  the  others  concurred. 


CHAP.   IX.]  SCOPE   OF  PARTICULAR  POWERS.  357 

WAED   V.    SMITH. 

7  Wall.  (U.  S.)  447.     1868. 

Error  to  the  circuit  court  of  Maryland. 

In  August,  1860,  William  Ward,  a  resident  of  Alexandria  in 
Virginia,  purchased  of  one  Smith,  of  the  same  place,  then  adminis- 
trator of  the  estate  of  Aaron  Leggett,  deceased,  certain  real  property 
situated  in  the  state  of  Virginia,  and  gave  him  for  the  consideration- 
money  three  joint  and  several  bonds  of  himself  and  Francis  Ward. 
These  bonds,  each  of  which  was  for  a  sum  exceeding  four  thousand 
dollars,  bore  date  of  the  2 2d  of  that  month,  payable,  with  interest, 
in  six,  twelve,  and  eighteen  months  after  date,  "  at  the  oflBce  of 
discount  and  deposit  of  the  Farmers'  Bank  of  Virginia,  at 
Alexandria." 

In  February,  1861,  the  first  bond  was  deposited  at  the  bank  desig- 
nated for  collection.  At  the  time  there  was  indorsed  upon  it  a  credit 
for  over  five  hundred  dollars ;  and  it  was  admitted  that,  subsequently, 
the  further  sum  of  twenty-five  hundred  dollars  was  received  by 
Smith,  and  that  the  amount  of  certain  taxes  on  the  estate  purchased, 
paid  by  the  Wards,  was  to  be  deducted. 

In  May,  1861,  Smith  left  Alexandria,  where  he  then  resided,  and 
went  to  Prince  William  County,  Virginia,  and  remained  within  the 
confederate  military  lines  during  the  continuance  of  the  Civil  War. 
He  took  with  him  the  other  two  bonds,  which  were  never  deposited 
at  the  Farmers'  Bank  for  collection.  While  he  was  thus  absent  from 
Alexandria,  William  Ward  deposited  with  the  bank  to  his  credit  at 
different  times,  between  June,  1861,  and  April,  1862,  various  sums, 
in  notes  of  different  banks  of  Virginia,  the  nominal  amount  of  which 
exceeded  by  several  thousand  dollars  the  balance  due  on  the  first 
bond.  These  notes  were  at  a  discount  at  the  time  they  were  deposited, 
varying  from  eleven  to  twenty-three  per  cent.  The  cashier  of  the 
bank  indorsed  the  several  sums  thus  received  as  credits  on  the  first 
bond;  but  he  testified  that  he  made  the  indorsement  without  the 
knowledge  or  request  of  Smith.  It  was  not  until  June,  1865,  that 
Smith  was  informed  of  the  deposits  to  his  credit,  and  he  at  once 
refused  to  sanction  the  transaction  and  accept  the  deposits,  and  gave 
notice  to  the  cashier  of  the  bank  and  to  the  Wards,  obligees  of  the 
bond,  of  his  refusal.  The  cashier  thereupon  erased  the  indorsements 
made  by  him  on  the  bond. 

Smith  now  brought  the  present  action  upon  the  three  bonds  to 
recover  their  entire  amount,  less  the  sum  credited  on  the  first  bond 
when  it  was  deposited,  the  sum  of  twenty-five  hundred  dollars,  subse- 
quently received  by  the  plaintiff,  and  the  amount  of  the  taxes  paid 
by  the  defendants  on  the  estate  purchased. 


358  WARD   V.   SMITH.  [CHAP.   IX. 

The  court  below  instructed  the  jury,  that  if  they  found  that  the 
defendants  executed  the  bonds,  the  plaintiff  was  entitled  to  recover 
their  amounts,  less  the  credit  indorsed  on  the  first  one,  and  the 
taxes  paid  by  the  defendants,  and  the  subsequent  payment  to 
the  plaintiff  with  interest  on  the  same.  The  plaintiff  recovered, 
and  the  defendants  brought  the  case  to  this  court  by  writ  of 
error. 

Mr.  Justice  Field,  after  stating  the  case,  delivered  the  opinion 
of  the  court,  as  follows: 

The  defendants  claim  that  they  are  entitled  to  have  the  amounts 
they  deposited,  at  the  Farmers'  Bank  in  Alexandria,  credited  to  them 
on  the  bonds  in  suit,  and  allowed  as  a  set-off  to  the  demand  of  the 
plaintiff.  They  make  this  claim  upon  these  grounds :  that  by  the  pro- 
vision in  the  bonds,  making  them  payable  at  the  Farmers'  Bank,  the 
parties  contracted  that  the  bonds  should  be  deposited  there  for  col- 
lection either  before  or  at  maturity ;  that  the  bank  was  thereby  con- 
stituted, whether  the  instruments  were  or  were  not  deposited  with  it, 
the  agent  of  the  plaintiff  for  their  collection ;  and  that  as  such  agent 
it  could  receive  in  payment,  equally  with  gold  and  silver,  the  notes 
of  any  banks,  whether  circulating  at  par  or  below  par,  and  discharge 
the  obligors. 

We  do  not  state  these  grounds  in  the  precise  language  of  counsel, 
but  we  state  them  substantially. 

It  is  undoubtedly  true  that  the  designation  of  the  place  of  pay- 
ment in  the  bonds  imported  a  stipulation  that  their  holder  should 
have  them  at  the  bank,  when  due,  to  receive  payment,  and  that  the 
obligors  would  produce  there  the  funds  to  pay  them.  It  was  in- 
serted for  the  mutual  convenience  of  the  parties.  And  it  is  the  gen- 
eral usage  in  such  cases  for  the  holder  of  the  instrument  to  lodge  it 
with  the  bank  for  collection,  and  the  party  bound  for  its  payment  to 
call  there  and  take  it  up.  If  the  instrument  be  not  there  lodged,  and 
the  obligor  is  there  at  its  maturity  with  the  necessary  funds  to  pay  it, 
he  so  far  satisfies  the  contract  that  he  cannot  be  made  responsible 
for  any  future  damages,  either  as  costs  of  suit  or  interest,  for  delay. 
When  the  instrument  is  lodged  with  the  bank  for  collection,  the 
bank  becomes  the  agent  of  the  payee  or  obligee  to  receive  payment. 
The  agency  extends  no  further,  and  without  special  authority  an 
agent  can  only  receive  payment  of  the  debt  due  his  principal  in  the 
legal  currency  of  the  country,  or  in  bills  which  pass  as  money  at 
their  par  value  by  the  common  consent  of  the  community.  In  the 
case  at  bar  only  one  bond  was  deposited  with  the  Farmers'  Bank. 
That  institution,  therefore,  was  only  agent  of  the  payee  for  its  col- 
lection. It  had  no  authority  to  receive  payment  of  the  other  bonds 
for  him  or  on  his  account.  Whatever  it  may  have  received  from  the 
obligors  to  be  applied  on  the  other  bonds,  it  received  as  their  agent, 
not  as  the  agent  of  the  obligee.    If  the  notes  have  depreciated  since 


CHAP.    IX.]  SCOPE   OF   PARTICULAR   POWERS.  359 

in  its  possession,  the  loss  must  be  adjusted  between  the  bank  and  the 
depositors;  it  cannot  fall  upon  the  holder  of  the  bonds. 

But  even  as  agent  of  the  payee  of  the  first  bond,  the  bank  was  not 
authorized  to  receive  in  its  payment,  depreciated  notes  of  the  banks 
of  Virginia.  The  fact  that  those  notes  constituted  the  principal  cur- 
rency in  which  the  ordinary  transactions  of  business  were  conducted 
in  Alexandria  cannot  alter  the  law.  The  notes  were  not  a  legal 
tender  for  the  debt,  nor  could  they  have  been  sold  for  the  amount 
due  in  legal  currency.  The  doctrine  that  bank  bills  are  a  good  tender, 
unless  objected  to  at  the  time,  on  the  ground  that  they  are  not  money, 
only  applies  to  current  bills,  which  are  redeemed  at  the  counter  of 
the  bank  on  presentation,  and  pass  at  par  value  in  business  trans- 
actions at  the  place  where  offered.  Notes  not  thus  current  at  their 
par  value,  nor  redeemable  on  presentation,  are  not  a  good  tender  to 
principal  or  agent,  whether  they  are  objected  to  at  the  time  or 
not.  .  .  . 

That  the  power  of  a  collecting  agent  by  the  general  law  is  limited 
to  receiving  for  the  debt  of  his  principal  that  which  the  law  declares 
to  be  a  legal  tender,  or  which  is  by  common  consent  considered  and 
treated  as  money,  and  passes  as  such  at  par,  is  established  by  all  the 
authorities.  The  only  condition  they  impose  upon  the  principal,  if 
anything  else  is  received  by  his  agent,  is,  that  he  shall  inform  the 
debtor  that  he  refuses  to  sanction  the  unauthorized  transaction  within 
a  reasonable  period  after  it  is  brought  to  his  knowledge.  Story  on 
Promissory  Notes,  §§  115,  389;  Graydon  v.  Patterson,  13  Iowa,  256; 
Ward  V.  Evans,  2  Lord  Raymond,  930 ;  Howard  v.  Chapman,  4  Car- 
rington  &  Payne,  508.  .  .  .  Judgment  affirmed. 


SWEETING   V.   PEARCE. 

7  C.  B.  (N.  s.)  449.     1859. 

The  plaintiff,  a  ship-builder  in  London,  employed  "Walton  &  Sons, 
insurance  brokers,  to  effect  a  policy  upon  a  ship  at  Lloyd's,  and, 
after  the  happening  of  a  loss,  gave  the  brokers  the  ship's  papers  for 
the  purpose  of  enabling  them  to  adjust  the  loss  with  the  underwriters. 
The  policy  was  effected  in  the  brokers'  name,  and  they  retained  pos- 
session of  it.  An  adjustment  having  taken  place,  the  loss  was  settled 
by  the  underwriters  setting  off  the  amount  payable  by  them  upon  the 
policy  against  the  balance  due  to  them  from  the  brokers  for  pre- 
miums on  other  policies  effected  by  them.  Plaintiff,  claiming  that 
the  brokers  had  no  authority  to  settle  in  this  manner,  sued  the  de- 
fendant on  the  policy.  The  jury  found  that  the  settlement  was  made 
in  accordance  with  a  usage  prevailing  at  Lloyd's,  which  was  found 
to  be  generally  known  to  merchants  and  shipowners,  but  which  the 


360  SWEETING   V.   PEAECE.  [CHAP.   IX. 

jury  foimd  was  not  known  to  the  plaintiff,  who  had  merely  left  the 
policy  in  the  bands  of  the  brokers  for  safe  custody. 

The  court  directed  a  verdict  for  plaintiff  for  the  amount  claimed, 
and  defendant  moved  to  set  aside  this  verdict. 

Byles,  J.  I  entirely  accede  to  the  proposition  that,  when  Walton 
&  Sons  were  intrusted  with  the  policy,  they  were  entitled  to  receive 
the  money  under  it  from  the  defendant.^  The  policy  was  the  title- 
deed,  which  they  had  no  authority  to  hand  over  to  the  defendant 
without  receiving  payment.  On  that  point,  I  agree  with  the  view 
taken  by  the  defendant's  counsel.  But,  on  the  other  hand,  I  think 
the  plaintiff  gave  Walton  &  Sons  no  authority  to  settle  the  loss  in 
the  way  they  did.  It  is  not  disputed  that  the  general  rule  of  law  is, 
that  an  authority  to  an  agent  to  receive  money  implies  that  he  is  to 
receive  it  in  cash.  If  the  agent  receives  the  money  in  cash,  the  prob- 
ability is  that  he  will  hand  it  over  to  his  principal ;  but,  if  he  is  to 
be  allowed  to  receive  it  by  means  of  a  settlement  of  accounts  between 
himself  and  the  debtor,  he  might  not  be  able  to  pay  it  over:  at  all 
events,  it  would  very  much  diminish  the  chance  of  the  principal  ever 
receiving  it;  and,  upon  that  principle,  it  has  been  held  that  the 
agent,  as  a  general  rule,  cannot  receive  payment  in  anything  else 
but  cash.  Unless,  therefore,  there  is  some  usage  to  control  it,  pay- 
ment to  the  agent  must  be  made  in  money.  Then,  what  is  the  usage 
relied  on  to  take  this  case  out  of  that  general  rule?  It  is  not  the 
usage  of  London,  but  the  practice  of  keeping  accounts  adopted  at  a 
particular  place.  It  does  not  fall  within  the  description  of  a  general 
custom  or  usage,  but  it  is  only  the  usage  at  a  particular  place,  —  of 
a  particular  counting-house,  I  may  say.  Independently,  therefore, 
of  any  authority  upon  the  subject,  I  should  have  thought  it  would 
have  been  necessary  to  have  brought  knowledge  of  such  usage  hoiue 
to  the  plaintiff  before  he  could  have  been  affected  by  it.  In  addition 
to  the  authorities  which  have  been  cited,  I  may  observe  that  Mr. 
Smith,  in  his  work  on  Mercantile  Law,  6th  ed.,  p.  347,  says,  "  The 
usage  of  Lloyd's,  being  prima  facie  only  the  usage  of  a  single  house, 
will  not  be  binding  upon  one  who  cannot  be  shown  to  be  acquainted 
with  it."  Then  there  have  been  three  cases  at  least,  Todd  v.  Reid, 
4  B.  &  Aid.  210;  Scott  v.  Irving,  1  B.  &  Ad.  605;  and  Gabay  v. 
Lloyd,  3  B.  &  C.  793,  in  which  it  has  been  held  that  the  principal 
is  not  affected  unless  he  be  shown  to  have  been  cognizant  of  the  usage. 
Upon  principle,  therefore,  as  well  as  upon  authority,  I  think  that 
the  brokers  in  the  present  case  had  authority  from  the  plaintiff  to 
receive  the  loss  only  in  cash.  It  was  urged  by  Mr.  Wilde  in  the 
course  of  his  argument,  that  there  was  here  an  apparent  authority 
for  the  brokers  to  receive  a  settlement  in  the  way  they  did.     The 

*  CocKBCRN,  C.  J.  ..."  I  quite  concur  In  the  first  point  contended  for  by  the 
defendant's  counsel,  that,  the  policy  remaining  In  the  hands  of  the  brokers,  the 
plaintiff  Is  estopped  from  saying  that  It  was  not  In  their  hands  with  authority  t'> 
collect." 


CHAP,   IX.]  SPECIAL   FORMS   OF   AGENCY.  361 

apparent  authority,  however,  must  be  derived  from  the  principal: 
and  it  still  brings  it  back  to  the  question  whether  the  latter  ever 
knew,  or  was  blameable  for  not  knowing,  the  usage.  Upon  principle 
and  authority  equally,  I  think  this  rule  ought  to  be  discharged. 

Rule  discharged.^ 


3.    Special  Forms  of  Agency, 
a.    Factoes. 

PICKERING   V.   BUSK. 
15  East  (K.  B.)  38.    1812. 

Trover  for  hemp.  Verdict  for  defendants.  Eule  to  set  aside 
verdict. 

One  Swallow,  a  factor  or  broker,  purchased  for  plaintiff  a  quantity 
of  hemp  which,  by  desire  of  plaintiff,  was  transferred  in  the  wharf- 
inger's book  to  the  name  of  Swallow.  Later  Swallow  purchased 
more  hemp  for  plaintiff,  which  was  transferred  to  the  name  of  Pick- 
ering or  Swallow.  Swallow,  as  factor  or  broker,  sold  hemp  to  de- 
fendants' assignors,  and  transferred  to  them  plaintiff's  hemp. 

Lord  Ellenborough,  C.  J.  It  cannot  fairly  be  questioned  in  this 
case  but  that  Swallow  had  an  implied  authority  to  sell.  Strangers 
can  only  look  to  the  acts  of  the  parties,  and  to  the  external  indicia 
of  property,  and  not  to  the  private  communications  which  may  pass 
between  a  principal  and  his  broker:  and  if  a  person  authorize  an- 
other to  assume  the  apparent  right  of  disposing  of  property  in  the 
ordinary  course  of  trade,  it  must  be  presumed  that  the  apparent 
authority  is  the  real  authority.  I  cannot  subscribe  to  the  doctrine, 
that  a  broker's  engagements  are  necessarily  and  in  all  cases  limited 
to  his  actual  authority,  the  reality  of  which  is  afterwards  to  be  tried 
by  the  fact.  It  is  clear  that  he  may  bind  his  principal  within  the 
limits  of  the  authority  with  which  he  has  been  apparently  clothed 
by  the  principal  in  respect  of  the  subject-matter;  and  there  would 
be  no  safety  in  mercantile  transactions  if  he  could  not.  If  the  prin- 
cipal sends  his  commodity  to  a  place,  where  it  is  the  ordinary  business 
of  the  person  to  whom  it  is  confided  to  sell,  it  must  be  intended  that 
the  commodity  was  sent  thither  for  the  purpose  of  sale.  If  the  owner 
of  a  horse  sends  it  to  a  repository  of  sale,  can  it  be  implied  that  he 
sent  it  thither  for  any  other  purpose  than  that  of  sale?  Or  if  one 
sends  goods  to  an  auction-room,  can  it  be  supposed  that  he  sent  them 
thither  merely  for  safe  custody?  Where  the  commodity  is  sent  in 
such  a  way  and  to  such  a  place  as  to  exhibit  an  apparent  purpose  of 

i  Affirmed.  9  C.  B.  (n.  s.)  534. 


362  PICKERING  V.  BUSK.  [CHAP.  EC 

sale,  the  principal  will  be  bound,  and  the  purchaser  safe.  The  case 
of  a  factor  not  being  able  to  pledge  the  goods  of  his  principal  con- 
fided to  him  for  sale,  though  clothed  with  an  apparent  ownership, 
has  been  pressed  upon  us  in  the  argument,  and  considerably  dis- 
tressed our  decision.  The  court,  however,  will  decide  that  question 
when  it  arises,  consistently  with  the  principle  on  which  the  present 
decision  is  founded.  It  was  a  hard  doctrine  when  the  pawnee  was 
told  that  the  pledgor  of  the  goods  had  no  authority  to  pledge  them, 
being  a  mere  factor  for  sale;  and  yet  since  the  case  of  Paterson  v. 
Tash,^  that  doctrine  has  never  been  overturned.^  I  remember  Mr. 
Wallace  arguing,  in  Campbell  v.  Wright,  4  Burr.  2046,  that  the  bills 
of  lading  ought  to  designate  the  consignee  as  factor,  otherwise  it 
was  but  just  that  the  consignors  should  abide  by  the  consequence  of 
having  misled  the  pawnees.  The  present  case,  however,  is  not  the 
case  of  a  pawn,  but  that  of  a  sale  by  a  broker  having  the  possession 
for  the  purpose  of  sale.  The  sale  was  made  by  a  person  who  had  all 
the  indicia  of  property :  the  hemp  could  only  have  been  transferred 
into  his  name  for  the  purpose  of  sale;  and  the  party  who  has  so 
transferred  it  cannot  now  rescind  the  contract.  If  the  plaintiff  had 
intended  to  retain  the  dominion  over  the  hemp,  he  should  have  placed 
it  in  the  wharfinger's  books  in  his  own  name. 

Grose,  J.  The  question,  whether  the  plaintiff  is  bound  by  the  act 
jof  Swallow,  depends  upon  the  authority  which  Swallow  had.  This 
being  a  mercantile  transaction,  the  jury  was  most  competent  to 
decide  it;  and  if  I  had  entertained  any  doubt,  I  should  rather  have 
referred  the  question  to  them  for  their  determination:  but  I  am 
perfectly  satisfied;   I  think  Swallow  had  a  power  to  sell. 

LeBlanc,  J.  The  law  is  clearly  laid  down,  that  the  mere  posses- 
sion of  personal  property  does  not  convey  a  title  to  dispose  of  it; 
and,  which  is  equally  clear,  that  the  possession  of  a  factor  or  broker 
does  not  authorize  him  to  pledge.  But  this  is  a  case  of  sale.  The 
question  then  is  whether  Swallow  had  an  authority  to  sell.  To 
decide  this  let  us  look  at  the  situation  of  the  parties.  Swallow  was 
a  general  seller  of  hemp :  the  hemp  in  question  was  left  in  the  cus- 
tody of  the  wharfingers,  part  in  the  name  of  Swallow,  and  part  in  the 
name  of  plaintiff  or  Swallow,  which  is  the  same  thing,  ^ow  for 
what  purpose  could  the  plaintiff  leave  it  in  the  name  of  Swallow, 
but  that  Swallow  might  dispose  of  it  in  his  ordinary  business  as 
broker;  if  so,  the  broker  having  sold  the  hemp,  the  principal  is 
bound.  This  is  distinguishable  from  all  the  cases  where  goods  are 
left  in  the  custody  of  persons,  whose  proper  business  it  is  not  to  sell. 

Bayley,  J.  It  may  be  admitted  that  the  plaintiff  did  not  give 
Swallow  any  express  authority  to  sell ;  but  an  implied  authority  may 

»  2  Stra.  1178. 

*  For  changes  In  common  law  doctrines  effected  by  the  Factors'  Acts,  se6 
post,  pp.  507-519. 


CHAP.    IX.]  SPECIAL   FORMS   OF   AGENCY.  363 

be  given:  and  if  a  person  put  goods  into  the  custody  of  another 
whose  common  business  it  is  to  sell,  without  limiting  his  authority, 
he  thereby  confers  an  implied  authority  upon  him  to  sell  them. 
Swallow  was  in  the  habit  of  buying  and  selling  hemp  for  others,  con- 
cealing their  names.  And  now  the  plaintiff  claims  a  liberty  to 
rescind  the  contract,  because  no  express  authority  was  given  to  Swal- 
low to  sell.  But  is  it  competent  to  him  so  to  do?  If  the  servant  of 
a  horse-dealer,  with  express  directions  not  to  warrant,  do  warrant, 
the  master  is  bound;  because  the  servant,  having  a  general  authority 
to  sell,  is  in  a  condition  to  warrant,  and  the  master  has  not  notified 
to  the  world  that  the  general  authority  is  circumscribed.  This  case 
does  not  proceed  on  the  ground  of  a  sale  in  market  overt,  but  it  pro- 
ceeds on  the  principle,  that  the  plaintiff  having  given  Swallow  an 
authority  to  sell,  he  is  not  at  liberty  afterwards,  when  there  has  been 
a  sale,  to  deny  the  authority.  Rule  discharged} 


b.   Brokers. 

HIGGINS   V.   MOORE. 

34  N.  Y.  417.     1866. 

Action  for  the  price  of  a  cargo  of  rye  sold  and  delivered  by  plain- 
tiffs to  defendant.  Defence,  payment  to  plaintiffs'  agent  through 
whom  defendant  purchased.  Judgment  for  defendant.  Plaintiffs 
appeal. 

,  The  sale  was  negotiated  by  a  broker  in  New  York,  plaintiffs  re- 
siding in  Albany.  Defendant,  before  the  delivery  of  the  grain,  knew 
that  plaintiffs  were  the  principals.  The  broker  never  had  possession 
of  the  grain.  The  defendant  relied  upon  a  usage  of  trade  in  New 
York  which  allowed  such  payments  to  a  broker  when  the  seller  resided 
out  of  the  city  of  New  York. 

Peckham,  J.  The  judgment  was  sustained  in  the  superior  court 
mainly  on  the  ground  that  a  grain  broker,  who  had  never  had  pos- 
session of  the  rye  sold,  but  was  only  authorized  to  contract  for  its 
sale,  had  thereby  an  implied  authority  to  receive  the  purchase  price. 
The  court  was  not  satisfied  with  the  finding  of  the  fact  by  the  referee 
as  to  the  usage  of  trade  which  allowed  a  payment  to  a  broker,  but 
did  not  set  it  aside.  I  agree  that  the  evidence  is  entirely  unsatis- 
factory to  establish  any  such  usage.  To  my  mind,  it  is  utterly  in- 
sufficient. This  court,  however,  has  no  authority  to  interfere  with 
this  judgment  on  that  ground.    The  fact,  as  found,  is  conclusive  here. 

»  See  also  Daylight  Burner  Co.  v.  Odlin,  51  N.  H.  56,  ante,  p,  350;  and  Baxter 
r.  Sberman,  73  Minn.  434,  post,  p.  432. 


364  HIGGINS   V.   MOORE.  [CHAP.    IX. 

The  first  question  arising  here  is,  had  the  broker,  merely  as  such, 
authority  to  receive  payment?  I  think  he  had  not.  In  Baring  v. 
Corrie  (2  B.  &  Aid.  137),  Holroyd,  J.,  said,  "A  factor  who  has  the 
possession  of  goods  differs  materially  from  a  broker.  The  former  is 
one  to  whom  goods  are  sent  or  consigned.  He  not  only  has  the  pos- 
session, but  generally  a  special  property  in  them ;  but  the  broker  has 
not  the  possession,  and  so  the  vendee  cannot  be  deceived  by  that; 
besides  employing  a  broker  to  sell  goods  does  not  authorize  him  to 
sell  in  his  own  name." 

In  that  case  it  was  held  that  the  purchaser  from  a  broker  had  no 
authority  to  set  off  a  debt  against  the  broker,  on  the  ground  that  the 
broker  had  no  authority  to  sell  in  his  own  name.  Brokers  are  de- 
fined to  be  "  those  who  make  contracts  between  merchants  and  trades- 
-men,  in  matters  of  money  and  merchandise,  for  which  they  have  a 
fee."    1  Liv.  on  Agency,  73,  ed.  of  1818. 

It  has  been  questioned  among  civilians,  says  Livermore,  whether 
an  authority  to  sell  or  let  includes  an  authority  to  receive  the  price 
or  not,  and  that  Pothier  says  this  power  is  not  generally  included. 
Id.  p.  74;  Pothier's  Traite  des  Obligations,  477.  But,  that  in  some 
cases  it  will  be  presumed,  as  if  goods  are  put  into  the  hands  of  public 
brokers  to  be  sold,  and  they  are  in  the  habit  of  receiving  the  price. 
Putting  the  goods  in  their  hands  implies  an  authority  to  receive 
payment  (2  Liv.  284,  285),  as  it  does  to  receive  payment  on  securi- 
ties.   3  Chit.  Com.  Law,  207,  208. 

The  general  doctrine  is,  that  a  broker  employed  to  sell  has  no 
authority  as  such  to  receive  payment.  Kussell  on  Factors  and 
Brokers,  48  Law  Lib.  68-110;  Mynn  v.  Joliffe,  1  Wood  &  Rob.  326; 
Baring  v.  Corrie,  2  B.  &  Aid.  137.  Exception  is  made  to  this  gen- 
eral rule  in  some  cases  where  the  principal  is  not  disclosed.  Smith's 
Mer.  L.  129,  by  Hoi.  &  Gholson;  see  also,  as  throwing  light  upon 
this  question,  though  not  directly  in  point,  Whitbeck  v.  Waltham, 
1  Sol.  157 ;  Morris  v.  Cleasby,  1  M.  &  S.  576.  Story  says,  an  agent 
to  conclude  a  contract  is  not,  of  course,  authorized  to  receive  pay- 
ment thereunder.    Story  on  Agency,  §  98,  and  cases  there  cited. 

Where  the  person  contracting  for  the  sale  has  the  property  in  his 
possession,  and  delivers  it,  he  is  clothed  with  the  iridicia  of  authority 
to  receive  payment,  especially  when  the  owner  is  not  known.  Such 
are  the  cases  referred  to  by  the  court  below.  He  is  then  clothed  with 
apparent  authority,  and  that,  as  to  third  persons,  is  the  real  author- 
ity. Capel  V.  Thornton,  3  Car.  &  P.  352 ;  Pickering  v.  Busk,  15  East, 
38.  In  the  latter  case  the  property  had  been  put  into  the  possession 
of  the  broker  and  the  title  in  his  name.  "  The  sale  was  made  by  a 
person  who  had  all  the  indicia  of  property."  Ireland  v.  Thompson, 
4  Com.  Bench  E.  149 ;  Cross  v.  Hasking,  13  Vt.  536.  In  this  case, 
in  the  facts  as  stated,  it  does  not  distinctly  appear;   but  it  was  so 


CHAP.   IX.j  SPECIAL  FORMS   OF   AGENCY.  365 

stated  in  the  syllabus  of  the  case  by  the  reporter.  Hackney  v.  Jones, 
3  Humph.  612. 

In  the  case  at  bar,  however,  the  broker  never  had  possession  of  the 
rye,  and  never  delivered  it;  but  the  plaintiffs  retained  possession  till 
they  delivered  to  the  defendant,  and  they  vrere  well  known  to  the 
defendant;  one  of  them  had  taken  part  in  the  negotiation  for  the 
sale,  as  owner,  in  the  city  of  New  York.  The  broker  was  simply 
authorized  to  make  a  contract  for  the  sale.  This  was  the  whole  of 
his  authority  in  reality,  and  he  had  no  other  or  further  apparent 
authority. 

Irrespective  of  the  usage  found  by  the  referee,  therefore,  the  de- 
fendant was  not  discharged  by  a  payment  to  the  broker. 

Does  that  usage  discharge  him?  In  other  words,  did  the  usage 
give  the  broker  an  authority  to  receive  payment  which  otherwise  did 
not  belong  to  him  ?  There  is  no  authority  in  this  state  on  this  point, 
and  none  in  principle,  I  think,  that  sustains  the  affirmative  of  such 
a  position. 

Mr.  Justice  Story,  after  referring  to  various  cases  of  authority  in 
agents  to  receive  payment  on  bonds,  etc.,  and  whether  before  due  or 
not,  and  to  other  cases,  adds :  "  But  if  there  be  a  known  usage  of 
trade,  or  course  of  business  in  a  particular  employment,  or  habit  of 
dealing  between  the  parties,  extending  the  ordinary  reach  of  the 
authority,  that  may  well  be  held  to  give  full  validity  to  the  act."  Story 
on  Agency,  §  98.  In  another  section  he  says :  "  Payments  made  to 
agents  are  good  in  all  cases  where  the  agent  is  authorized  to  receive 
them,  either  by  express  authority  or  by  that  resulting  from  the  usage 
of  trade,  or  from  the  particular  dealings  between  the  parties."  Id. 
§  249.  The  authorities  referred  to  are,  2  B.  &  Aid.  137 ;  1  East,  36 ; 
and  1  M.  &  Sel.  576,  579,  besides  writers  on  agency. 

Baring  v.  Corrie  (2  B,  &  Aid.  137)  simply  holds,  that  where  the 
broker  sells  without  disclosing  his  principal,  he  acts  beyond  his  au- 
thority, and  the  buyer  cannot  set  off  a  debt  against  the  broker  in 
answer  to  an  action  for  the  goods. 

In  Foveus  v.  Bennet  (11  Cow.  86),  it  is  true  that  Lord  Ellen- 
borough  referred  the  case  to  a  jury  to  find  whether  a  payment  made 
to  a  broker  had  been  made  according  to  the  usage  of  trade.  They 
found  it  had  been.  It  was  also  referred  to  the  jury  to  find  what  the 
words  (in  the  bought  and  sold  note  given  to  each  party)  meant  of 
"payment  in  a  month,  money."  They  found  those  words  meant 
**  payment  at  any  time  within  a  month." 

In  that  case  the  brokers  were  entitled  to  receive  pa)rment,  as  they 
themselves  made  the  delivery  of  the  property,  and  were,  therefore, 
intrusted  with  its  possession.  That  confessedly  gave  them  the  right 
to  receive  payment.  They  were  then  factors.  The  question  litigated 
there  was,  whether  the  broker  had  the  right  to  receive  the  payment 


366  HIGGINS   V.   MOORE.  [CHAP.   IX. 

before  the  expiration  of  the  month,  not  whether  they  had  the  right 
to  receive  it  at  all.  The  interpretation  of  the  words  in  the  notes 
settled  that,  —  a  very  proper  office  of  usage.  Morris  v.  Cleasby 
(1  M.  &  S.  576)  simply  decides  that,  after  the  principal  is  disclosed, 
a  purchaser  has  no  right  to  pay  a  factor  for  the  goods. 

We  are  referred,  by  the  counsel  for  the  respondent,  to  Campbell  v. 
Hassell  (1  Stark.  233),  where  no  question  of  usage  of  trade  arose, 
except  when  the  defendant  offered  to  show  "that,  by  usage  of  the 
trade,  a  bill  at  two  months,  with  a  discount,  might  be  submitted  for 
the  original  terms  of  a  bill  at  four  months."  But  Lord  Ellenborough 
refused  to  hear  any  evidence  to  this  effect,  observing  that  it  would 
be  productive  of  intolerable  mischief  to  permit  brokers  to  deviate 
from  the  original  terms  of  the  contracts;  and  the  payment  there 
made  to  the  broker  was  held  unauthorized,  and  no  defence  to  the 
purchaser. 

In  Stewart  v.  Aberdeen  (4  Mees.  &  Wels.  211),  the  insurance 
company  had  paid  the  agent,  and  it  was  held  valid,  on  the  ground 
that  the  prior  dealings  between  the  parties  had  authorized  it. 

In  Graves  v.  Legg  (11  Exch.  642),  a  broker  at  Liverpool  had 
purchased  a  quantity  of  wool  for  merchants  in  London,  and  the 
vendors  gave  to  the  broker  notice  of  the  vessels  in  which  they  would 
ship  it  to  the  purchasers.  It  was  proved  to  have  been  the  universal 
usage  at  Liverpool  to  give  such  notice  to  the  broker,  and  that  it  was 
his  duty  to  communicate  it  to  the  purchaser;  held,  a  valid  perform- 
ance by  the  sellers ;  that  the  notice  thus  given  according  to  the  usage 
of  trade  was  sufficient. 

Authority  to  receive  such  a  notice  is  of  a  very  different  character 
and  responsibility  from  an  authority  in  a  broker  to  receive  payment 
for  goods. 

Russell  on  Factors  and  Agents,  48  Law  Lib.  68,  while  he  denies 
the  authority  of  a  broker  as  such  to  receive  payment,  adds  that  he 
may,  "  if  the  custom  of  trade  or  the  usual  course  of  dealing  between 
himself  and  his  principal  warrant  it " ;  and  he  cites  Baring  v.  Corrie, 
2  B.  &  Aid.  137,  before  referred  to,  when  the  only  point  decided,  as 
we  have  seen,  was  that  a  broker  had  no  right  to  sell  in  his  own  name, 
and,  of  course,  no  right  to  receive  payment.  The  duties  and  rights 
of  the  broker  to  contract  for  the  sale  of  the  grain  were  as  clear  and 
well  defined  in  this  case,  as  the  duties  and  rights  of  a  pledgee  of  stock, 
or  of  choses  in  action.  The  law  defined  them.  It  was  no  part  of  his 
duty  to  receive  payment  when  the  principal  was  known,  and  he  never 
had  possession  of  the  rye.  That  was  no  part  or  branch  of  his  assumed 
duty,  which  was  simply  to  contract  for  a  sale.  There  was  nothing 
uncertain  or  obscure  in  the  broker's  legal  duty  that  required  or  justi- 
fied proof  of  usage  to  make  certain  or  plain.  It  gave  an  addition,  — 
a  clear  addition  to,  not  an  explanation  of,  his  authority. 

No  usage  is  admissible  to  control  the  rules  of  law.     In  Wheeler 


CHAP.   IX.]  SPECIAL   FORMS   OF   AGENCY.  367 

and  Newbold,  16  iN".  Y.  392,  this  court  held  that  proof  of  usage  of 
brokers  in  New  York  city  to  sell  choses  in  action  pledged  to  them 
in  a  mode  unauthorized  by  law,  was  inadmissible.  And  so  it  has 
been  held  of  stock  pledged  to  brokers.  Allen  v.  Dykers,  7  Hill,  497 ; 
and  see  Bowen  v.  Newell,  4  Seld.  190 ;  Merchants'  Bank  v.  Woodruff, 
6  Hill,  174.  So  usage  is  not  admissible  to  contradict  the  contract. 
Clark  V.  Baker,  11  Met.  186 ;  Blackett  v.  Assurance  Co.,  2  Tyrw.  266. 
In  this  case  the  law  defined  the  rights  and  duties  of  this  broker  as 
clearly  as  it  did  those  of  the  pledgee  of  stock  in  Allen  v.  Dykers,  or 
of  choses  in  action  in  Bowen  v.  Newell,  and  they  could  no  more  be 
controlled  by  usage. 

Usages  of  merchants  have  been  sparingly  adopted  by  courts  in  this 
state,  and  in  my  opinion  properly,  too.  Mr.  Justice  Story  says  they 
are  often  founded  in  mere  mistake,  and  more  often  in  want  of  enlarged 
views  of  the  full  bearing  of  principles.  Donnell  v.  Col.  Ins.  Co., 
2  Sum.  377.  The  usage,  as  found,  seems  to  me  entirely  unreason- 
able, and  to  uphold  it  would  be  fraught  with  mischief.  Brokers  are 
thereby  allowed  to  receive  payment  for  principals  living  out  of  the 
city,  and  by  implication,  not  for  those  residing  in  the  city.  Sound 
reason  would  seem  to  call  for  an  opposite  rule,  as  city  dealers  might 
well  be  supposed  to  be  well  acquainted  with  the  brokers,  and  to  know 
who  were  worthy  of  trust ;  while  country  dealers  would  be  very  likely 
to  share  the  fate  of  these  plaintiffs,  —  a  grain  broker,  as  the  evidence 
shows,  being  quite  likely  to  be  without  pecuniary  responsibility.  The 
purchaser  need  never  incur  risk,  as  he  may  learn  the  name  of  the 
principal  and  always  pay  him  with  safety. 

In  this  case  it  would  seem  from  the  defendant's  testimony,  that 
this  money  was  obtained  from  him,  not  under  any  usage,  but  by  the 
false  pretence  of  the  broker  that  the  plaintiffs  had  drawn  upon  him 
for  the  proceeds  of  the  rye,  and  thereby  impliedly  authorized  him  to 
collect. 

The  judgment,  I  think,  should  be  reversed,  and  a  new  trial  ordered, 
costs  to  abide  the  event. 

Wright,  J.,  also  read  for  the  reversal.  Judgment  reversed. 


c.   Auctioneers. 
PAYNE    V.   LOED   LECONFIELD. 

51  L.  J.  Q.  B.   (N.  s.)  642.     1882. 

Rule  for  a  new  trial,  on  the  ground  that  the  judge  misdirected 
the  jury,  in  directing  them  to  find  a  verdict  for  the  defendant. 
The  action  was  for  damages  for  a  breach  of  warranty  on  the  sale 


368  PAYNE   V.   LORD  LECONFIELD.  [CHAP.   IX. 

of  a  horse.  At  the  trial  before  Bowen,  J.,  and  a  special  jury,  evi- 
dence was  given  that  the  mare  Polyxo  was  sent  by  the  defendant  to 
the  horse  depository  of  Messrs.  Tompkins  &  Sons,  at  Heading,  for 
sale  by  public  auction.  At  the  time  the  mare  was  sent  a  form  sup- 
plied by  Tompkins  was  partially  filled  up  on  the  defendant's  behalf 
and  returned. 

Evidence  was  given  that  on  the  day  of  the  sale  the  mare,  when 
brought  out,  was  observed  by  a  bystander  to  have  a  discharge  from 
her  nostrils,  whereupon  Tompkins,  the  auctioneer,  said,  in  the 
plaintiff's  hearing,  "  You  need  not  be  afraid.  The  mare  comes 
from  Lord  Leconfield;  she  has  only  got  a  cold  upon  her,  and  I  shall 
sell  her  as  only  having  a  cold."  The  mare  was  knocked  down  to  the 
plaintiff  for  eight  and  a  half  guineas.  The  mare  was  subsequently 
pronounced  to  be  suffering  from  chronic  glanders,  and,  with  other 
horses  belonging  to  the  plaintiff,  and  alleged  to  have  been  infected 
by  her,  was  eventually  shot  under  an  order  of  the  local  authority. 
The  learned  judge  left  certain  questions  to  the  jury;  but  they  were 
unable  to  agree  on  their  verdict.  Whereupon  he  directed  a  verdict 
to  be  entered  for  the  defendant,  on  the  ground  that  there  was  no 
evidence  of  authority  by  the  defendant  to  warrant  the  horse. 

Grove,  J.  The  only  question  upon  which  there  is  any  doubt  in 
my  mind  in  this  case  is  whether  the  judge  ought  to  have  directed  a 
verdict.  I  should  have  had  no  hesitation  in  discharging  the  rule  if 
the  queation  had  been  left  to  the  jury.  The  question  is  whether  an 
auctioneer,  in  the  absence  of  express  authority  from  his  principal, 
or  even  in  spite  of  his  authority,  can  warrant  an  article  sold  at  a  sale. 
In  regard  to  that  naked  proposition,  I  say  he  cannot.  I  do  not  say 
that  there  may  not  be  cases  or  circumstances  in  which  he  would  have 
authority,  but  no  case  goes  the  length  contended  for.  The  only 
authority  is  a  passage  from  Story,  in  regard  to  representations,  and 
he  says  that  the  question  has  never  been  decided  as  to  a  warranty. 
There  may  be  hardships  in  deciding  either  way.  A  person  who  goes 
to  a  sale  has  no  means  of  testing  the  authority  of  the  auctioneer  to 
make  statements,  so  that  there  is  some  hardship  in  this  case.  It  is 
not  very  great,  because  the  auctioneer  may  be  sued.  There  is  still 
greater  hardship  on  the  vendor.  If  a  picture  were  sent  without  any 
authority  to  warrant  the  painter,  and  the  auctioneer  warrant  it,  the 
owner  might  be  involved  in  enormous  liability.  The  rule,  if  it  ex- 
isted, would  be  a  very  formidable  rule,  and  there  would  be  examples 
of  it.  It  has  been  held  at  nisi  prius  that  a  servant  going  to  a  fair 
fo  sell  a  horse  has  authority  to  warrant  it;  but  in  Brady  v.  Todd, 
9  Com.  B.  Eep.  (n.  s.)  592;  30  Law  J.  Eep.  C.  P.  223,  a  servant  of 
the  owner  of  a  horse  entrusted  to  sell  it  on  that  occasion  only  was 
held  not  to  bind  his  master.  It  is  different  in  the  case  of  dealers* 
servants.  An  auctioneer  receives  miscellaneous  articles  of  all  de- 
scriptions to  sell  for  others.    He  is  simpUciter  an  agent  to  sell.    His 


CHAP.    IX.]  SPECIAL   FORMS   OF   AGENCY.  369 

duty  would  be  to  inquire  of  his  principal  if  it  were  desirable  that  a 
warranty  should  be  given.  The  auctioneer  is  naturally  anxious  to 
sell  and  to  enhance  the  price.  In  this  case  there  was  no  complete 
delegation  of  authority,  but  there  was  enough  to  show  an  intelligent 
auctioneer  that  he  had  no  authority  to  warrant.  The  form  was 
filled  up  as  to  color,  age,  and  sex,  and  the  horse  is  described  as  a 
kennel  hack.  The  answers  to  all  the  other  questions  are  left  blank, 
meaning  that  as  to  them  the  owner  says  nothing.  He  filled  up  what 
he  gave  authority  to  warrant,  he  omitted  what  he  did  not  give  author- 
ity to  warrant.  It  was  not  argued  that  the  auctioneer  could  warrant 
80  as  to  bind  the  defendant,  in  spite  of  a  refusal  on  the  part  of  the 
defendant  to  warrant;  but  the  argument  if  good  at  all  must  go 
as  far.  Rule  discharged.^ 


BELL   V.   BALLS. 

[1897]  1  Ch.  663. 

This  was  an  action  by  the  plaintiffs  as  vendors  of  certain  freehold 
property  known  as  "  The  Biddings,"  for  specific  performance  of  an 
alleged  agreement  by  the  defendant  to  purchase  the  same.  The 
plaintiffs  caused  the  property  in  question  to  be  put  up  for  sale  by 
auction  by  Messrs.  Herring,  Son  &  Daw,  a  firm  of  auctioneers,  upon 
the  terms  expressed  in  printed  particulars  and  conditions  of  sale,  at 
the  end  of  which  was  a  memorandum  of  agreement  in  blank.  The 
defendant  attended  the  sale.  Upon  Mr.  Daw,  a  member  of  the  firm 
of  auctioneers,  entering  the  room  a  short  conversation  took  place 
with  reference  to  "  The  Biddings  "  between  him  and  the  defendant, 
who  was  known  to  him  personally,  and  just  before  he  entered  the 
rostrum  he  asked  the  defendant  to  "  give  him  a  bid."  The  sale  was 
then  begun  of  five  different  properties,  among  which  "  The  Bid- 
dings "  came  third.  The  reserve  price  was  £1,600.  The  defendant 
bid  £1,550,  and,  after  communications  had  passed  between  Mr.  Daw 
and  the  vendors,  the  property  was  knocked  down  to  the  defendant  at 
that  price.  The  sale  of  the  two  remaining  properties  was  then  pro- 
ceeded with,  and  at  the  close  the  defendant  left  the  room.  Upon  the 
auctioneer's  clerk  calling  Mr.  Daw's  attention  to  the  circumstance 
that  the  defendant  had  not  signed  the  memorandum  of  agreement, 
a  messenger  was  sent  after  him,  and  he  returned.  He  was  then 
asked  to  sign  the  memorandum,  but  refused,  on  the  ground  that  he 
had  made  the  bid  for  Mr.  Daw  in  compliance  with  his  request,  and 
not  for  himself.  The  auctioneer's  clerk  had  in  the  meantime  filled 
up  the  memorandum  of  agreement  on  a  copy  of  the  printed  particu- 
lars and  conditions  of  sale  in  the  appropriate  manner.    This  memo- 

»  Mathbw,  J.,  delivered  a  concurring  opinion. 
24 


370  BELL  V.   BALLS.  [CHAP.   IX^ 

randum  was  not  signed  either  by  the  defendant,  the  auctioneer,  or. 
his  clerk.  A  week  later,  however,  on  December  2,  1895,  Mr.  Daw,  at 
the  instance  of  the  vendors,  filled  up  and  signed,  in  the  name  of  his 
firm,  and  as  agent  for  the  defendant,  another  copy  of  the  memo- 
randum, striking  out,  however,  all  reference  to  the  deposit  which  the 
defendant  had  not  paid.  The  defendant  persisted  in  his  refusal  to 
complete  the  purchase,  and  the  action  was  brought  to  compel  him  ta 
do  so,  the  plaintiffs  relying  upon  both  the  above  mentioned  docu- 
ments as  memoranda  of  the  contract  sufficient  to  satisfy  the  require- 
ments of  the  Statute  of  Frauds. 

Stirling,  J.  (after  stating  the  facts) :  The  first  question  is 
whether  the  defendant  really  bid  for  the  property,  as  he  alleges,  in 
the  belief  that  he  was  bidding  for  Mr.  Daw,  or  in  other  words  act- 
ing as  puffer  at  the  sale.  The  story  is  a  strange  one;  but  I  am 
bound  to  say  that,  having  seen  the  defendant  in  the  box  and  heard 
his  evidence  and  that  of  his  friend,  Mr.  Wyatt,  and  seen  the  memo- 
randa which  he  produced,  I  believe  that  he  did  act  under  the  belief 
which  he  professes.  On  the  other  hand,  I  think  that  the  defendant 
had  no  reasonable  ground  for  so  acting;  and  that  what  passed  be- 
tween him  and  Mr.  Daw,  as  told  by  himself,  ought  not  to  have  mis- 
led him  into  the  belief  which  he  entertained.  Under  these  circum- 
stances, what  is  the  legal  result?  It  seems  to  me  that,  assuming  a 
memorandum  to  exist  which  satisfies  the  requirements  of  the  Statute 
of  Frauds,  there  is  a  contract  between  the  plaintiffs  and  defendant 
which  is  enforceable  at  law,  and  that  the  mistake  at  most  constitutes 
a  defence  only  so  far  as  the  action  seeks  specific  performance;  and, 
as  was  laid  down  by  the  Court  of  Appeal  in  Tamplin  v.  James,  15 
Ch.  D.  215,  the  Court  is  now  bound  in  such  a  case  to  consider  the 
question  of  damages.  The  validity  of  the  second  defence  must  there- 
fore be  considered. 

First,  with  reference  to  the  memorandum  filled  up  by  the  auc- 
tioneer's clerk.  It  has  been  decided  that  upon  a  sale  by  auction 
the  auctioneer  is  the  agent  of  the  purchaser  as  well  as  of  the  seller, 
and  has  authority  to  sign  a  memorandum  of  the  sale  so  as  to 
bind  both  parties;  and  if  the  memorandum  on  a  copy  of  the  par- 
ticulars has  been  filled  up  by  the  auctioneer  with  his  own  hand 
in  the  same  way  as  the  memorandum  now  in  question  was  filled  up 
by  the  clerk,  it  would  have  been  sufficient.  An  agent,  however,  can- 
not as  a  rule  delegate  his  authority.  The  law  as  to  that  in  the  case 
of  an  auctioneer  and  his  clerk  is  laid  down  in  Pierce  v.  Corf,  L.  K. 
9  Q.  B.  214,  where  Blackburn,  J.,  said:  "I  take  it  as  quite  clear 
that  the  auctioneer's  clerk  has  no  authority  to  sign  by  the  general  cus- 
tom; although,  as  Bird  v.  Boulter,  4  B.  &  Ad.  443,  decided,  there 
may  be  special  circumstances  to  show  that  an  auctioneer's  clerk  had 
authority  to  sign ;  where  the  bidder,  that  is,  the  person  to  be  charged, 
by  word  or  sign  authorizes  the  auctioneer's  clerk  to  sign  on  his  be- 


CHAP.   IX.]  SPECIAL   FORMS  OF  AGENCY.  371 

half,  he  makes  him  his  agent  to  sign,  although  by  the  general  custom 
the  auctioneer's  clerk  would  not  be  the  bidder's  agent."  In  the  pres- 
ent case  the  defendant  did  not  by  word,  sign,  or  otherwise  authorize 
the  auctioneer's  clerk  to  sign  on  his  behalf,  and  the  case  of  Bird  v. 
Boulter,  supra,  has  no  application.  It  was,  however,  urged  that  the 
exigencies  of  the  case  require  that  on  sales  by  auction  at  the  present 
day  the  auctioneer's  clerk  sitting  publicly  beside  him  should  be  held 
authorized  to  sign  memoranda  on  behalf  of  purchasers.  The  ordinary 
practice  at  the  present  time  with  reference  to  sales  of  real  estate 
was  stated  by  Mr.  Daw,  the  plaintiffs'  own  witness,  to  be  that  an 
auctioneer,  after  he  has  knocked  down  a  particular  lot,  proceeds  with 
the  sale  of  the  following  lots  and  leaves  it  to  the  clerk  to  find  out 
the  name  of  the  purchaser  and  to  prepare  a  record  of  the  contract, 
which  he  does  by  filling  up  the  memoranda  appended  to  two  copies 
of  the  particular  sale,  one  for  signature  by  the  purchaser,  the  other 
for  signature  by  the  auctioneer.  Some  convenience,  no  doubt,  attends 
such  a  practice,  and  I  do  not  desire  to  question  its  validity,  but  the 
mere  statement  of  it  appears  to  me  to  show  that  there  is  no  ground 
for  the  contention  that  the  exigencies  of  the  case  require  that  the 
auctioneer  should  be  held  entitled  to  delegate  his  authority  to  his 
clerk.  The  practice  contemplates  that  one  part  of  the  memorandum 
should  be  signed  by  the  auctioneer;  and  if  this  be  consistent  with 
the  requirements  of  business,  why  should  not  the  signature  of  the 
other  by  him  be  also  ?  I  say  this  quite  irrespective  of  what  was  urged 
in  argument  that  there  is  no  difficulty  in  the  auctioneer  writing 
down  at  the  time  the  name  of  the  purchaser  on  a  copy  of  the  par- 
ticulars and  conditions  of  sale,  which  was  held  to  be  sufficient  in 
White  V.  Proctor  (1811),  4  Taunt.  209,  and  Kemeys  v.  Proctor 
(1813),  3  V.  &  B.  57;  (1820)  1  Jac.  &  W.  350.  I  come,  therefore, 
to  the  conclusion  that  the  memorandum  filled  in  by  the  clerk  does 
not  satisfy  the  requirements  of  the  Statute  of  Frauds. 

Secondly,  as  to  the  memorandum  signed  by  the  auctioneer  on 
December  2,  1895.  It  was  contended  that  at  the  time  when  the 
auctioneer  signed  it  he  had  no  authority  so  to  do  —  first,  because  the 
authority  conferred  by  the  purchaser  on  the  auctioneer  at  the  time 
of  the  sale  had  expired  long  before  December  2,  1895,  or,  at  all 
events,  could  not  be  exercised  at  that  date;  and,  secondly,  because 
the  purchaser  had  actually  revoked  the  authority. 

The  first  decision  that,  on  a  sale  by  auction  of  an  interest  in  land 
the  auctioneer  is  authorized  by  the  purchaser  to  sign  a  memorandum 
of  the  contract,  is  Emmerson  v.  Heelis,  2  Taunt.  38,  47.  There  the 
auctioneer  signed  by  entering  the  purchaser's  name  opposite  a  par- 
ticular lot  in  a  specially  prepared  catalogue.  Mansfield,  C.  J.,  says : 
"  This  memorandum  is  more  particular  than  most  memorandums  of 
sale  are;  and  upon  it  the  auctioneer  writes  down  the  purchaser's 
name.    By  what  authority  does  he  write  down  the  purchaser's  name  ? 


373  BELL  V.   BALLS.  [CHAP.    IX. 

By  the  authority  of  the  purchaser.  These  persons  bid,  and  announce 
their  biddings,  loudly  and  particularly  enough  to  be  heard  by  the 
auctioneer.  For  what  purpose  do  they  do  this  ?  That  he  may  write 
down  their  names  opposite  to  the  lots;  therefore  he  writes  the  name 
by  the  authority  of  the  purchaser,  and  he  is  an  agent  for  the  pur- 
chaser." In  Earl  of  Glengal  v.  Barnard  (1836),  1  Keen,  769,  Lord 
Langdale,  M.  E.,  1  Keen,  788,  thus  explains  the  ground  of  his 
decision :  "  The  nature  of  the  proceeding  by  auction  —  the  bidding 
for  the  purpose  of  making  the  purchase  —  the  necessity  of  making 
a  statement  of  the  bidding  —  the  direction  to  the  auctioneer  to  write 
down  the  bidding,  which  is  perhaps  involved  in  the  very  process  of 
bidding,  and  some  other  circumstances  afford  intelligible  ground  for 
the  decision  in  Emmerson  v.  Heelis,  supra,  and  the  approbation 
which  has  since  been  bestowed  upon  it."  These  cases  appear  to  show 
that  the  authority  which  the  purchaser  confers  upon  the  auctioneer 
is  to  write  down  the  bidding  —  that  is,  to  make  a  minute  or  record 
of  it  at  the  time  and  as  part  of  the  transaction,  and  such  a  record 
is  held  a  memorandum  sufficient  to  satisfy  the  statute.  I  do  not  see 
that  the  nature  of  the  proceeding  justifies  the  implication  of  an 
authority  to  make  a  memorandum,  except  at  a  time  when  the  writ- 
ing down  can  fairly  be  held  to  be  a  part  of  the  sale.  If  the  auctioneer 
were  allowed  to  record  the  bidding  at  a  later  time  evils  might  arise 
similar  to  those  which  the  Statute  of  Frauds  was  intended  to  prevent. 
Such  authority  as  there  is  appears  to  me  to  favor  this  view.  I  am 
not  sure  how  far  the  case  of  Mews  v.  Carr,  1  H.  &  N.  484,  can  really 
be  so  regarded,  for  though  the  learned  Judges  speak  of  the  auctioneer 
ceasing  to  be  agent  for  the  purchaser  "  so  soon  as  the  sale  is  over," 
their  remarks  were  directed  to  the  case  of  a  sale  made  through  the 
auctioneer  not  at  the  auction  but  several  days  afterwards.  The  point, 
however,  was  raised  in  Buckmaster  v.  Harrop  (1807)  13  Ves.  456, 
473.  There  the  auctioneer  was  one  of  the  vendors,  and  apparently 
did  not  make  his  entry  of  the  bidding  at  the  time  of  the  sale,  and 
objection  was  taken  on  that  account.  Lord  Erskine,  L.  C,  thus 
deals  with  it :  "  The  only  evidence  that  I  can  receive  is  the  written 
memorandum  itself,  unless  it  is  lost ;  and  it  must  be  a  contemporary 
memorandum,  especially  in  this  case:  as  the  auctioneer,  being  him- 
self the  vendor,  though  only  as  a  trustee,  could  not  in  strictness  be 
the  agent  of  the  purchaser."  By  a  contemporary  memorandum  I 
understand  one  made  at  the  time  and  as  part  of  the  transaction  of 
sale.  If  in  the  present  case  the  auctioneer  had  proceeded  to  sign 
a  memorandum  immediately  on  the  conclusion  of  the  auction  I 
should  have  been  slow  to  hold  that  to  be  beyond  his  power;  but  I 
think  that  the  memorandum  of  "December  2,  1895,  was  signed  at  a 
time  when  the  auctioneer's  authority  had  ceased.  It  becomes  unnec- 
essary, therefore,  to  consider  the  question  whether  the  purchaser  could 
revoke  the  authority  conferred  by  him  on  the  auctioneer.    I  content 


CHAP.   IX.]  SPECIAL   FORMS  OF  AGENCY.  373 

myself  with  saying  that  I  share  with  Lord  Romilly  his  reluctance 
to  hold  that  upon  a  sale  by  auction  under  ordinary  circumstances  the 
vendor  or  the  purchaser  can  say  after  a  lot  has  been  knocked  down, 
"  I  am  not  satisfied  with  the  price  and  withdraw  the  authority  given 
to  the  auctioneer":   see  Day  v.  Wells,  30  Beav.  220.^ 

The  result,  therefore,  is  that  the  action  fails,  and  must  be  dismissed 
with  costs. 


WHITE   V.   DAHLQUIST   MFG.    CO.   et   al. 

179  Mass.  427.     1901. 

Bill  in  equity  to  compel  the  conveyance  of  a  parcel  of  real  estate 
sold  to  plaintiff  at  auction.  From  a  decree  for  plaintiff,  defendants 
appeal.  Defendants  contend  that  the  memorandum  of  sale  was  in- 
sufficient to  bind  them. 

Hammond,  J.  ...  It  is  still  further  objected  that,  as  to  the  Third 
street  estate,  the  memorandum  was  not  signed  until  the  next  day, 
and  that  the  auctioneer  had  no  authority  at  that  time  to  bind  the 
defendants.  The  general  rule  is  that  the  memorandum  may  be  signed 
at  any  time  subsequent  to  the  formation  of  the  contract,  at«  least  be- 
fore action  brought.  Browne,  St.  Frauds,  §  352a,  and  cases  cited; 
Lerned  v.  Wannemacher,  9  Allen,  412,  416 ;  Sanborn  v.  Chamberlin, 
101  Mass.  409,  416.  And  this  rule  is  applicable  where  the  contract 
is  made  by  an  agent,  and  the  subsequent  memorandum  is  signed  by 
him  during  the  existence  of  his  agency.  It  has  been  sometimes 
thought  that  there  is  an  exception  to  this  rule  in  the  case  of  auction- 
eers (see  the  authorities  referred  to  in  Browne,  St.  Frauds,  §  353) ; 
but  the  exception  is  more  apparent  than  real.  The  question  does  not 
turn  upon  the  fact  that  the  agent  is  an  auctioneer,  but  upon  the  scope 
and  duration  of  the  agency.  While  it  is  said  that  an  auctioneer  is 
the  agent  of  both  seller  and  purchaser  for  signing  the  contract,  it 
does  not  follow  that  his  agency  for  the  one  is  co-extensive  in  its 
nature  and  duration  with  that  for  the  other.  The  word  "  auctioneer  " 
is  sometimes  used  to  designate  the  crier  who  simply  calls  for  bids 
and  strikes  the  bargain  at  an  auction  sale.  His  connection  with  the 
sale  may  begin  with  calling  for  bids,  and  end  with  striking  the  bar- 
gain. If  that  be  the  only  authority  given  him  by  seller  and  pur- 
chaser, it  may  be  said  that,  while  the  power  to  strike  the  bargain 
fairly  imports  authority  to  make  his  work  effectual  by  signing  the 
memorandum  necessary  to  bind  the  parties,  it  also  implies  that  that 
act  shall  be  substantially  contemporaneous  with  the  sale,  and  as  a 
part  of  it.  In  such  a  case  the  agency  of  the  auctioneer  is  substan- 
tially ended  with  the  auction,  and  his  authority  to  bind  either  party 

»  See  Van  Praagh  v.  Everidge,  [1902]  2  Ch.  266;   reversed  hi  [1903]  1  Ch.  434. 


374  WHITE  V.   DAHLQUI8T   MFG.    CO.   ET   AL.  [CHAP.    IX. 

by  a  memorandum  would  not  extend  beyond  that  time.  And,  so  far 
as  respects  the  purchaser,  the  authority  of  the  auctioneer,  as  a  usual 
rule,  is  confined  to  the  actual  time  of  the  auction.  It  is  conferred 
by  the  bid  when  accepted,  and  therefore  begins  with  the  fall  of  the 
hammer.  The  technical  ground  is  that  the  purchaser,  by  the  very 
act  of  bidding,  "  calls  upon  the  auctioneer  or  his  clerk  to  put  down 
his  name  as  a  bidder,  and  thus  confers  an  authority  on  the  auctioneer 
or  his  clerk  to  sign  his  name,  and  this  is  the  whole  extent  of  his 
authority."  Shaw,  C.  J.,  in  Gill  v.  Bicknell,  2  Cush.  355,  358.  Such 
an  authority  must  be  exercised  contemporaneously  with  the  sale.  See 
Browne,  St.  Frauds,  §  353,  and  cases  cited  in  the  notes. 

But,  primarily  and  actively,  the  auctioneer,  as  a  rule,  is  the  agent 
of  the  seller,  and  as  to  him  his  authority  is  generally  more  extensive, 
and  may  cover  a  time  both  before  and  after  the  sale.  Frequently 
the  property  is  put  into  his  hands  for  sale,  and  all  the  details  are 
left  entirely  to  him.  He  is  expected  to  make  all  the  arrangements 
by  way  of  public  advertisement  and  otherwise,  and  to  act  fully  at  the 
sale,  to  receive  the  deposit  from  the  purchaser,  and  to  carry  the 
transaction  to  the  end.  Such  authority  from  a  seller  to  an  auctioneer 
does  not  end  with  the  auction  sale,  but  extends  beyond  it,  and  until 
it  is  revoked  the  auctioneer  may  properly  bind  the  seller  by  a  memo- 
randum signed  within  a  reasonable  time.  He  does  this,  not  simply 
because  he  is  the  crier  at  the  sale,  but  because  his  agency,  by  the  fair 
understanding  between  him  and  the  seller,  extends  to  the  final  con- 
summation of  the  contract,  and  is  not  affected  by  the  fact  that  he 
also  acts  as  crier. 

In  the  present  case  Hogan,  the  auctioneer,  testified  that  he  was  in 
the  real-estate  and  insurance  business,  and  had  been  for  several  years ; 
that  a  week  or  ten  days  before  the  sale  Dahlquist  "  placed  the  prop- 
erty with  me  for  sale."  Hogan  advertised  it  by  means  of  handbills 
and  newspapers,  and  seems  to  have  been  given  full  authority  to  sell 
the  property,  subject  to  instructions  as  to  price.  He  received  and 
kept  after  the  auction  the  deposits  made  by  the  purchasers,  and  the 
evidence  would  fully  warrant  a  finding  that  the  understanding  was 
that  his  agency  for  the  defendants  should  continue  until  the  sale 
was  completed,  and  that  it  had  not  been  revoked  at  the  time  Hogan 
signed  the  memorandum.  Upon  such  a  finding  the  general  rule 
applies,  and,  since  Hogan  was  acting  during  the  continuance  of 
his  agency,  he  could  properly  bind  his  principals  by  signing  the 
memorandum.  Decree  affirmed. 


CHAP.   IX.]  SPECIAL   FORMS   OF   AGENCY.  375 

PINCKNEY   V.    HAGADORN. 

1  Duer  (Superior  Ct.  of  the  City  of  N.  Y.)  89.     1852. 

Action  to  enforce  specific  performance  of  an  agreement  to  sell 
real  estate.  The  land  was  sold  at  public  auction  to  the  plaintiff. 
The  terms  of  sale  called  for  ten  per  cent,  of  the  purchase  money  to 
be  paid  on  the  day  of  sale,  but  the  plaintiff  did  not  pay  it  to  the 
auctioneer  until  three  days  after  the  sale.  The  evidence  was  con- 
flicting as  to  whether  the  auctioneer  had  been  forbidden  by  the  de- 
fendant to  receive  the  ten  per  cent,  prior  to  its  actual  payment  by  the 
plaintiff.  The  referee,  to  whom  the  case  was  referred,  reported  in 
favor  of  the  plaintiff,  and  defendant  now  moves  to  set  aside  the 
report. 

By  the  court.  Sandford,  J.  .  .  .  The  defendant's  next  point  is, 
that  the  auctioneer  was  an  agent,  with  limited  power,  and  had  no 
authority  to  extend  the  time  for  the  payment  of  the  ten  per  cent.,  nor 
to  receive  it,  or  give  a  receipt  for  it  three  days  after  the  sale. 

The  power  of  an  auctioneer  is,  no  doubt,  special  and  limited.  His 
authority  to  receive  the  stipulated  deposit,  which  in  this  case  was 
ten  per  cent.,  is  not,  nor  could  it  be  questioned.  He  receives  the  de- 
posit not  merely  as  the  agent  of  the  seller:  he  is  bound  to  keep  it 
for  the  indemnity  of  the  purchaser,  until  the  latter  is  enabled  to 
look  into  the  title  proposed  to  be  conveyed  to  him,  and  decide  on  its 
sufficiency,  or  until  the  lapse  of  the  time  limited  for  the  purpose  in 
fixing  the  day  for  the  payment  and  security  of  the  residue  of  the 
price. 

The  terms  of  sale  in  this  case,  as  is  customary,  provided  that  the 
purchaser  should  pay  ten  per  cent,  on  the  day  of  sale.  Was  the 
auctioneer's  authority  limited  to  receiving  it  on  that  very  day?  His 
entry  in  his  sales  book  had  made  a  complete  contract,  by  which  the 
purchaser  was  bound,  at  all  events,  to  take  the  lot  at  the  price  there 
set  down.  The  seller  had  a  right,  undoubtedly,  to  make  time  of  the 
essence  of  the  contract,  if  he  chose  to  do  so.  As  a  general  rule,  time 
is  not  so  essential  in  executory  contracts  for  the  sale  of  land  as  to 
work  a  forfeiture  on  the  omission  to  pay  at  the  day  stipulated,  Edger- 
ton  V.  Peckham,  11  Paige,  352,  363,  and  until  the  seller  does  some 
positive  act  to  make  it  essential,  the  buyer  is  at  liberty  to  pay  after 
the  day.  We  find  no  warrant  for  the  doctrine  that  the  auctioneer's 
authority  to  receive  the  deposit  on  a  sale  made  by  him,  on  the  terms 
here  expressed,  "  ten  per  cent,  on  the  day  of  sale,"  is  limited  to  re- 
ceiving it  on  that  day  and  on  that  day  alone.  Until  notified  to  the 
contrary  by  the  seller,  and  his^  authority  to  receive  it  thereby  revoked, 
we  see  no  good  reason  why  it  does  not  continue  after  the  day  of  sale. 
We  do  not  perceive  that  it  differs  in  this  respect  from  the  authority 


376  PINCKNEY   V.   IIAGADORN.  [CHAP.   IX. 

of  other  agents  empowered  to  receive  monSy  on  the  sales  of  land  or 
other  executory  contracts.  It  is  a  very  common  occurrence  that 
executory  contracts  are  made  for  the  sale  of  lands,  and  left  in  the 
hands  of  agents  to  receive  payment.  They  provide  for  payment  on 
fixed  days,  and  almost  universally  they  make  the  execution  of  a  con- 
veyance dependent  upon  the  payment  of  the  price  at  the  times  and 
in  the  manner  stipulated.  We  venture  to  say  it  was  never  heard  of 
that  the  principal  in  such  contracts  could  refuse  to  convey  because 
the  agent  had  received  a  payment  after  the  day  stipulated,  there 
having  been  no  notice  to  him  not  to  receive  it,  or  other  revocation  of 
his  authority. 

The  power  of  an  auctioneer,  in  receiving  the  ten  per  cent.,  does  not 
fall  short  of  that  of  such  agents  for  the  collection  of  contracts  made 
on  private  sales,  and  we  think  we  are  holding  the  rule  quite  strict 
enough  in  favor  of  sellers  at  auction,  when  we  decide  that,  until 
notified  by  the  seller  after  the  day  of  sale  that  he  repudiates  the  con- 
tract and  revokes  the  auctioneer's  authority  to  receive  the  deposit, 
that  authority  continues  in  full  force. 

The  stipulation  for  the  payment  of  a  percentage,  by  way  of  deposit* 
on  the  day  of  sale,  is  for  the  benefi^t  of  both  the  buyer  and  seller. 
The  buyer,  by  complying  with  those  terms  literally,  will  put  it  out 
of  the  seller's  power  to  rev9ke  the  sale  on  the  ensuing  day  by  recall- 
ing the  auctioneer's  authority  to  receive  the  deposit.  If  the  buyer 
postpones  the  payment  of  the  deposit  till  the  next  or  a  subsequent  day, 
he  does  it  at  the  peril  of  that  contingency.  The  seller  may  in  the 
meantime  forbid  the  auctioneer  to  receive  the  deposit,  and  on  a 
tender  of  it  to  himself  personally,  he  may  refuse  it,  on  the  ground 
that  he  was  entitled  to  have  it  received  by  the  auctioneer  on  the  day 
of  sale.  But  we  cannot  hold  that  the  auctioneer's  authority  to  re- 
ceive it  terminates  absolutely  on  the  day  of  sale,  nor  that  it  differs  in 
this  respect  from  the  power  of  other  agents  authorized  to  receive 
money  payable  at  a  fixed  day. 

The  convenience  of  business,  a  circumstance  which  courts  should 
always  regard  where  no  principle  of  law  interferes,  seems  to  require 
an  authority  in  the  auctioneer  even  more  extended  than  that  we  have 
expressed.  The  quantity  of  real  estate  sold  at  public  auction  in  this 
city  is  immense.  A  great  many  parcels  are  sold  by  one  auctioneer  in 
a  single  day;  and  when,  as  the  fact  sometimes  occurs,  he  sells  a 
hundred  or  more  distinct  parcels  at  a  single  sale,  it  is  manifestly 
impracticable  that  all  or  even  a  major  part  of  the  purchasers  can  pay 
their  deposit  to  him  on  the  day  of  sale.  The  convenience  of  all  con- 
cerned in  this  great  and  increasing  department  of  business  would 
be  subserved  by  holding  that  each  purchaser  may  pay  his  deposit  in 
twenty-four  hours  after  the  sale.  When  judicial  sales  are  made,  there 
is  a  propriety  in  requiring  an  immediate  deposit,  so  as  to  preclude 
sham  bids  made  for  the  sake  of  delay. 


CHAP.   IX.]  SPECIAL  FORMS  OF  AGENCY.  377 

Whether  the  principles  of  law  will  authorize  the  latitude  we  have 
suggested,  we  need  not  now  decide.  We  are  very  clear,  however,  that 
they  do  warrant  us  in  deciding,  that  until  prohibited  by  the  seller, 
the  auctioneer's  authority  to  receive  the  deposit  continues  after  the 
day  of  sale.  Its  limit  would  probably  be  the  time  fixed  for  the  com- 
pletion of  the  purchase,  for  if  the  buyer  neglect  to  pay  the  deposit 
after  that  period,  the  purchase  may  be  deemed  abandoned,  and  the 
auctioneer's  authority  to  act  for  the  seller  thereby  terminated.  There 
was  no  such  lapse  of  time  in  this  case  as  would  impair  his  authority 
to  receive  the  deposit. 

The  only  remaining  question  is  then  presented:  Did  the  defend- 
ant revoke  the  auctioneer's  authority  before  he  received  the  deposit? 
This  was  a  point  to  be  determined  on  the  evidence.  .  .  .  Forming 
our  opinion  on  the  printed  testimony  alone,  we  should  probably  have 
decided  that  the  notice  was  given  the  day  after  the  sale,  but  the  pre- 
ponderance in  that  direction  is  not  so  great  as  to  justify  us  in  over- 
ruling the  report  of  the  referee  made  with  the  advantage  of  the  per- 
sonal examination  of  the  witnesses;  and  as  he  has  decided  that  the 
notice  was  not  given  till  after  the  payment  of  the  deposit,  the  motion 
to  set  aside  his  report  must  be  denied,  and  the  judgment  must  be 
affirmed. 


WOOLFE  V.   HORNE. 

2  Q.  B.  D.  355.     1877. 
[Reported  herein  at  p.  565.] 


d.  Attorneys-at-law. 
MOULTON   V.   BOWKER. 

115  Mass.  36.     1874. 

Writ  of  entry  to  recover  the  undivided  half  of  certain  premises. 
Verdict  directed  for  tenant. 

Demandants  claimed  under  a  sheriff's  deed  executed  upon  a  sale 
of  the  premises  after  attachment  on  mesne  process  followed  by  judg- 
ment on  execution.  The  tenant  claimed  under  deed  from  the  owner 
against  whom  the  attachment  was  issued,  and  offered  in  evidence  a 
certified  copy  of  a  discharge  of  the  attachment  signed  by  one  Searle, 
who  was  demandants'  attorney  of  record  in  the  attachment  proceed- 
ings. Demandants  objected  to  the  admission  of  the  paper,  and 
offered  to  prove  that  Searle  acted  without  authority  and  in  fraud  of 


378  OHLQUEST   V.   FARWELL  &   CO.   ET   AL.  [CHAP.   IX. 

their  rights.  The  court  ruled  that  the  discharge  by  Searle  enabled 
the  owner  to  give  a  valid  title  to  the  tenant  who,  it  was  admitted, 
was  cognizant  of  no  fraud. 

Gray,  C.  J.  An  attorney-at-law  has  authority,  by  virtue  of  his 
employment  as  such,  to  do  in  behalf  of  his  client  all  acts,  in  or  out 
of  court,  necessary  or  incidental  to  the  prosecution  and  management 
of  the  suit,  and  which  affect  the  remedy  only,  and  not  the  cause  of 
action;  and  we  can  have  no  doubt  that  this  includes  the  power  to 
release  an  attachment,  at  least  before  judgment,  which  is  all  that 
this  case  requires  us  to  consider.  Lewis  v.  Sumner,  13  Met.  269; 
Shores  v.  Caswell,  id.  413 ;  Wieland  v.  White,  109  Mass.  392 ;  Jenney 
V.  Delesdernier,  20  Me.  183;  Kice  v.  Wilkins,  21  Me.  558;  Pierce  v. 
Strickland,  2  Story,  292 ;  Levi  v.  Abbott,  4  Exch.  588. 

The  act  of  the  demandants'  attorney  was  therefore  within  his  pro- 
fessional authority,  and  bound  his  clients;  and  if  it  was  fraudulent, 
their  remedy  must  be  sought  against  hijn,  it  being  agreed  that  the 
other  party  was  not  cognizant  of  any  fraud. 

Judgment  on  the  verdict  for  the  tenant. 


OHLQUEST   V.   FAEWELL   &   CO.   et   al. 

71  Iowa,  231.     1887. 

Defendant  Becker  was  a  party  to  two  suits  involving  substan- 
tially the  same  question.  The  attorneys  for  plaintiffs  and  defendants 
in  these  suits  entered  into  a  stipulation  that  only  one  of  the  cases 
should  be  tried,  and  that  the  judgment  resulting  from  such  trial 
should  determine  the  kind  of  judgment  to  be  entered  in  the  other 
case.  The  case  tried  resulted  in  a  judgment  for  plaintiffs,  and  there- 
upon judgment  was  also  entered  for  plaintiffs  in  the  other  case,  in 
accordance  with  the  stipulation.  The  defendant  Becker  filed  his 
motion  to  set  aside  this  judgment,  on  the  ground  that  the  stipula- 
tion therefor  by  the  attorneys  representing  him  was  made  without 
his  authority  or  consent.  The  motion  was  overruled,  and  Becker 
appeals. 

Beck,  J.  ...  It  is  undoubtedly  true  that  an  attorney  cannot 
consent  to  a  judgment  against  his  client,  or  waive  any  cause  of  action 
or  defence  in  the  case;  neither  can  he  settle  or  compromise  it  with- 
out special  authority.  But  he  is,  by  his  general  employment,  author- 
ized to  do  all  the  acts  necessary  or  incidental  to  the  prosecution  or 
defence  which  pertain  to  the  remedy  pursued.  The  choice  of  pro- 
ceedings, the  manner  of  trial,  and  the  like,  are  all  within  the  sphere 
of  his  general  authority,  and,  as  to  these  matters,  his  client  is  bound 
by  his  action.    These  rules  are  conceded  by  counsel  in  this  case.    It 


CHAP.   IX.]  SPECIAL   FORMS   OF   AGENCY.  379 

cannot  be  doubted  that  under  them  counsel  for  parties  in  several 
suits,  involving  the  same  issues,  may,  in  the  exercise  of  their  general 
authority,  consent  to  the  consolidation  of  all  for  trial,  or  stipulate 
that  the  trial  of  one  shall  determine  the  others.  This  pertains  to  the 
remedy  pursued,  —  to  the  manner  of  trial,  —  and  is  not  an  agree- 
ment for  judgment  or  a  compromise.  The  parties  are  not  deprived 
of  a  trial,  nor  is  judgment  rendered  by  consent.  The  counsel  simply 
assent  to  a  trial  in  a  particular  manner;  that  one  trial  shall  settle 
the  same  issue  in  several  cases.  This  is  just  what  was  done  by 
counsel  for  Becker  in  this  case.  The  form  of  the  agreement  is  that 
judgment  in  his  case  should  follow  a  trial  in  another  action.  This 
is  not  an  agreement  for  a  judgment,  but  in  effect  an  agreement  for 
a  manner  of  trial.  'No  question  is  presented  in  the  case  involving 
the  skill,  diligence,  or  good  faith  of  Becker's  attorneys  in  assenting 
to  one  trial  in  the  several  cases.  The  authority  to  do  so  is  alone 
brought  in  question. 

We  need  pursue  the  case  no  further.  The  familiar  and  undisputed 
principles  we  have  stated,  applied  to  the  admitted  facts  in  the  case, 
demand  that  the  judgment  of  the  district  court  be  Affirmed.^ 


LEVY,    SIMOX   &    CO.    V.   BEOWK 

56  Miss.  83.     1878. 

Chalmers,  J.,  delivered  the  opinion  of  the  court. 
This  is  a  suit  on  an  injunction-bond,  which  originated  under  the 
following  circumstances:    Levy,   Simon  &   Co.    (afterwards   Levy, 

*  In  Neale  v.  Gordon-Lennox,  the  plaintiff  In  an  action  for  defamation  of  char- 
acter authorized  her  counsel  to  consent  to  a  reference  on  condition  that  all  Imputa- 
tions on  her  character  were  publicly  disclaimed  in  court.  Her  counsel,  who  did  not 
make  this  limitation  of  his  authority  known  to  the  defendant's  counsel,  agreed  with 
the  latter  to  refer  the  action  without  any  disclaimer  of  imputations,  and  when  the 
case  was  called  on  for  trial  an  order  for  a  reference  was  accordingly  made.  Upon 
an  application  to  Lord  Alverstone,  C.  J.,  to  rescind  the  order,  the  order  was  set 
aside  and  the  case  restored  to  the  jury  list.  Upon  appeal,  the  Court  of  Appeal  held 
that  "  the  general  authority  of  counsel  .  .  .  includes  the  power  to  refer  the  action," 
and  accordingly  reversed  the  decision  of  the  Lord  Chief  Justice  on  the  ground  that 
the  limitation  of  counsel's  ostensible  authority  having  been  unknown  to  the  other 
side,  the  mere  fact  that  the  plaintiff's  counsel  had.  In  agreeing  to  the  reference,  ex- 
ceeded the  authority  actually  given  to  him  did  not,  In  the  absence  of  mistake  or 
anything  analogous  thereto,  afford  any  ground  for  setting  aside  the  order  of  refer- 
ence. [1902]  1  K.  B.  838.  The  House  of  Lords  reversed  this  decision  of  the  Court 
of  Appeal  and  restored  the  case  to  the  jury  list  for  trial.  Lord  Lindley,  delivering 
one  of  the  opinions  for  the  House  of  Lords,  said  :  "  It  appears  to  me  that  the  Court 
of  Appeal  inadvertently,  or  for  some  reason  which  I  do  not  understand,  omitted  to 
take  into  account  the  duty  and  function  of  a  court  In  a  matter  of  this  kind.  The 
judgment  of  the  Court  of  Appeal  proceeds  upon  the  ordinary  doctrines  of  agency ; 
but  the  ordinary  doctrines  of  agency  are  only  half  of  what  is  to  be  considered  In  a 
matter  of  this  kind.  ...  It  would  be  absolutely  wrong,  to  my  mind,  for  the  court 
to  allow  that  order  to  be  acted  on  and  to  take  effect  the  moment  It  is  Judicially 
ascertained  and  brought  to  Its  attention  that  it  Is  an  order  which  the  court  never 
would  have  dreamt  of  making  If  the  court  had  known  the  facts.  That  view  of  the 
case  seems  to  me  to  have  been  overlooked  by  the  Court  of  Appeal,  and  to  be  fatal 
to  the  validity  of  the  order."    [1902]  A.  C.  (H.  L.)  465. 


380  LEVY,   SIMON   &    CO.    V.   BEO'VTN".  [CHAP.   IX. 

Scheur  &  Co.),  of  New  Orleans,  placed  in  the  hands  of  H.  H.  Miller, 
a  lawyer  of  Vicksburg,  a  claim  for  collection  against  the  estate  of 
Isaac  Lowenhaupt,  deceased.  Suit  was  promptly  brought,  and  re- 
sulted in  the  recovery  of  a  judgment  against  Catherine  Lowenhaupt, 
executrix  of  said  estate,  for  $3,020.87.  An  execution  on  this  judg- 
ment having  been  returned  nulla  bona.  Miller  caused  writs  of  gar- 
nishment to  be  issued,  which  were  served  on  Bodenheim  &  Co.  and 
Louis  Hoffman.  Judgment  by  default  was  obtained  against  Hoff- 
man, which  was  subsequently  reversed,  on  appeal,  in  this  court,  and 
the  writ  quashed  for  some  informality.  Bodenheim  &  Co.  answered 
the  writ  served  on  them,  admitting  an  indebtedness  to  the  estate  of 
Lowenhaupt  greater  than  the  judgment  against  the  principal  debtor, 
and,  therefore,  judgment  was  entered  against  them  as  garnishees. 
Some  months  afterwards  Bodenheim  &  Co.  filed  their  bill  in  the 
Chancery  Court  of  Warren  County,  enjoining  an  execution  which 
had  been  issued  on  this  judgment,  and  setting  forth  that  they  had 
discovered,  since  the  rendition  of  said  judgment,  that  they  had  been 
mistaken  in  answering  that  they  were  indebted  to  the  estate  of 
Lowenhaupt,  and  had  now  ascertained  that  their  note,  which  they 
supposed  was  payable  to  Catherine  Lowenhaupt  as  executrix,  was 
really  payable  to  said  Catherine  individually,  and  that  she  claimed 
that  the  same  was  her  separate  property.  They  prayed  that  Levy, 
Simon  &  Co.  and  the  said  Catherine  might  be  compelled  to  inter- 
plead and  settle  the  true  ownership  of  said  note,  and  that,  pending 
said  litigation,  the  execution  of  the  judgment  against  themselves 
might  be  enjoined.  The  injunction-bond  now  in  suit  was  tendered 
with  the  bill,  and  the  writ  granted  and  served  on  Miller  as  the 
attorney  of  Levy,  Simon  &  Co. 

]\Iiller  notified  his  clients  of  the  pendency  of  this  new  proceeding, 
and  of  his  attention  to  it.  By  their  silence  and  acquiescence  they 
recognized  his  authority  to  represent  them,  so  that  there  is  no  ground 
for  doubting  that,  as  to  the  new  litigation,  his  employment  was  as 
complete  as  in  the  original  suit.  Before  the  filing  of  any  answer  or 
other  pleading  by  him,  however,  a  written  agreement  of  compromise 
and  settlement  of  the  injunction  suit  was  entered  into  between  all 
the  parties  thereto,  to  wit,  Miller  as  the  representative  of  Levy, 
Simon  &  Co.,  Mrs.  Catherine  Lowenhaupt,  Bodenheim  &  Co.,  and 
Isaac  Brown  and  Joseph  Bazinsky,  the  two  latter  being  the  sureties 
on  the  injunction-bond,  and  the  defendants  in  the  present  litigation. 
By  this  arrangement,  the  injunction  proceedings  were  to  be  dis- 
missed, and  all  liability  on  the  bond  to  be  released  and  discharged, 
in  consideration  of  which  Brown,  one  of  the  sureties,  was  to  pay 
to  Miller,  within  ninety  days,  $713,  to  be  credited  on  the  judgments 
held  by  his  clients;  and  it  was  further  agreed  that  Brown  should 
realize  as  rapidly  as  possible,  upon  certain  collaterals  which  had  been 
placed  in  his  hands  by  Bodenheim  &  Co.,  and  should  apply  the  pro- 


CHAP.   IX.]  SPECIAL   FORMS  OP  AGENCl.  381 

ceeds  to  the  extinguishment,  in  full,  of  said  judgments,  and  then  pay 
over  the  excess,  if  any,  to  Mrs.  Lowenhaupt.  This  agreement  was 
carried  out.  The  bill  for  injunction  was  dismissed ;  a  written  release 
was  given  by  Miller  to  the  sureties  on  the  bond;  the  money  agreed 
to  be  paid  was  by  the  sureties  paid  to  Miller. 

Miller  died  without  having  communicated  to  his  clients  any  in- 
formation of  these  transactions.  Several  months  after  his  death 
Levy,  Simon  &  Co.  brought  this  suit  against  Brown  and  Bazinsky, 
the  sureties  on  the  injunction-bond,  seeking  to  recover  from  them  the 
penalty  thereof,  which  had  become  apparently  due  by  the  dismissal 
of  the  bill.  Plaintiff  had  no  knowledge  of  the  facts  above  detailed 
until  they  were  disclosed  by  the  pleas  here  interposed.  Do  these  facta 
constitute  a  defence  to  this  action  ? 

This  depends  upon  whether  Miller,  the  attorney  of  plaintiffs,  by 
reason  of  his  general  authority  as  such,  had  the  power  to  make  the 
compromise  and  release  the  sureties  on  the  injunction-bond  without 
the  knowledge  or  assent  of  his  clients.  This  case,  therefore,  in- 
volves a  consideration  of  the  powers  of  attorneys  in  dealing  with 
claims  in  their  hands  for  collection  or  suit. 

In  England  it  is  broadly  laid  down  that  the  attorney  is  the  gen- 
eral agent  of  his  clients  in  all  matters  that  may  be  deemed  likely 
to  arise  in  the  progress  of  the  cause  or  the  collection  of  the  claim, 
and  hence  it  is  held  that  he  may  compromise  by  accepting  less  than 
the  full  sum  due;  or,  where  the  demand  is  for  the  price  of  goods 
sold,  by  receiving  back  the  goods  in  satisfaction.  If  he  acts  without 
the  instructions  of  his  client,  he  will  not  be  liable  to  him  if  his  acts 
have  been  bona  fide,  and  marked  with  reasonable  care  and  skill.  If 
he  acts  in  violation  of  express  instructions,  he  will  be  liable  to  his 
client;  but  the  latter  will  be  bound  by  his  action,  so  far  as  the 
opposite  party  is  concerned,  unless  that  party  was  cognizant  of  the 
violated  instructions.  Cheron  v.  Parrot,  14  C.  B.  (n.  s.)  74;  Fray 
V.  Voules,  1  El.  &  El.  839;  Prestwick  v.  Poley,  18  C.  B.  (n.  s.)  806; 
Strauss  v.  Francis,  L.  E.  1  Q.  B.  379. 

In  the  elaborate  note  to  Story  on  Agency,  sec  24,  and  also  in  Whar- 
ton on  Agency,  sec.  592,  it  is  said  that  the  American  rule  is  the  same 
as  the  English.  If  these  learned  authors  mean  to  say  that  a  majority 
of  the  American  courts  recognize  an  inherent  right  in  the  attorney 
to  compromise  the  original  demand  placed  in  his  hand,  so  as  to  re- 
ceive in  full  satisfaction  less  than  the  amount  due,  or  to  substitute 
claims  upon  other  parties,  or  to  take  property  in  satisfaction  of  a 
money  demand,  or  to  release  any  security  existing  when  he  received 
the  claim,  we  cannot  agree  with  them.  That  there  are  cases  going 
to  this  extent  is  true,  but  we  think  that  the  decided  weight  of 
authority  in  this  country  is  the  other  way.  Unquestionably,  such  a 
rule  has  been  repeatedly  repudiated  by  this  court.  Holker  v.  Parker, 
7  Cranch,  436;  Abbe  v.  Rood,  6  McLean,  106;  Derwort  v.  Loomer, 


382  LEVY,   SJMON   &   CO.    V.   BEOWN.  [CHAP.   IX. 

21  Cow.  245;  Nolan  v.  Jackson,  16  111.  272;  Doub  v.  Barnes,  1  Md, 
Ch.  127;  Langdon  v.  Potter,  13  Mass.  320;  Davidson  v.  Eozier, 
28  Mo.  287;  Filby  v.  Miller,  25  Pa  St.  264;  Vail  v.  Jackson,  15  Vt, 
314;  Lockhart  v.  Wyatt,  10  Ala.  231;  Jones  v.  Ransom,  3  Ind.  327; 
Stackhouse  v.  Reese,  15  Iowa,  122;  Succession  of  Weigel,  18  La. 
An.  49;  Maddox  v.  Bevan,  39  Md.  485;  Smith's  Heirs  v.  Dixon  et 
al.,  3  Mete.  (Ky.)  438. 

It  is  quite  generally  held,  however,  even  by  those  courts  which 
deny  to  the  attorney  the  right  to  compromise  a  claim  placed  in  his 
hand,  that  he  has  full  control  over  the  litigation  necessary  to  insure 
its  collection,  and  in  the  conduct  and  progress  of  it  may  take  such 
action  as  he  deems  proper.  The  reason  for  the  distinction  is  obvious : 
the  owner  of  the  claim  must  always  be  the  proper  judge  of  its  value, 
and  of  the  terms  upon  which  he  is  willing  to  extinguish  it,  or  to 
release  any  of  the  securities  by  which  it  was  protected  when  he 
placed  it  in  the  hands  of  the  attorney ;  and  the  latter,  therefore,  must 
consult  him  before  taking  any  step  which  is  likely  to  produce  these 
results.  But  the  client  cannot  know  as  well  as  his  lawyer  the  steps 
necessary  to  insure  its  collection,  or  estimate  so  accurately  the  value 
of  the  legal  securities  which  may  be  evolved  in  the  course  of  the 
litigation.  It  is  because  of  his  ignorance  of  these  matters  that  he 
employs  an  attorney,  and  submits  to  his  superior  judgment  the 
conduct  of  the  litigation. 

To  impose  upon  the  attorney  the  necessity  of  consulting  with  his 
client  whenever  propositions  are  made  to  him  with  regard  to  these 
matters,  which  in  his  judgment  are  advantageous,  would  so  embarrass 
*  and  thwart  him  as  in  a  great  measure  to  destroy  his  usefulness ;  hence 
it  is  that  the  courts  quite  generally  concede  to  the  attorney  unlimited 
authority  over  the  conduct  of  the  litigation,  including  the  power  to 
control  all  legal  process,  and  to  compromise  or  release  all  attachment 
or  other  liens  which  have  accrued  in  the  progress  of  the  cause,  as 
collateral  thereto,  and  not  belonging  to  the  original  demand.  Com- 
missioners V.  Younger,  29  Cal.  147;  Phillips  v.  Rounds,  33  Me.  357 
Gailard  v.  Smart,  6  Cow.  385;  Ford  v.  Williams,  13  N.  Y.  577 
Pierce  v.  Strickland,  2  Story,  292 ;  Monson  v.  Hawley,  30  Conn.  51 
Moulton  V.  Bowker,  115  Mass.  36;  Gordon  v.  Coolidge,  1  Sumn.  536 
Jenney  v.  Delesdernier,  20  Me.  183.  Some  of  the  cases  cited  extend 
to  the  attorney  a  wider  latitude  than  could  be  sanctioned  in  this 
state,  where,  by  a  series  of  adjudications,  his  authority  has  been 
confined  within  narrower  limits.  Thus,  it  has  been  held  that  he 
cannot  release  a  levy  on  personalty,  Banks  v.  Evans,  10  Smed.  & 
M.  35;  nor  grant  a  stay  of  execution,  Reynolds  v.  Ingersoll,  11  Smed. 
&  M.  249 ;  nor  assign  a  judgment  to  a  stranger  who  has  paid  him 
the  amount  due  on  it,  Walk.  431  (we  do  not  commit  ourselves  to 
an  indorsement  of  this  decision  to  its  full  extent)  ;  nor  compromise 
in  any  manner  the  claim  placed  in  his  hands.  Fitch  v.  Scott,  3  How. 


CHAP.   IX.]  SPECIAL   FORMS   OF   AGENCY.  383 

314;  nor  receive  an3rthing  save  lawful  money  in  satisfaction  of  it, 
Garvin  v.  Lowry,  7  Smed.  &  M.  24.  All  of  these  decisions  relate  to 
the  dealings  of  the  attorney  with  the  original  claim  placed  in  his 
hands,  and  the  liens  which,  by  operation  of  law,  follow  upon  its 
reduction  to  judgment.  They  are  believed  to  announce  a  rule  more 
stringent  than  that  which  prevails  elsewhere  in  so  far  as  they  deny 
authority  to  release  levies  and  stay  executions.  But  even  if  we  con- 
cede that  the  principle  inculcated  by  them  would  forbid  the  release 
by  the  attorney  of  any  security  acquired  during  the  litigation,  either 
against  the  original  debtor  or  against  any  person  who  may  have  made 
himself  liable  for  the  debt,  and  if  we  admit  that  the  attorney  is 
compelled  to  maintain  inviolate  and  unimpaired  both  the  claim 
placed  in  his  hand  and  the  liability  of  all  who  have  become  answerable 
for  it,  this  does  not  necessitate  a  repudiation  of  the  act  of  the  attor- 
ney in  this  case ;  and  while  we  are  not  called  upon  to  depart  from  the 
principle  of  these  decisions,  neither  do  we  propose  to  extend  it  fur- 
ther. The  bond  here  sued  upon  was  not  given  in  any  proceeding 
against  the  original  debtor,  Lowenhaupt,  nor  had  these  defendants 
in  any  manner  made  themselves  liable  for  his  engagements. 

In  releasing  them,  therefore,  the  attorney  was  neither  diminishing 
the  original  value  of  the  claim  placed  in  his  hands,  nor  extinguishing 
any  security  which  had  accrued  to  his  clients  in  the  litigation  with 
their  debtor. 

Their  judgment  against  that  debtor,  as  well  as  their  judgment 
against  the  garnished  debtors  of  that  debtor,  stand  yet  in  full  force 
and  unimpaired.  The  garnishees  had  filed  a  bill  which,  upon  its  face, 
afforded  good  ground  of  injunction,  and  which,  if  established,  would 
have  resulted  in  a  vacation  of  the  judgment  against  themselves. 
To  avoid  the  doubtful  result  of  this  litigation,  the  attorney  of  plain- 
tiffs agreed  that  if  the.  sureties  on  the  bond  would  pay  to  him  for 
his  clients  a  certain  sum,  to  be  credited  upon  the  judgments  which 
he  had  obtained  against  the  garnishees,  and  would  devote  to  the 
same  end  the  collaterals  which  had  by  the  garnishees  been  placed 
in  their  hands  to  save  them  from  loss,  he  would  release  and  discharge 
the  bond  executed  by  them.  Mrs.  Lowenhaupt  agreed  to  postpone 
her  claim  to  that  of  plaintiffs.  Bodenheim  &  Co.  agreed  to  dismiss 
their  bill.  All  this  was  carried  out  in  good  faith.  Now,  when  years 
have  elapsed,  when  Bodenheim  &  Co.  have  become  insolvent,  when 
the  collaterals  which  were  placed  in  the  hands  of  the  defendants  to 
indemnify  and  protect  them  have  either  been  collected  or  proven 
worthless,  this  suit  is  brought  to  assert  against  defendants  a  liability 
on  their  bond,  which  became  absolute  by  reason  of  the  dismissal  of 
the  bill  in  accordance  with  the  agreement  made  with  plaintiffs'  law- 
yer. It  is  true  that  plaintiffs  had  no  knowledge  of  this  agreement; 
but  it  is  also  true  that  but  for  the  agreement  the  bill  would  not  have 
been  dismissed,  and  the  absolute  liability  would  not  have  accrued. 


384    '  TYRBEL   V.    HAMMERSTEIN.  [CHAP.    IX. 

Plaintiffs  cannot  take  advantage  of  the  dismissal  of  the  bill,  induced 
by  their  attorney,  and  repudiate  the  release  of  the  sureties  on  the 
injunction-bond,  which  was  the  price  of  said  dismissal. 

Our  conclusion  is  that  the  agreement  entered  into  by  Miller  was 
within  the  scope  of  his  authority,  and  therefore  obligatory  on  his 
clients.  Judgment  affirmed. 


TYEEEL   V.   HAMMERSTEIN. 

33  Misc.   (N.  Y.  Sup.  Ct.,  Trial  T.)   505.     1900. 

McAdam,  J.  The  plaintiff  sues  to  recover  $147.75  for  printing 
the  cases  and  points  on  appeal  in  Gallinger  v.  Hammerstein,  in 
which  the  latter  had  been  defeated  in  the  lower  court.  Hammer- 
stein, who  is  defendant  here  as  well  as  there,  instructed  his  attorneys. 
Wise  &  Lichtenstein,  to  take  an  appeal  from  the  Gallinger  judgment. 
Such  authority  carried  with  it  everything  necessary  to  effectuate  its 
purpose,  including  the  printing  of  the  appeal-book  and  points, 
without  which  there  could  be  no  appeal  that  an  appellate  court 
would  hear. 

The  defendant  claims  that  because  the  order  for  the  printing  was 
given  by  his  attorneys  they,  and  not  he,  are  liable  to  the  printer  for 
the  bill.  The  law  is  the  other  way.  Attorneys-at-law,  like  other 
agents,  are  ordinarily  exempt  from  liability  to  third  persons  for 
w^hat  they  do  in  the  name  and  on  behalf  of  their  principals.  Wells 
Attys.,  §  127;  Eobins  v.  Bridge,  3  M.  &  W.  119;  Judson  v.  Gray, 
11  N.  Y.  408;  Covell  v.  Hart,  14  Hun,  252.  The  only  exceptions 
are  for  fees  to  public  officers  (Campbell  v.  Cothran,  56  N.  Y.  279; 
Judson  V.  Gray,  supra;  Eeilly  v.  Tullis,  10  Daly,  283),^  or  on  obliga- 
tions on  which  the  attorney  has  pledged  his  personal  credit.     An 

*  "  The  point  is  taken  by  the  defendant  that  assuming  that  the  sheriff  Is  entitled 
to  his  fees  on  the  whole  sum  directed  to  be  levied  by  the  execution,  his  remedy  Is 
against  the  plaintiff  in  the  judgment,  and  that  an  action  cannot  be  maintained  there- 
for against  the  defendant,  who  acted  as  his  known  agent  and  attorney  in  Issuing 
the  execution.  This  question  was  decided  by  the  Supreme  Court  In  1810,  in  the  case 
of  Adams  v.  Hopkins,  5  J.  R.  252,  In  an  action  brought  against  an  attorney  to 
recover  sheriff's  fees  for  arresting  a  defendant  on  a  ca.  sa.,  and  the  court  held  that 
the  attorney  who  issued  the  execution  was  liable.  This  decision  has  been  followed 
in  subsequent  cases.  Ousterhout  v.  Day,  9  J.  R.  114  ;  Trustees  of  Watertown  v. 
Cowen,  5  Paige,  510 ;  Camp  v.  Garr,  6  Wend.  535.  It  may  well  be  doubted  whether 
the  rule  laid  down  in  Adams  v.  Hopkins,  can  be  maintained  upon  principle,  or  is 
consistent  with  the  general  current  of  Judicial  authority  elsewhere  (Judson  v.  Gray, 
11  N.  Y.  408).  But  it  has  been  for  more  than  sixty  years  the  law  of  this  State. 
No  practical  injustice  results  from  enforcing  It,  as  attorneys  act  in  view  of  the 
liability  they  incur  in  issuing  executions,  and  it  ought  not  now  to  be  disturbed." 
Campbell  v.  Cothran,  56  N.  Y.  at  pages  280,  281. 

The  court,  in  Judson  v.  Gray,  11  N.  Y.  at  page  412,  said  :  "  It  is  clear,  there- 
fore, that  the  decisions  in  this  State,  in  which  attorneys  and  solicitors  have  been 
held  liable  for  the  fees  of  the  officers  of  the  court,  upon  a  promise  implied  from 
their  acts  done  as  attorneys  merely,  are  in  conflict  with  principle,  and  with  the 
whole  current  of  authorities  elsewhere  on  the  subject."     See  cases  In  Chapter  XV. 


CHAP.    IX.]  SPECIAL   FORMS   OE   AGENCY.  385 

attorney,  in  the  management  of  his  client's  case,  has  authority  to 
make  whatever  necessary  disbursements  the  case  requires.  This  is 
implied  from  the  relation  between  attorney  and  client,  from  which 
a  request  upon  the  part  of  the  latter  is  presumed.  Packard  v. 
Stephani,  85  Hun,  197;^  Brown  v.  Travelers'  L.  &  A.  Ins.  Co., 
21  App.  Div.  42.^  The  client,  as  the  party  benefited,  is  therefore 
liable  for  referee's  fees  (Nealis  v.  Meyer,  21  Misc.  Hep.  344;  Harry 
V.  Hilton,  11  Daly,  232)  and  stenographer's  fees  (Coale  v.  Suckjert, 
18  Misc.  Rep.  76),  while  the  attorney  is  neither  liable  for  the  former 
(Judson  V.  Gray,  11  N.  Y.  408)  nor  the  latter.    Bonynge  v.  Water- 

•  This  was  an  action  brought  to  recover  upon  a  quantum  meruit  the  reasonable 
value  of  the  services  of  a  physician  for  testifying  as  an  expert  witness  before  a  com- 
mission appointed  to  examine  into  the  sanity  of  the  defendant,  and  upon  the  trial 
of  the  defendant  for  murder.  The  trial  judge  directed  a  verdict  for  the  defendant 
on  the  ground  that  the  physician  had  notice  before  he  testified  that  the  defendant 
did  not  desire  his  attendance.  In  denying  a  motion  for  a  new  trial,  the  General 
Term  said  : 

"  There  can  be  no  doubt  of  the  authority  of  an  attorney  In  the  conduct  and  man- 
agement of  his  client's  case  to  make  such  necessary  and  proper  disbursements  as  the 
case  shall  require.  This  authority  can  be  implied  merely  from  the  relation  between 
attorney  and  client,  from  which  a  request  on  the  part  of  the  latter  would  be  pre- 
sumed. And  we  think  it  equally  true  that,  however  necessary  the  services  might 
be  regarded  by  the  attorney  in  the  client's  interest,  the  latter  has  a  right  to  refuse 
to  incur  them,  and  the  attorney  could  not  charge  the  client,  except  In  favor  of  some 
one  who  acted  upon  the  presumed  authority  with  which  such  attorney  was  clothed. 
Where,  however,  the  person  seeking  to  recover  upon  the  implied  or  presumed  author- 
ity which  grows  out  of  the  client's  relation  to  the  attorney,  is  notified  that  the 
attorney  has  no  right  to  incur  the  expense,  he  cannot  hold  the  client  responsible. 
Were  it  otherwise,  an  attorney  might  compel  the  client  to  pay  any  and  all  sums, 
however  much  beyond  the  means  or  inclination  of  the  client  in  a  particular  case, 
and  notwithstanding  the  person  towards  whom  the  obligation  was  incurred  had 
notice  of  the  restricted  or  questionable  right  of  the  attorney."  Packard  v.  Stephani, 
85  Ilun,  at  p.  199. 

^  In  this  case  it  was  held  that  an  attorney  employed  on  a  salary  by  a  foreign  cor- 
poration engaged  In  the  city  of  New  York,  where  it  has  an  office  and  general  man- 
ager, in  insuring  employers  against  liability  for  injuries  to  employees  or  third 
jiarties,  and  which  is  entitled,  by  the  terms  of  its  policies,  to  control  the  defence  of 
actions  brought  against  its  policy-holders,  has  authority,  upon  being  notified  by  the 
general  manager  of  the  fact  that  a  building  which  the  holder  of  one  of  its  policies 
was  engaged  in  constructing  had  collapsed,  occasioning  loss  of  life  and  injuries  to 
persons,  to  employ  an  engineering  expert  to  examine  the  building,  although  no  action 
has  as  yet  been  commenced  against  the  policy-holder,  it  being  admitted  that  the 
attorney  was  the  attorney  for  the  company  in  the  particular  matter  in  which  the 
expert  was  employed  and  was  called  upon  by  its  general  manager  to  act  therein. 
The  court  said :  "  Had  there  been  at  the  time  a  suit  pending  against  the  defendant, 
it  would  seem  settled  by  authority  that  Johnson  would  have  had  power  to  employ 
the  plaintiff  for  the  purpose  of  making  the  examination,  and  testifying  upon  the  trial, 
without  any  special  authority  to  that  effect.  .  .  .  Does  the  fact  that  no  action  had 
been  instituted  at  the  time  make  his  principle  inapplicable?  We  think  not.  W^here 
the  case  is  that  of  the  prosecution  of  a  claim,  it  is  clear  that  the  authority  of  the 
attorney  must  precede  the  commencement  of  the  action,  and  begin  at  the  time  of  his 
retainer.  The  rule  should  be  the  same  where  an  attorney  is  retained  to  defend  an 
expected  suit.  By  the  Code,  evidence  can  be  perpetuated  for  use  in  an  anticipated 
litigation  as  well  as  in  a  pending  suit.  Often  evidence,  if  not  obtained  at  the  time 
of  the  occurrence,  cannot  be  subsequently  procured.  This  was  especially  true  of  that 
which  it  was  expected  the  plaintiff  might  be  able  to  give.  We  do  not  say  that  John- 
son, by  virtue  only  of  his  general  employment  as  legal  adviser,  might  Incur  this 
liability  for  the  defendant,  but  the  admission  is  that  he  was  the  attorney  of  defend- 
ant in  this  particular  matter,  and  he  was  called  upon  to  act  by  the  New  York  man- 
a;rer.  Now  the  particular  matter  was  the  expected  actions  against  the  Cornells 
against  which  the  defendant  had  agreed  to  Indemnify  the  Cornells,  and  the  de- 
fence of  which  the  defendant  was  entitled  to  control.  It  Is,  therefore,  the  same  as  if 
.Tohnson  had  been  retained  to  defend  a  particular  suit.  His  authority  would  be  as 
great  in  one  case  as  in  the  other,  and  sufficient  to  render  his  client  liable  for  any 
reasonable  expenditure."  Brown  v.  Travellers'  Life  Ins.  Co.,  21  App.  Div.  at  pages 
43  and  44, 

26 


386  merchants'  bank  v.  state  bank.         [chap.  IX. 

bury,  12  Hun,  534;  Bonynge  v.  Field,  81  N.  Y.  159;  affg.,  44  N.  Y. 
Super.  Ct.  581,  and  see  22  Moak  Eng.  Rep.  505,  and  notes.  The 
defendant  certainly  owed  the  bill  sued  for,  and  there  is  no  allegation 
that  it  was  paid  to  anyone.  .  .  .  Judgment  for  plaintiff. 


e.    Bank  Cashiers. 
MERCHANTS'   BANK   v.    STATE   BANK. 

10  Wall.  (U.  S.)  604.     1870. 

Action  on  three  checks  drawn  by  M.  W.  &  Co.  upon  defendant 
bank,  and  certified  as  "  good  "  by  its  cashier.  Judgment  directed  for 
defendant.     Plaintiff  brings  error. 

M.  W.  &  Co.  negotiated  with  plaintiff  for  the  purchase  of  gold. 
A  representative  of  M.  W.  &  Co.,  and  the  cashier  of  defendant  bank, 
went  to  plaintiff  bank,  counted  the  gold  certificates,  and  gave  plain- 
tiff a  check,  which  defendant's  cashier  then  certified  as  "  good." 
It  did  not  appear  whether  defendant  was  interested  in  the  gold  pur- 
chase, and  the  action  may  here  be  treated  as  upon  the  certification 
of  the  checks.  Evidence  was  introduced  that  tended  to  show  that 
over  twenty  bank  cashiers  in  Boston  had  never  certified  checks  ex- 
cept by  express  authority.  Defendant  denies  that  its  cashier  had 
authority  to  certify  checks. 

Mr.  Justice  Swayne.  .  .  ,  But  it  is  strenuously  denied  that  the 
cashier  had  authority  to  certify  the  checks  in  question.  .  .  . 

The  power  of  the  bank  to  certify  checks  has  been  sufficiently 
examined.  The  question  we  are  now  considering  is  the  authority 
of  the  cashier.  It  is  his  duty  to  receive  all  the  funds  which  come  into 
the  bank,  and  to  enter  them  upon  its  books.  The  authority  to  receive 
implies  and  carries  with  it  authority  to  give  certificates  of  deposit 
and  other  proper  vouchers.  Where  the  money  is  in  the  bank,  he  has 
the  same  authority  to  certify  a  check  to  be  good,  charge  the  amount 
to  the  drawer,  appropriate  it  to  the  payment  of  the  check,  and  make 
the  proper  entry  on  the  books  of  the  bank.  This  he  is  authorized  to 
do  virtuie  officii.  The  power  is  inherent  in  the  office.  Wild  v.  The 
Bank  of  Passamaquoddy,  3  Mason,  506 ;  Burnham  v.  Webster,  19 
Me.  232 ;  Elliot  v.  Abbot,  12  N.  H.  549 ;  Bank  of  Vergennes  v.  War- 
ren, 7  Hill,  91;  Lloyd  v.  The  West  Branch  Bank,  15  Pa.  St.  172; 
Badger  v.  The  Bank  of  Cumberland,  26  Me.  428:  Bank  of  Kentucky 
V.  The  Schuylkill  Bank,  1  Parson's  Select  Cases,  182;  Fleckner  v. 
Bank  of  the  United  States,  8  Wheat.  338. 

The  cashier  is  the  executive  officer,  through  whom  the  whole 
financial  operations  of  the  bank  are  conducted.    He  receives  and  pays 


CHAP.  IX.]  SPECIAL  FORMS  OP  AGENCY.  387 

out  its  moneys,  collects  and  pays  its  debts,  and  receives  and  transfers 
its  commerical  securities.  Tellers  and  other  subordinate  officers  may 
be  appointed,  but  they  are  under  his  direction,  and  are,  as  it  were, 
the  arms  by  which  designated  portions  of  his  various  functions  are 
discharged.  A  teller  may  be  clothed  with  the  power  to  certify  checks, 
but  this  in  itself  would  not  affect  the  right  of  the  cashier  to  do  the 
same  thing.  The  directors  may  limit  his  authority  as  they  deem 
proper,  but  this  would  not  affect  those  to  whom  the  limitation  was 
unknown.  Commercial  Bank  of  Lake  Erie  v.  J^orton  et  al.,  1  Hill, 
501 ;  Bank  of  Vergennes  v.  Warren,  7  id.  91 ;  Beers  v.  The  Phoenix 
Glass  Co.,  14  Barb.  358;  Farmers'  &  Mechanics'  Bank  v.  Butchers' 
&  Drovers'  Bank,  14  N.  Y.  624;  North  River  Bank  v.  Aymar,  3  Hill, 
262,  268 ;  Barnes  v.  Ontario  Bank,  19  N.  Y.  152,  166. 

The  foundation  upon  which  this  liability  rests  was  considered 
in  an  earlier  part  of  this  opinion.  Those  dealing  with  a  bank  in 
good  faith  have  a  right  to  presume  integrity  on  the  part  of  its  oflBcers, 
when  acting  within  the  apparent  sphere  of  their  duties,  and  the  bank 
is  bound  accordingly. 

In  Barnes  v.  The  Ontario  Bank,  19  N".  Y.  152,  the  cashier  had 
issued  a  false  certificate  of  deposit.  In  the  Farmers'  &  Mechanics' 
Bank  v.  The  Butchers'  &  Drovers'  Bank,  14  X.  Y.  624;  S.  C.  16 
N.  Y.  133,  and  in  Meads  v.  The  Merchants'  Bank  of  Albany,  25 
X.  Y.  143,  the  teller  had  fraudulently  certified  a  check  to  be  good. 
In  each  case  the  bank  was  held  liable  to  an  innocent  holder. 

It  is  objected  that  the  checks  were  not  certified  by  the  cashier  at 
his  banking-house.  The  provision  of  the  Act  of  Congress  as  to  the 
place  of  business  of  the  banks  created  under  it  must  be  construed 
reasonably.  The  business  of  every  bank  away  from  its  office  —  fre- 
quently large  and  important  —  is  unavoidably  done  at  the  proper 
place  by  the  cashier  in  person,  or  by  correspondents,  or  other  agents. 
In  the  case  before  us,  the  gold  must  necessarily  have  been  bought, 
if  at  all,  at  the  buying  or  the  selling  bank,  or  at  some  third  locality. 
The  power  to  pay  was  vital  to  the  power  to  buy,  and  inseparable 
from  it.  There  is  no  force  in  this  objection.  Bank  of  Augusta  v. 
Earle,  13  Pet.  519 ;  Pendleton  v.  Bank  of  Kentucky,  1  T.  B.  Monroe, 
171.  .  .  .  Judgment  reversed,  and  a  venire  de  novo  awarded.^ 

»  In  Matthews  v.  Mass.  Nat.  Bank,  16  Fed.  Cas.  (U.  S.'Clr.  Ct.,  Dist.  Mass.)  1113, 
the  defendant  bank  had  loaned  money  to  one  Coe  upon  a  forged  certificate  of  stock. 
Upon  repayment  of  the  loan  the  cashier  of  the  bank  returned  to  Coe  the  certificate 
with  the  usual  printed  form  of  transfer  on  the  back  thereof,  signed  by  the  cashier  of 
the  bank  In  blank.  Later,  the  plaintiff  loaned  money  to  Coe  upon  the  same  cer- 
tificate. The  signature  of  the  cashier  was  well  known  to  the  plaintiff  who  cor- 
rectly supposed  the  signature  on  the  blank  assignment  to  be  genuine.  The  plaintiff 
recovered  judgment  against  the  bank  on  this  endorsement.  The  court  said  In  part : 
"  The  real  question  presented  In  the  case  Is,  whether  the  bank  by  signing  the  blank 
transfer  has  so  far  warranted  the  genuineness  of  the  certificate  that  It  Is  estopped 
from  setting  up  the  forgery  as  a  defence  to  this  action.  Defendant  denies  that  the 
cashier  had  authority  or  right  to  bind  the  bank  by  the  contract  declared  on. 
Cashiers  of  a  bank  are  held  out  to  the  public  as  having  authority  to  act  according 
to  the  general  usage,  practice,  and  course  of  business  conducted  by  the  bank.    Their 


388  merchants'  bank  v.  state  bank.         [chap.  ix. 

Mr.  Justice  Clifford  (with  whom  concurred  Mr.  Justice  Davis) 
read  a  dissenting  opinion. 

acta  within  the  scope  of  such  usage,  practice,  and  course  of  business,  will  In  general 
hind  the  bank  In  favor  of  third  persons  possessing  no  other  Icnowledge.  Morse  v. 
Mass.  Nat.  Bank  (Case  No.  9,857)  ;  Minor  v.  Mechanics'  Bank.  1  Pet.  (U.  S.)  70; 
Merchants'  Bank  v.  State  Bank,  10  Wall.  (U.  S.)  604.  One  of  the  ordinary  and 
well  known  duties  of  the  cashier  of  a  bank  is  the  surrender  of  notes  and  securities 
upon  payment ;  and  his  signature  to  the  necessary  transfers  of  securities  or  col- 
laterals, when  in  the  form  of  bills  of  exchange,  choses  in  action,  stock  certificates,  or 
similar  securities  for  loans,  which  are  personal  property,  is  an  act  within  the  scope 
of  the  general  usage,  practice,  and  course  of  business.  In  which  cashiers  of  a  bank 
are  held  out  to  the  public  as  having  authority  to  act.  Undoubtedly  the  ordinary 
duties  of  a  cashier  do  not  comprehend  the  making  of  a  contract  which  Involves  the 
payment  of  money,  without  an  express  authority  from  the  directors,  unless  it  be 
such  as  relates  to  the  usual  and  customary  transactions  of  the  bank.  But  the  trans- 
fer of  certificates  of  stock  held  as  collateral  is  certainly  one  of  the  usual  and  cus- 
tomary transactions  of  banks,  and  the  public  would  be  no  more  likely  to  require 
evidence  of  a  special  authority  to  the  cashier  to  make  such  transfer  than  of  a 
special  authority  to  draw  checks  on  other  banks,  or  to  perform  any  other  of  the 
dally  duties  of  his  ofllce." 


CHAP.   X.]  LIABILITY   OF   UNDISCLOSED   PRINCIPAL.  389 


CHAPTER   X. 

Contract  of  Agent  in  Behalf  of  Undisclosed  Pkinoipal. 

1.    Liability  of  Undisclosed  Principal:  General  Rule. 
KAYTON   V.   BARNETT. 

116  N.  Y.  625.     1889. 

Action  to  recover  a  balance  of  purchase  price  due  for  property 
sold  and  delivered  to  one  Bishop,  ostensibly  for  himself,  but  secretly 
purchased  by  him  for  defendants.  Plaintiffs  non-suited,  and  judg- 
ment for  defendants.    Plaintiffs  appeal. 

FoLLETT^  C.  J.  When  goods  are  sold  on  credit  to  a  person  whom 
the  vendor  believes  to  be  the  purchaser,  and  he  afterwards  discovers 
that  the  person  credited  bought  as  agent  for  another,  the  vendor 
has  a  cause  of  action  against  the  principal  for  the  purchase  price. 
The  defendants  concede  the  existence  of  this  general  rule,  but  assert 
that  it  is  not  applicable  to  this  case,  because,  while  Bishop  and  the 
plaintiffs  were  negotiating,  they  stated  they  would  not  sell  the 
property  to  the  defendants,  and  Bishop  assured  them  he  was  buying 
for  himself,  and  not  for  them.  It  appears,  by  evidence  which  is 
wholly  uncontradicted,  that  the  defendants  directed  every  step  taken 
by  Bishop  in  his  negotiations  with  plaintiffs;  that  the  property »was 
purchased  for  and  delivered  to  the  defendants,  who  have  ever  since 
retained  it;  that  they  paid  the  $3,000  towards  the  purchase  price,  and 
agreed  with  Bishop,  after  the  notes  had  been  delivered,  to  hold  him 
harmless  from  them.  Xotwithstanding  the  assertion  of  the  plaintiffs 
that  they  would  not  sell  to  the  defendants,  they,  through  the  circum- 
vention of  Bishop  and  the  defendants,  did  sell  the  property  to  the 
defendants,  who  have  had  the  benefit  of  it,  and  have  never  paid  the 
remainder  of  the  purchase  price  pursuant  to  their  agreement.  Bishop 
was  the  defendants'  agent.  Bishop's  mind  was,  in  this  transaction, 
the  defendants'  mind,  and  so  the  minds  of  the  parties  met,  and  the 
defendants  having,  through  their  own  and  their  agent's  deception, 
acquired  the  plaintiffs'  property  J)y  purchase,  cannot  successfully 
assert  that  they  are  not  liable  for  the  remainder  of  the  purchase  price 
because  they,  through  their  agent,  succeeded  in  inducing  the  de- 
fendants to  do  that  which  they  did  not  intend  to  do,  and,  perhaps, 
would  not  have  done  had  the  defendants  not  dealt  disingenuously. 


390  HUBBARD  V.   TENBBOOK.  [CHAP,   X. 

The  Judgment  should  be  reversed  and  a  new  trial  ordered,  with 
costs  to  abide  the  event. 
All  concur,  except  Haight,  J.,  not  sitting. 

Judgment  reversed. 


HUBBAED   V.   TENBROOK. 

124  Pa.  St.  291.     1889. 

Assumpsit  for  goods  sold  and  delivered  to  one  Sides,  doing  busi- 
ness in  his  own  name,  but  secretly  for  defendants.  Judgment  for 
plaintiff  upon  the  pleadings.    Defendants  bring  error. 

Mr.  Justice  Mitchell.  This  case  affords  one  among  many  exam- 
ples of  the  failure  of  the  so-called  reformed  procedure  to  accomplish 
anything  towards  the  brevity,  the  clearness,  the  accuracy,  or  the 
convenience  of  legal  forms.  So  long  as  the  fundamental  principle 
of  our  remedial  jurisprudence  shall  be,  that  upon  conflicting  evidence 
the  jury  shall  ascertain  the  facts,  and  upon  ascertained  facts  the 
judges  shall  pronounce  the  law,  so  long  will  it  be  a  cardinal  rule 
of  pleading,  by  whatever  name  pleading  shall  be  called,  that  the 
line  of  distinction  between  facts  and  the  evidence  to  prove  them 
shall  be  kept  clear  and  well-defined.  The  notion  of  the  reforming 
enthusiast  that  the  average  litigant  or  his  average  lawyer  can  make 
a  shorter,  clearer,  or  less  redundant  statement  of  his  case  if  left  to 
his  own  head,  than  if  directed  and  restrained  by  the  settled  forms, 
sifted,  tested,  and  condensed  as  they  have  been  by  generations  of  the 
acutest  intellects  ever  devoted  to  a  logical  profession,  is  as  vain  as  that 
of  any  other  compounder  of  panaceas. 

The  plaintiff's  statement  is  at  least  three  times  as  long  as  a 
declaration  in  the  established  forms  need  have  been,  and  about  half 
of  it  is  occupied,  not  with  the  averment  of  facts,  but  with  a  recital 
of  evidence.  Indeed,  the  strongest  argument  for  the  defendants  is 
that  the  statement  fails  to  aver  two  essential  facts,  to  wit,  the  delivery 
of  the  goods  to  Sides,  and  the  agency  of  Sides  for  the  defendants  as 
his  undisclosed  principals. 

Fortunately  for  the  plaintiff,  his  statement  is  helped  out  as  to  the 
first  fact  by  the  bill  of  particulars,  which,  being  sworn  to  be  a  copy 
of  his.  book  of  original  entry,  imports  delivery  as  well  as  sale.  The 
agency,  though  stated  in  the  objectionable  form  of  an  inference  from 
the  previously  recited  evidence,  is  clearly  intended  to  be  averred,  and 
may  fairly  be  so  treated. 

Taking  the  statement,  therefore,  in  its  plain  intent,  it  sets  out  that 
plaintiff  sold  and  delivered  a  quantity  of  hams  to  one  Sides,  who 
was  conducting  a  grocery  business  in  his  own  name,  but  with  the 
property  and  as  the  agent  of  defendants.    The  defendants  filed  an 


CHAP.   X.]  LIABILITY  OF   UNDISCLOSED  PRINCIPAL.  391 

affidavit  of  defence,  and  a  supplementary  one,  the  substance  of  which 
is  that  "  Sides  was  not  the  agent  of  defendants  to  purchase  from 
plaintiff  or  any  one  else,"  and  that  he  "was  employed  as  salesman 
only,  by  said  defendants,  without  any  authority  whatever  to  act  for 
or  bind  defendants  for  the  purchase  of  any  goods  or  merchandise 
upon  credit  of  the  said  defendants."  We  have  thus  the  question 
presented  whether  an  agent  may  be  put  forward  to  conduct  a  separate 
business  in  his  own  name,  and  the  principal  escape  liability  by  a  secret 
limitation  on  the  agent's  authority  to  purchase. 

The  answer  is  not  at  all  doubtful.  A  man  conducting  an  appar- 
ently prosperous  and  profitable  business  obtains  credit  thereby,  and 
his  creditors  have  a  right  to  suppose  that  his  profits  go  into  his  assets 
for  their  protection  in  case  of  a  pinch  or  an  unfavorable  turn  in  the 
business.  To  allow  an  undisclosed  principal  to  absorb  the  profits, 
and  then  when  the  pinch  comes  to  escape  responsibility  on  the  ground 
of  orders  to  his  agent  not  to  buy  on  credit,  would  be  a  plain  fraud  on. 
the  public. 

No  exact  precedent  has  been  cited;  none  is  needed.  The  rule  so 
vigorously  contended  for  by  the  plaintiff  in  error,  that  those  dealing 
with  an  agent  are  bound  to  look  to  his  authority,  is  freely  conceded ; 
but  this  case  falls  within  the  equally  established  rule  that  those  cloth- 
ing an  agent  with  apparent  authority  are,  as  to  parties  dealing  on 
the  faith  of  such  authority,  conclusively  estopped  from  denying  it. 

The  affidavits  set  up  no  available  defence,  and  the  judgment  is 

Affirmed. 


WATTEAU   V.   FENWICK. 

[1893]  1  Q.  B.  346. 

Action  for  goods  sold  and  delivered  to  one  Humble,  doing  busi- 
ness in  his  own  name,  but  secretly  for  defendants.  Judgment  for 
plaintiff.    Defendants  appeal. 

Lord  Coleridge,  C.  J.  The  judgment  which  I  am  about  to  read 
has  been  written  by  my  Brother  Wills,  and  I  entirely  concur  in  it. 

Wills,  J.  The  plaintiff  sues  the  defendants  for  price  of  cigars 
supplied  to  the  Victoria  Hotel,  Stockton-upon-Tees.  The  house  waa 
kept,  not  by  the  defendants,  but  by  a  person  named  Humble,  whose 
name  was  over  the  door.  The  plaintiff  gave  credit  to  Humble,  and 
to  him  alone,  and  had  never  heard  of  the  defendants.  The  business, 
however,  was  really  the  defendants',  and  they  had  put  Humble  into 
it  to  manage  it  for  them,  and  had  forbidden  him  to  buy  cigars  on 
credit.  The  cigars,  however,  were  such  as  would  usually  be  supplied 
to  and  dealt  in  at  such  an  establishment.    The  learned  county-court 


392  WATTEAD  V.  FENWICK.  [CHAP.  X. 

judge  held  that  the  defendants  were  liable.    I  am  of  opinion  that  he 
was  right. 

There  seems  to  be  less  of  direct  authority  on  the  subject  than  one 
would  expect.  But  I  think  that  the  Lord  Chief  Justice  during  the 
argument  laid  down  the  correct  principle,  viz.,  once  it  is  established 
that  the  defendant  was  the  real  principal,  the  ordinary  doctrine  as 
to  principal  and  agent  applies,  —  that  the  principal  is  liable  for  all 
the  acts  of  the  agent  which  are  within  the  authority,  usually  confided 
to  an  agent  of  that  character,  notwithstanding  limitations,  as  be- 
tween the  principal  and  the  agent,  put  upon  that  authority.  It  is 
said  that  it  is  only  so  where  there  has  been  a  holding  out  of  authority, 
which  cannot  be  said  of  a  case  where  the  person  supplying  the  goods 
knew  nothing  of  the  existence  of  a  principal.  But  I  do  not  think  so. 
Otherwise,  in  every  case  of  undisclosed  principal,  or  at  least  in  every 
case  where  the  fact  of  there  being  a  principal  was  undisclosed,  the 
secret  limitation  of  authority  would  prevail  and  defeat  the  action 
of  the  person  dealing  with  the  agent  and  then  discovering  that  he 
was  an  agent  and  had  a  principal. 

But  in  the  case  of  a  dormant  partner,  it  is  clear  law  that  no 
limitation  of  authority  as  between  the  dormant  and  active  partner 
will  avail  the  dormant  partner  as  to  things  within  the  ordinary 
authority  of  a  partner.  The  law  of  partnership  is,  on  such  a  ques- 
tion, nothing  but  a  branch  of  the  general  law  of  principal  and  agent, 
and  it  appears  to  me  to  be  undisputed  and  conclusive  on  the  point 
now  under  discussion. 

The  principle  laid  down  by  the  Lord  Chief  Justice,  and  acted  upon 
by  the  learned  county-court  judge,  appears  to  be  identical  with  that 
enunciated  in  the  judgments  of  Cockbum,  C.  J.,  and  Mellor,  J., 
in  Edmunds  v.  Bushell,  Law  Eep.  1  Q.  B.  97,  the  circumstances  of 
which  case,  though  not  identical  with  those  of  the  present,  come  very 
near  to  them.  There  was  no  holding  out,  as  the  plaintiff  knew 
nothing  of  the  defendant.  I  appreciate  the  distinction  drawn  by 
Mr.  Finlay  in  his  argument,  but  the  principle  laid  down  in  the 
judgments  referred  to,  if  correct,  abundantly  covers  the  present  case. 
I  cannot  find  that  any  doubt  has  ever  been  expressed  that  it  is 
correct,  and  I  think  it  is  right,  and  that  very  mischievous  conse- 
quences would  often  result  if  that  principle  were  not  upheld. 

In  my  opinion  this  appeal  ought  to  be  dismissed  with  costs. 

Appeal  dismissed. 


CHAP.    X,]  LIABILITY   OF    UNDISCLOSED   PRINCIPAL.  393 

CITY   TKUST,   ETC.,   CO.   v.   AMERICAN   BREWING   CO. 
174  N.  Y.  486.     1903. 

Appeal  from  an  order  of  the  Appellate  Division  of  the  Supreme 
Court  in  the  fourth  judicial  department,  entered  March  17,  1902, 
sustaining  plaintiff's  exceptions,  ordered  to  be  heard  in  the  first 
instance  by  the  Appellate  Division,  and  granting  a  motion  for  a 
new  trial. 

The  nature  of  the  action  and  the  facts,  so  far  as  material,  are  stated 
in  the  opinion. 

Pakker,  Ch.  J.  Upon  this  review  the  complaint  must  be  accepted 
as  true  and  from  it  it  appears  that  plaintiff  became  surety  on  a  bond 
executed  by  John  M.  Kurtz  to  the  People  of  the  state  of  New  York 
in  the  simi  of  $1,000,  the  condition  being  that  if  a  liquor  tax  certifi- 
cate should  be  granted  to  Kurtz  he  would  not  permit  any  gambling 
upon  the  licensed  premises,  etc.  The  certificate  was  issued  to  Kurtz, 
and  subsequently  a  judgment  was  entered  against  Kurtz  and  this 
plaintiff  as  principal  and  surety  on  the  bond  for  a  breach  of  the 
condition  in  that  Kurtz  had  maintained  on  the  licensed  premises 
a  nickel-in-the-slot  machine,  which  was  there  used  for  gambling 
purposes. 

Before  the  trial  in  that  action  this  plaintiff  discovered  that  de- 
fendant herein  was  the  real  owner  of  such  liquor  tax  certificate  and 
of  the  nickel-in-the-slot  machine  and  it  demanded  that  defendant 
assume  the  defence  of  the  action,  which  it  refused. 

After  satisfying  said  judgment  plaintiff  brought  this  action,  alleg- 
ing in  the  complaint,  in  substance,  in  addition  to  the  facts  already 
stated,  that  defendant  was  the  real  owner  of  the  certificate  and  the 
proprietor  of  the  business,  employing  Kurtz,  paying  his  compensa- 
tion, furnishing  the  articles  sold,  bearing  all  losses,  and  pocketing 
the  profits,  when  there  were  any;  that  Kurtz  was  but  the  representa- 
tive and  servant  of  the  defendant  when  he  applied  for  the  certificate 
and  when  he  applied  to  plaintiff  to  become  surety;  that  plaintiff 
supposed  he  was  the  principal  —  having,  therefore,  an  incentive  to 
obey  the  law  —  whereas  defendant  controlled  the  business  and  prem- 
ises and  maintained  therein  a  nickel-in-the-slot  machine,  operated  by 
its  direction  and  for  its  profit. 

Defendant,  therefore,  had  the  benefit  of  plaintiff's  suretyship — • 
for  without  some  surety  a  certificate  could  not  have  been  issued  — 
and  to  its  conduct,  solely,  it  was  due  that  plaintiff  was  compelled  to 
pay  the  penalty  of  the  bond,  for  it  maintained  the  gambling  device 
which  constituted  a  breach  of  the  condition  of  the  bond;  and  the 
inquiry  is,  can  plaintiff  recover  from  defendant  the  loss  which  the 
latter  has  cost  it? 


394  lEVINE  V.   WATSON.  [CHAP.   X. 

Plaintiff  could  recover  of  Kurtz,  and  probably  would  were  he 
responsible ;  but  why  may  he  not  recover  from  the  party  which,  while 
benefiting  by  the  suretyship,  committed  the  injury?  —  from  the 
hidden  principal  that  by  a  wrongful  act,  prohibited  by  the  conditions 
of  the  bond  and  forbidden  by  statute,  caused  a  loss  to  this  defendant  ? 

Ever  since  Justinian  said,  "  The  maxims  of  law  are  these :  to 
live  honestly,  to  hurt  no  man  and  to  give  every  one  his  due,"  it  has 
been  a  leading  object  of  jurisprudence  to  compel  wrongdoers  to  make 
reparation.  Now,  it  is  a  general  rule  of  law  that  a  person  commits 
a  tort  and  renders  himself  liable  for  damages  who  does  some  act 
forbidden  by  law  if  that  act  causes  another  substantial  loss  beyond 
that  suffered  by  the  rest  of  the  public ;  and  that  rule  covers  this  case. 

Defendant  through  its  agent,  Kurtz,  induced  plaintiff  to  become 
a  surety  on  the  bond  for  Kurtz  and  then,  in  violation  of  the  statute, 
it  conducted  a  nickel-in-the-slot  machine  on  the  premises,  by  means 
of  which  misconduct  the  surety  was  compelled  to  pay  the  penal  sum 
of  the  bond.  In  other  words,  defendant  committed  an  act  forbidden 
by  law  and  the  direct  effect  of  its  act  was  to  cause  plaintiff  a  sub- 
stantial loss  beyond  that  suffered  by  the  rest  of  the  public;  and  for 
the  damage  thus  sustained  it  should  respond  to  plaintiff. 

The  order  should  be  affirmed,  and  judgment  absolute  ordered  for 
plaintiff  on  the  stipulation,  with  costs. 

Gray,  Bartlett,  Haight,  Martin  and  Vann,  JJ.,  concur; 
O'Brien,  J.,  not  voting.  Order  affirmed,  etc. 


KEIGHLEY   v.   DUEANT. 

[1901]  A.  C.  240  (H.  L.). 
[Reported  herein  at  p.  64.] 


2.    Same:  Exception  as  to  State  of  Accounts. 
lEVINE   V.   WATSON. 

5  Q.  B.  D.   (C.  A.)  414.     1880. 

Action  to  recover  the  price  of  certain  casks  of  oil.  Judgment  for 
plaintiffs.     Defendants  appeal. 

Bramwell,  L.  J.  I  am  of  opinion  that  the  judgment  must  be 
affirmed.  The  facts  of  the  case  are  shortly  these :  The  plaintiffs  sold 
certain  casks  of  oil,  and  on  the  face  of  the  contract  of  sale  Conning 
appeared  as  the  purchaser.  But  the  plaintiffs  knew  that  he  was  only 
an  agent  buying  for  principals,  for  he  told  them  so  at  the  time  of  the 


CHAP.  X.]  same:    exception  as  to  accounts.  395 

sale,  therefore  they  knew  that  they  had  a  right  against  somebody 
besides  Conning.  On  the  other  hand,  the  defendants  knew  that  some- 
body or  other  had  a  remedy  against  them,  for  they  had  authorized 
Conning,  who  was  an  ordinary  broker,  to  pledge  their  credit,  and  the 
invoice  specified  the  goods  to  have  been  bought  "  per  John  Conning." 
Then,  that  being  so,  the  defendants  paid  the  broker ;  and  the  question 
is  whether  such  payment  discharged  them  from  their  liability  to  the 
plaintiffs.  I  think  it  is  impossible  to  say  that  it  discharged  them, 
unless  they  were  misled  by  some  conduct  of  the  plaintiffs  into  the 
belief  that  the  broker  had  already  settled  with  the  plaintiffs,  and 
made  such  payment  in  consequence  of  such  belief.  But  it  is  con- 
tended that  the  plaintiffs  here  did  mislead  the  defendants  into  such 
belief,  by  parting  with  the  possession  of  the  oil  to  Conning  without 
getting  the  money.  The  terms  of  the  contract  were  "  cash  on  or 
before  delivery,"  and  it  is  said  that  the  defendants  had  a  right  to 
suppose  that  the  sellers  would  not  deliver  unless  they  received  pay- 
ment of  the  price  at  the  time  of  delivery,  I  do  not  think,  however, 
that  that  is  a  correct  view  of  the  case.  The  plaintiffs  had  a  perfect 
right  to  part  with  the  oil  to  the  broker  without  insisting  strictly  upon 
their  right  to  prepayment,  and  there  is,  in  my  opinion,  nothing  in  the 
facts  of  the  case  to  justify  the  defendants  in  believing  that  they  would 
so  insist.  No  doubt,  if  there  was  an  invariable  custom  in  the  trade 
to  insist  on  prepayment  where  the  terms  of  the  contract  entitled  the 
seller  to  it,  that  might  alter  the  matter;  and  in  such  case  non- 
insistence  on  prepayment  might  discharge  the  buyer  if  he  paid  the 
broker  on  the  faith  of  the  seller  already  having  been  paid.  But  that 
is  not  the  case  here ;  the  evidence  before  Bowen,  J.,  shows  that  there 
is  no  invariable  custom  to  that  effect. 

Apart  from  all  authorities,  then,  I  am  of  opinion  that  the  de- 
fendants' contention  is  wrong,  and  upon  looking  at  the  authorities, 
I  do  not  think  that  any  of  them  are  in  direct  conflict  with  that 
opinion.  It  is  true  that  in  Thomson  v.  Davenport,  9  B.  &  C.  78, 
both  Lord  Tenterden  and  Bayley,  J.,  suggest  in  the  widest  terms 
that  a  seller  is  not  entitled  to  sue  the  undisclosed  principal  on  dis- 
covering him,  if  in  the  meantime  the  state  of  account  between  the 
principal  and  the  agent  has  been  altered  to  the  prejudice  of  the 
principal.  But  it  is  impossible  to  construe  the  dicta  of  those  learned 
judges  in  that  case  literally ;  it  would  operate  most  unjustly  to  the 
vendor  if  we  did.  I  think  the  judges  who  uttered  them  did  not 
intend  a  strictly  literal  interpretation  to  be  put  on  their  words. 
But  whether  they  did  or  no,  the  opinion  of  Park,  B.,  in  Heald  v. 
Kenworthy,  10  Exch.  739;  24  L.  J.  (Exch.)  76,  seems  to  me  pre- 
ferable ;  it  is  this,  that  "  If  the  conduct  of  the  seller  would  make  it 
unjust  for  him  to  call  upon  the  buyer  for  the  money,  as  for  example, 
where  the  principal  is  induced  by  the  conduct  of  the  seller  to  pay 
his  agent  the  money  on  the  faith  that  the  agent  and  seller  have  come 


396  LAING   V.   BUTLER.  [CHAP.   I. 

to  a  settlement  on  the  matter,  or  if  any  representation  to  that  effect 
is  made  by  the  seller,  either  by  words  or  conduct,  the  seller  cannot 
afterwards  throw  off  the  mask  and  sue  the  principal."  That  is  in 
my  judgment  a  much  more  accurate  statement  of  the  law.  But  then 
the  defendants  rely  on  the  case  of  Armstrong  v.  Stokes,  Law  Rep. 
7  Q.  B.  598.  Now  that  is  a  very  remarkable  case;  it  seems  to  have 
turned  in  some  measure  upon  the  peculiar  character  filled  by  Messrs. 
Ryder  as  commission  merchants.  The  court  seems  to  have  thought 
it  would  be  unreasonable  to  hold  that  Messrs.  Ryder  had  not  authority 
to  receive  the  money.  I  think  upon  the  facts  of  that  case  that  the 
agents  would  have  been  entitled  to  maintain  an  action  for  the  money 
against  the  defendant,  for  as  commission  merchants  they  were  not 
mere  agents  of  the  buyer.  Moreover  the  present  is  a  case  which 
Blackburn,  J.,  there  expressly  declines  to  decide.  He  expressly  draws 
a  distinction  between  a  case  in  which,  as  in  Armstrong  v.  Stokes, 
the  seller  at  the  time  of  the  sale  supposes  the  agent  to  be  himself  a 
principal,  and  gives  credit  to  him  alone,  and  one  in  which,  as  here, 
he  knows  that  the  person  with  whom  he  is  dealing  has  a  principal 
behind,  though  he  does  not  know  who  that  principal  is. 

It  is  to  my  mind  certainly  diflBcult  to  understand  that  distinction, 
or  to  see  how  the  mere  fact  of  the  vendor  knowing  or  not  knowing 
that  the  agent  has  a  principal  behind  can  affect  the  liability  of  that 
principal.  I  should  certainly  have  thought  that  his  liability  would 
depend  upon  what  he  himself  knew,  that  is  to  say,  whether  he  knew 
that  the  vendor  had  a  claim  against  him  and  would  look  to  him  for 
payment  in  the  agent's  default.  But  it  is  sufficient  here  that  the 
defendants  did  know  that  the  sellers  had  a  claim  against  them,  unless 
the  broker  had  already  paid  for  the  goods. 

In  this  view  of  the  case  it  is  unnecessary  to  consider  the  further 
question  raised  by  Mr.  Kennedy,  as  to  whether  a  payment  on  a  gen- 
eral running  account,  as  distinguished  from  a  payment  specifically 
appropriated  to  the  particular  purchase,  would  be  sufficient  to  bring 
the  case  within  Lord  Tenterden's  qualification  of  the  general  rule. 

(Baggallat  and  Beett,  L.  J  J.,  also  delivered  opinions  to  the 
same  effect.)  Appeal  dismissed. 


LAING   V.   BUTLER. 

37  Hun   (N.  Y.  S.  C.)    144.^     1885. 

Action  to  recover  the  price  of  certain  hides  sold  to  one  Smith, 
ostensibly  for  himself,  but  really  for  the  defendants  as  undisclosed 
principals.  Defendants  had  supplied  Smith  with  funds  for  the  pur- 
chase of  the  hides.    Judgment  for  plaintiff.     Defendants  appeal. 

>  Affirmed  in  108  N.  Y.  637,  no  opinion. 


CHAP.  X.]       same:   exception  based  on  election.  397 

Haight,  J,  (after  discussing  various  authorities*).  It  appears 
to  US  that  where  an  agent  buys  in  his  own  name,  but  for  the  benefit 
of  his  principal,  without  disclosing  the  name  of  the  principal,  the 
rule  is  that  the  principal  as  well  as  the  agent  will  be  bound,  provided 
the  goods  are  received  by  the  principal,  if  the  agent  in  making  the 
purchase  acted  within  his  power  as  agent ;  but  that  this  rule  is  sub- 
ject to  the  following  limitations  and  exceptions:  First.  The  pur- 
chase of  the  agent  must  be  within  the  power  conferred  upon  him  by 
his  principal,  or  it  must  be  shown  that  the  principal  has  subsequently 
ratified  his  acts;  Second.  If  the  principal  furnished  the  agent  with 
the  money  with  which  to  make  the  purchase  before  the  purchase,  and 
the  agent  should,  without  his  knowledge,  purchase  the  property  upon 
credit,  without  disclosing  his  principal,  that  the  principal  will  not 
be  bound;  and.  Third.  Where  the  purchase  has  been  made  by  the 
agent  upon  credit,  authorized  by  the  principal,  but  without  disclos- 
ing his  name,  and  payment  is  subsequently  made  by  the  principal  to 
the  agent  in  good  faith  before  the  agency  is  disclosed  to  the  seller, 
then  the  principal  would  not  be  liable.  In  the  case  under  considera- 
tion it  appears  that  the  defendants  authorized  Smith  to  purchase  the 
hides  for  them;  that  they  advanced  the  money  to  him  with  which 
to  make  the  purchases  they  had  authorized.  The  plaintiff,  in  sell- 
ing the  hides  to  Smith,  sold  to  him  upon  his  individual  credit  and 
promise  to  pay.  The  case  therefore  appears  to  us  to  be  within  the 
exceptions  to  the  rule  mentioned,  and  it  consequently  follows  that 
the  plaintiff  is  not  entitled  to  recover. 

Judgment  reversed  and  a  new  trial  ordered.* 


3.    Same:  Exception  Based  on  Election. 

BEYMER   V.   BONSALL. 
79  Pa.  St.  298.     1875. 

Assumpsit  for  breach  of  contract  to  deliver  a  quantity  of  petro- 
leum. Judgment  for  plaintiff.    Defendant  brings  error. 

»  Dunlap's  Paley  on  Agency,  pp.  245-250 ;  Story  on  Agency,  S  291 ;  1  Parsons  on 
Cont.  p.  e.S ;  Armstrong  v.  Stokes,  L.  R.  7  Q.  B.  598 ;  Irvine  v.  Watson,  L.  R.  5 
Q.  B.  D.  102,  414 :  Davison  v.  Donaldson,  L.  R.  9  Q.  B.  D.  623 :  Clealand  v.  Walker, 
11  Ala.  1058 :  Komorowskl  v.  Krundlck,  56  Wis.  23 ;  Taft  «.  Baker,  100  Mass.  68 ; 
Fish  V.  Wood,  4  E.  D.  Smith,  327  :  Jaques  v.  Todd,  3  Wend.  83-94 ;  McCuIlough  v. 
Thompson,  45  N.  Y.  Super  Ct.  449 ;  Knapp  v.  Simon,  96  N.  Y.  284-288. 

*  "  It  Is  probably  too  late  to  consider  the  questions  thus  suggested  upon  principle ; 
and  It  may  be  accepted  as  law  that  the  seller,  under  the  circumstances  of  a  case  like 
the  present,  upon  discovery  of  the  principal,  can  resort  to  and  recover  of  him.  If 
he  [the  principal]  has  not  honA  fide  paid  the  agent  In  the  meantime,  or  has  not 
made  such  a  change  In  the  state  of  the  account  between  the  agent  and  himself  that 
he  would  suffer  loss  If  he  should  be  compelled  to  pay  the  seller.  Story  on  Agency, 
I  291  ;  1  Parsons  on  Cont.  63 :  Fish  v.  Wood,  4  E.  D.  Smith,  327 :  Thomas  v.  Atkin- 
son, 38  Ind.  248;  Clealand  v.  Walker,  11  Ala.  1058;  McCuUough  v.  Thompson,  45 
N.  Y.  Super  Ct.  449 ;  Laing  v.  Butler,  37  Hun,  144."   Fradley  v.  Hyland,  37  Fed.  49. 


398  KINGSLEY   V.   DAVIS.  [CHAP.    X. 

Plaintiff  made  the  contract  with  brokers  who  were  acting  for 
defendant  as  undisclosed  principal.  The  defendant  was  not  a  party 
to  the  original  agreement,  but  the  brokers  (his  agents)  gave  him 
notice  of  it  on  the  day  it  was  made,  and  he  accepted  the  liability  as 
his  own.  The  demand  for  the  petroleum  was  made  on  both  the 
defendant  and  his  brokers.^  Plaintiff  brought  an  action  against  the 
brokers,  and  had  judgment  against  them.  Defendant  pleaded  this 
judgment,  and  plaintiff  demurred  to  the  plea.  The  court  reserved 
the  point,  and  entered  judgment  upon  the  verdict  of  the  jury. 

Per  Curiam.  Undoubtedly  an  agent  who  makes  a  contract  in  his 
own  name  without  disclosing  his  agency  is  liable  to  the  other  party. 
The  latter  acts  upon  his  credit,  and  is  not  bound  to  yield  up  his  right 
to  hold  the  former  personally,  merely  because  he  discloses  a  principal 
who  is  also  liable.  The  principal  is  liable  because  the  contract  was 
for  his  benefit,  and  the  agent  is  benefited  by  his  being  presumedly 
the  creditor,  for  there  can  be  but  one  satisfaction.  But  it  does  not 
follow  that  the  agent  can  afterwards  discharge  himself  by  putting 
the  creditor  to  his  election.  Being  already  liable  by  his  contract,  he 
can  be  discharged  only  by  satisfaction  of  it,  by  himself  or  another. 
So  the  principal  has  no  right  to  compel  the  creditor  to  elect  his 
action,  or  to  discharge  either  himself  or  his  agent,  but  can  defend 
his  agent  only  by  making  satisfaction  for  him.  We  think  no  error 
was  committed  by  the  court  below,  except  in  the  form  of  the  reserva- 
tion. Judgment  should  have  been  given  directly  on  the  demurrer 
itself,  and  not  by  way  of  a  reserved  point  upon  it.  This,  however, 
is  not  a  substantial  error,  and  judgment  may  be  treated  as  entered 
upon  the  demurrer.  Judgment  affirmed. 


KINGSLEY   V.    DAVIS. 

104  Mass.  178.     1870. 

Contract,  by  brokers  for  commissions.  Submitted  to  the  court 
upon  agreed  facts. 

Plaintiffs  supposed  they  were  acting  for  John  J.  Davis,  whereas  in 
fact  the  property  sold  by  them  belonged  to  his  wife,  the  defendant. 
After  learning  this  fact  plaintiffs  had  taken  judgment  against  John 
J.  Davis,  and  had  issued  an  execution  upon  it;  but  the  judgment 
remained  unsatisfied. 

Morton,  J.  .  .  .  But  the  true  inference  to  be  drawn  from  the 
facts  stated  undoubtedly  is,  that  the  plaintiffs  contracted  with,  and 
gave  credit  to,  John  J.  Davis ;  and  they  now  claim  that  he  was  acting 

*  The  facts  In  this  and  the  preceding  sentence  do  not  appear  In  the  original 
report,  but  are  given  in  the  case  as  reported  in  The  Law  and  Equity  Reporter, 
Tol.  1,  p.  75. 


CHAP,  X.]       same:   exception  based  on  election.  399 

as  the  agent  of  the  defendant,  and  that  they  gave  him  credit  in 
ignorance  of  this  fact.  If  we  assume  that  he  was  acting  as  her  agent 
in  contracting  with  the  plaintiffs,  yet  there  is  an  insuperable  obstacle 
to  their  right  to  maintain  this  action.  The  general  principle  is 
undisputed,  that,  when  a  person  contracts  with  another  who  is  in  fact 
an  agent  of  an  undisclosed  principal,  he  may,  upon  discovery  of  the 
principal,  resort  to  him,  or  to  the  agent  with  whom  he  dealt,  at  his 
election.  But  if,  after  having  come  to  a  knowledge  of  all  the  facts, 
he  elects  to  hold  the  agent,  he  cannot  afterwards  resort  to  the  prin- 
cipal. In  the  case  at  bar,  it  is  admitted  that  the  plaintiffs,  after  all 
the  facts  became  known  to  them,  obtained  a  judgment  against  John 
J.  Davis  upon  the  same  cause  of  action  for  which  this  suit  is  brought. 
We  are  of  opinion  that  this  was  conclusive  evidence  of  an  election 
to  resort  to  the  agent,  to  whom  the  credit  was  originally  given,  and 
is  a  bar  to  this  action  against  the  principal.  Raymond  v.  Crown  & 
Eagle  Mills,  2  Met.  319.  Judgment  for  the  defendant. 


LINDQUIST   V.   DICKSON". 

107  N.  W.  (Minn.)  958.     1906. 

Start,  C.  J.  Action  to  recover  from  the  defendant,  as  an  undis- 
closed  principal,  for  labor  and  material  performed  and  furnished 
by  the  plaintiff  in  decorating  and  repairing  her  house,  pursuant  to 
an  alleged  contract  made  for  her  by  her  husband,  Joseph  M.  Dickson. 
The  complaint  alleged,  in  effect,  that  at  the  time  the  contract  was 
entered  into  with  the  husband  he  was  in  fact  acting  as  agent  for  his 
wife,  the  defendant,  but  he  failed  to  disclose  to  the  plaintiff  the  fact 
of  such  agency,  or  the  fact  that  she  was  the  real  party  in  interest  and 
owned  the  house,  the  decorating  and  improvement  of  which  was  the 
subject-matter  of  the  contract;  that  the  plaintiff  performed  the  con- 
tract on  his  part;  that  he  was  not  paid  therefor;  and  that  he  com- 
menced an  action  against  the  husband  to  recover  the  balance  due 
him  on  the  contract,  and  on  August  29,  1904,  he  recovered  judgment 
against  him  for  the  sum  of  $273.68,  no  part  of  which  has  been  paid; 
and  further  that  thereafter  (in  the  month  of  October,  1904)  the 
plaintiff  learned  for  the  first  time  that  the  defendant  was  the  real 
party  in  interest,  and  that  the  contract  was  made  for  her  by  her 
husband  as  her  agent.  This  action  was  commenced  in  the  month 
of  June,  1905.  The  defendant  by  her  answer  denied  that  she  ever 
made  the  contract  alleged  in  the  complaint,  and  alleged  as  a  defence 
the  recovery  of  a  judgment  by  the  plaintiff  against  her  husband, 
Joseph  M.  Dickson.  The  trial  resulted  in  a  verdict  in  favor  of  the 
plaintiff  for  the  amount  stated,  and  the  defendant  appealed  from  an 
order  denying  her  motion  for  a  new  trial.  .  ,  . 


400  LINDQUIST  V.   DICKSON.  [CHAP.   X. 

It  is  the  contention  of  the  defendant  that  such  judgment  is  a  bar 
to  this  action.  The  general  rule  is  that,  where  a  simple  contract,  by 
parol  or  writing,  is  made  by  an  authorized  agent  without  disclosing 
his  principal,  and  the  other  contracting  party  subsequently  discovers 
the  real  party,  he  may  abandon  his  right  to  look  to  the  agent  per- 
sonally and  resort  to  the  principal.  Lindeke  Land  Co.  v.  Levy, 
76  Minn.  364,  79  N.  W.  314,  But  whether  the  creditor  can  proceed 
against  the  undiscovered  principal  after  he  has  obtained  a  judgment 
on  his  claim  against  the  agent  is  a  question  as  to  which  the  adjudged 
cases  are  conflicting.  In  the  case  of  Kingsley  v.  Davis,  104  Mass. 
178,  the  creditor,  after  being  fully  informed  that  the  party  with 
whom  he  made  the  contract  was  acting  for  an  undiscovered  prin- 
cipal, brought  an  action  against  the  agent  and  recovered  judgment 
for  his  claim.  Afterwards  he  brought  an  action  against  the  prin- 
cipal to  recover  for  the  same  claim,  and  the  court  held  that  the  action 
against  the  principal  could  not  be  maintained  for  the  reason  that: 
*'  The  general  principle  is  undisputed  that,  when  a  person  contracts 
with  another  who  is  in  fact  an  agent  of  an  undiscovered  principal, 
he  may  upon  the  discovery  of  the  principal  resort  to  him  or  to  the 
agent  with  whom  he  dealt  at  his  election.  But  if,  after  having  come 
to  a  knowledge  of  all  the  facts,  he  elects  to  hold  the  agent,  he  cannot 
resort  to  the  principal."  In  Beymer  v.  Bonsall,  79  Pa.  298,  it  was 
held  that  nothing  short  of  satisfaction  of  the  judgment  against  the 
agent  would  discharge  the  principal.  The  case  of  Kingsley  v.  Davis 
suggests  the  true  basis  for  solving  the  question.  It  is  a  question  of 
election.  Election  implies  full  knowledge  of  the  facts  necessary  to 
enable  a  party  to  make  an  intelligent  and  deliberate  choice.  Peder- 
son  V.  Christofferson,  97  Minn.  491.  We  therefore  hold  upon  prin- 
ciple, and  what  seems  to  be  the  weight  of  judicial  opinion,  that: 
If  a  person  contracts  with  another,  who  is  in  fact  an  agent  of  an 
undisclosed  principal,  and,  after  learning  all  the  facts,  brings  an 
action  on  the  contract  and  recovers  judgment  against  the  agent,  such 
judgment  will  be  a  bar  to  an  action  against  the  principal.  But  an 
unsatisfied  judgment  against  the  agent  is  not  a  bar  to  an  action 
against  the  undiscovered  principal  when  discovered,  if  the  plaintiff 
was  ignorant  of  the  facts  as  to  the  agency  when  he  prosecuted  his 
action  against  the  agent.  Kingsley  v.  Davis,  104  Mass.  178;  Steel- 
Smith  Grocery  Co.  v.  Potthast,  109  Iowa,  413,  80  N.  W.  517; 
Coleman  v.  Bank,  53  N".  Y.  388 ;  Wharton  on  Agency,  §  472 ;  1  Enc. 
of  Law,  1139 ;  Mechem  on  Agency,  §  699.  .  .  .  Order  affirmed.^ 

^  Accord :  Qreenburg  v.  Palmieri,  71  N.  J.  L.  83. 


CHAP.  X.]       same:   exception  based  on  election.  401 

BROWN   V.   REIMAN. 
48  N.  Y.  App.  Div.  295.     1900. 

Appeal  by  the  defendant,  David  F.  Reiman,  from  a  judgment  of 
the  Municipal  Court  of  Buffalo  in  favor  of  the  plaintiffs,  rendered 
upon  the  decision  of  the  court. 

Adams,  P.  J.  The  plaintiffs  bring  this  action  to  recover  the  pur- 
chase price  of  two  sealskin  garments  which  it  is  contended  were 
purchased  of  the  plaintiffs  by  the  defendant's  daughters  and  duly 
authorized  agents. 

Upon  the  trial  the  plaintiffs'  right  to  recover  was  sharply  con- 
tested upon  the  ground,  among  others,  that  the  garments  were  not 
of  the  quality  and  character  guaranteed  by  the  plaintiffs  when  the 
contract  for  their  manufacture  was  entered  into.  That  issue,  how- 
ever, was  decided  adversely  to  the  defendant's  contention  upon  con- 
flicting evidence,  and  for  that  reason,  probably,  it  has  been  aban- 
doned upon  this  review.  It  is  urged,  nevertheless,  that  the  plaintiffs' 
judgment  should  be  reversed,  and  the  principal  reasons  assigned  for 
this  contention  are:  (1)  That  the  evidence  fails  to  show  that  at  the 
time  the  garments  were  ordered  the  relation  of  principal  and  agent 
existed  between  the  defendant  and  his  daughters;  and  (2)  that  the 
plaintiffs,  having  elected  to  treat  the  daughters  as  principals,  cannot 
now  be  permitted  to  claim  that  they  were  not  such  in  fact. 

It  is  not  denied  that  the  plaintiffs,  in  the  first  instance,  negotiated 
with  and  gave  credit  to  the  daughters  in  their  individual  capacity, 
nor  that  they  subsequently  brought  suit  and  obtained  a  judgment 
against  each  of  them,  and  made  diligent  effort  to  collect  the  same. 
Neither  is  it  claimed  that  the  defendant's  liability  grows  out  of  any 
parental  obligation,  for,  although  his  daughters  lived  with  and  were 
supported  by  him,  it  is  conceded  that  they  were  both  of  full  age,  to 
the  knowledge  of  the  plaintiffs  at  the  time  when  the  garments  were 
purchased;  but  this  action  is  sought  to  be  maintained  upon  the 
theory  that  the  purchase  of  the  garments  in  question  was  expressly 
authorized  by  the  father,  which  fact  was  not  discovered  by  the 
plaintiffs  until  after  they  had  exhausted  their  remedy  against  the 
daughters. 

It  seems  that  Mrs.  Brown,  one  of  the  plaintiffs,  had  some  acquaint- 
ance with  the  defendant  and  his  daughters.  At  least  she  knew  that 
they  were  reputed  to  be  people  of  some  considerable  means,  and 
during  the  preliminary  negotiations  which  led  up  to  the  ordering 
of  the  garments  one  of  the  daughters  informed  her  that  the  father 
had  told  her  and  her  sister  that  if  they  would  select  two  sealskin  coats 
which  suited  them,  he  would  give  his  check  for  the  cost  thereof. 
The  information  thus  imparted  to  the  plaintiffs  was  not  necessarily 

26 


402  BROWN   V.   BEIMAN.  [CHAP.   X. 

of  such  character  as  to  warrant  them  in  assuming  that  the  daughters 
were  authorized  to  purchase  the  coats  upon  the  credit  of  their  father ; 
for  it  was,  at  the  most,  but  the  declaration  of  a  third  party,  and  as 
such  was  not  binding  upon  the  alleged  principal.  The  plaintiffs, 
i  onsequently,  treated  the  daughters  as  their  debtors,  and,  when  the 
latter  refused  to  pay  for  the  coats,  brought  two  separate  actions, 
which,  after  a  trial  in  the  Municipal  Court,  resulted,  as  before  stated, 
in  favor  of  the  plaintiffs.  In  the  meantime,  each  of  the  young 
women  had  affixed  her  name,  by  means  of  paint  or  some  other 
indelible  substance,  in  four  or  five  different  places,  to  the  inside  of 
the  coats,  and  had  worn  the  garments  on  several  occasions;  but 
becoming  dissatisfied  with  the  quality  or  workmanship  thereof,  they 
returned,  or  offered  to  return,  the  same  to  the  plaintiffs.  When, 
however,  it  became  probable  that  the  actions  were  likely  to  result 
adversely  to  them,  the  daughters  obtained  possession  of  the  coats 
and,  by  the  procurement  or  advice  of  the  defendant,  sold  them  to 
certain  relatives  for  fifty  dollars  each,  and  with  the  money  thus 
obtained  they  immediately  commenced  proceedings  in  the  bank- 
ruptcy court  to  relieve  themselves  from  the  payment  of  the  judg- 
ments obtained  -against  them  by  the  plaintiffs,  which  constituted 
their  entire  indebtedness.  During  the  progress  of  the  bankruptcy 
proceedings  the  defendant  was  sworn  as  a  witness  and  testified  that 
he  told  his  daughters  that  they  might  have  their  coats  made  by  the 
plaintiffs,  provided  the  latter  would  give  a  written  guarantee  for  the 
best  of  seal,  the  best  of  workmanship,  and  the  best  lining,  but  that 
he  was  subsequently  informed  that  Mrs.  Brown  said  no  contract  was 
necessary.  One  of  the  daughters  also  testified  that  after  she  and  her 
sister  had  ordered  their  coats,  her  father  gave  her  a  blank  check 
with  which  to  pay  for  them,  saying  that  as  he  might  not  be  at  home 
when  the  coats  were  satisfactory,  he  would  leave  it  to  her  to  use 
her  own  judgment  in  regard  to  them. 

This  evidence,  which  was  read  upon  the  trial  of  the  present  action, 
when  taken  in  connection  with  the  defendant's  subsequent  acts 
and  declarations,  was  sufficient,  we  think,  to  sustain  the  conclusion 
reached  by  the  trial  court,  that  not  only  had  the  defendant  authorized 
his  daughters  to  purchase  the  garments  in  question,  but  that  he 
had  ratified  their  action  after  learning  that  the  purchase  had  been 
made,  and  that  his  instructions  had  not  been  literally  followed. 
(Bliss  V.  Sherrill,  24  App.  Div.  280;  Bliven  v.  Lydecker,  130 
N.  Y.  102.) 

This  being  the  case,  the  relation  of  principal  and  agent  becomes 
established;  and  when  it  is  further  made  to  appear,  as  it  is  by  the 
plaintiffs'  testimony,  that  the  existence  of  this  relation  was  not  fully 
disclosed  until  after  the  commencement  of  the  bankruptcy  pro- 
ceedings, it  cannot  be  said  that  the  plaintiffs  have  elected  to  rely 
Bolely  upon  the  responsibility  of  the  agents,  nor  that  they  were  con- 


CHAP.  X.]       same:    exception  based  on  election.  403 

eluded  by  reason  of  the  actions  which  were  brought  against  such 
agents  from  pursuing  the  principal  when  his  existence  became 
known;  for  it  is  a  well-settled  rule  that  a  creditor  cannot  make  an 
election  either  of  remedies  or  parties  without  first  realizing  that  the 
opportunity  of  exercising  his  preference  is  afforded  him.  (Eemmel 
V.  Townsend,  83  Hun,  353 ;  Coleman  v.  First  Nat.  Bank  of  Elmira, 
53  N.  Y.  388;  Kayton  v.  Barnett,  116  id.  625.) 

The  views  above  expressed  lead  to  the  conclusion  that  the  judg- 
ment appealed  from  should  be  aflfirmed. 

All  concurred.  Judgment  affirmed,  with  costs. 


E.   J.    CODD   COMPANY   v.    PARKER. 
97  Md.  319.     1903. 

Fowler,  J.,  delivered  the  opinion  of  the  court. 

This  is  a  suit  by  the  E.  J.  Codd  Company  of  Baltimore  City  on 
an  open  account  against  Walter  W.  Parker.  .  .  . 

The  question  is  whether  having  sued  the  principal  and  recovered 
judgment,  the  plaintiff  can  now  sue  the  defendant  who  was  the 
agent. 

It  was  said  in  Henderson  v.  Mayhew,  2  Gill,  408,  that  if  the 
principal  be  not  known  at  the  time  of  the  sale,  when  he  is  discovered 
either  he  or  the  agent  may  be  sued  at  the  election  of  the  vendor. 
Mayhew  v.  Graham,  4  Gill,  363.  And  the  general  principle  appears 
to  be  established  that  where  an  agent  contracts  in  his  own  name, 
without  disclosing  his  interest,  though  in  fact  for  the  exclusive 
benefit  of  another  person,  who  is  afterwards  discovered,  the  creditor 
may  sue  either,  but  after  he  has  elected  whom  to  sue  and  has  sued 
either  the  agent  or  the  principal  to  final  judgment,  he  cannot  after 
that  sue  the  other,  whether  the  first  suit  has  been  successful  or  not. 
Poe  PL,  §  378;  Priestly  v.  Fernie,  3  Hurlstone  &  C,  977;  Curtis 
V.  Williamson,  L.  R.,  10  Q.  B.  57;  Fowler  v.  Bowery  Sav.  Bk., 
113  N.  Y.  450;  Loge  v.  Weinstein,  35  Misc,  Rep.  298.  There  are 
exceptions  to  this  general  rule,  but  the  facts  here  involved  do  not 
require  us  to  consider  them.  .  .  .  Judgment  affirmed. 


BARRELL   v.   NEWBY. 

127  Fed.  (C.  C.  A.)  656.     1904. 

Action  against  defendant  to  recover  money  advanced  by  plain- 
tiffs as  brokers  in  a  stock  transaction.     The  answer  alleged  facts 


404  BARRELL   V.   NEWBY.  [CHAP.   X. 

tending  to  establish  that  plaintiff  had  elected  to  hold  defendant's 
agent.    A  demurrer  to  the  answer  was  overruled. 

The  answer  alleged  in  substance  that  plaintiffs,  brokers  in  New 
York,  were  directed  on  May  7,  1901,  by  one  Todd,  a  broker  in 
Indianapolis,  to  sell  short  100  shares  of  Northern  Pacific  Railway 
stock  at  $145  a  share;  that  plaintiffs  sold  the  stock  as  directed  and 
according  to  custom  borrowed  the  stock  for  delivery;  that  the  stock 
rose  rapidly  and  plaintiffs  on  May  9th  were  obliged  to  pay  $700 
a  share  for  stock  with  which  to  replace  the  borrowed  stock,  and  that 
the  total  loss  upon  the  transaction  was  about  $55,000;  that  on 
May  10th  Todd  informed  plaintiffs  that  he  was  acting  for  defendant, 
who  had  placed  the  order  with  Todd;  that  thereafter  plaintiffs  sued 
Todd  in  Illinois  and  garnished  a  debt  there  due  to  him,  and  also  sued 
Todd  in  New  York  and  attached  a  debt  there  due  him,  and  that  they 
also  applied  toward  this  claim  a  sum  of  money  in  their  hands  due 
to  Todd. 

Before  Jenkins,  Grosscup,  and  Baker,  C.  J. 

Baker,  C.  J.  Plaintiffs  question  the  adequacy  of  the  allegations 
of  their  knowledge  of  defendant's  principalship  before  they  took  steps 
against  Todd;  but  we  think  the  answer  avers  their  knowledge  with 
sufficient  certainty. 

What  were  plaintiffs'  rights  when  on  May  10th,  after  having  exe- 
cuted Todd's  order  of  May  7th,  and  incurred  the  loss  by  reason 
thereof,  they  learned  that  defendant  was  principal? 

If  a  merchant  parts  with  his  goods  to  one  whom  he  knows  to  be 
an  agent,  fails  to  require  a  disclosure  of  the  principal,  and  charges 
the  account  to  the  agent,  ordinarily  the  question  might  be  raised 
whether  the  merchant  has  not  deliberately  chosen  the  agent  for  his 
debtor,  and  thereby  precluded  himself  from  afterwards  pursuing 
the  principal.  Patapsco  Ins.  Co.  v.  Smith,  6  Har.  &  J.  (Md.)  166, 
14  Am.  Dec.  268;  Ins.  Co.  of  Pa.  v.  Smith,  3  Whart.  520.  But  the 
ninth  averment  of  the  answer,  to  the  effect  that,  though  plaintiffs 
knew  Todd  was  acting  as  an  agent  for  an  undisclosed  principal,  the 
custom  of  the  trade  authorized  them  to  look  to  him  in  the  first 
instance,  prevents  defendant  from  claiming  that  the  suggested  ques- 
tion is  available  here,  and  leaves  plaintiffs  in  a  position  as  advan- 
tageous as  that  of  a  merchant  who  sells  on  credit  in  the  belief  that 
the  purchaser  is  acting  for  himself. 

Plaintiffs'  contention  is  that  such  a  seller,  on  discovering  the  prin- 
cipal, is  never  required  to  elect  whom  he  will  consider  his  debtor; 
that  he  has  concurrent  rights  of  action  against  both;  and  that 
nothing  short  of  a  satisfaction  by  one,  or  at  least  a  judgment  against 
one  (according  to  English  cases,  which  seem  to  be  based  on  the 
English  rulings  that  a  judgment  against  one  joint  tort  feasor  is  a 
satisfaction  as  to  all),  will  exhaust  his  right  to  pursue  the  other. 


CHAP.  X.]       same:   exception  based  on  election.  .  405 

In  support  of  this  proposition,  and  of  collateral  arguments,  plaintiffs 
adduce  many  cases.^ 

On  the  other  hand,  defendant  insists  that  such  a  seller,  on  discov- 
ering the  principal,  may  take  a  reasonable  time  to  investigate  and 
compare  the  standings  of  principal  and  agent,  and  thereupon  must 
choose  whom  he  will  hold  as  his  debtor  and  abandon  his  right  to 
choose  the  other ;  and  that  he  cannot  hold  both.  And  defendant  cites 
numerous  authorities  as  a  basis  for  his  argument.* 

If  Todd,  when  placing  the  order  with  plaintiffs,  had  informed 
them  that  he  was  simply  acting  as  agent  for  defendant,  plaintiffs 
could  have  accepted  the  order  as  defendant's,  and  Todd  would  have 
incurred  no  liability;  or  they  could  have  refused  to  take  defendant 
as  their  debtor,  and  have  informed  Todd  that  they  would  look  to  him, 
and,  if  Todd  had  made  no  objection,  he  would  have  been  bound  and 
defendant  not ;  but,  in  dealing  with  the  agent  of  a  disclosed  principal, 
they  could  not  have  held  both  without  an  agreement  to  that  effect. 
It  is  true  that  plaintiffs  could  have  declined  to  take  the  order  except 
on  the  joint  and  several  contract  of  Todd  and  defendant;  but  there 
is  no  pretense  of  such  a  contract,  for  the  averment  of  the  complaint, 
is  that  they  accepted  and  acted  on  defendant's  order;  and  the  bare 
transaction  of  a  merchant's  selling  to  the  agent  of  a  known  principal 
does  not  establish  a  joint  and  several,  or  several  liability  of  agent  and 
principal,  but  evidences  only  one  contract,  one  liability,  one  credit, 
one  debtor,  whose  identity  is  determined  by  the  seller's  election, 
which  he  must  make  at  the  time. 

Respecting  election,  what  difference  in  reason  does  it  make  whether 
the  seller  ascertains  the  identity  of  the  principal  before  he  delivers 
the  goods  and  extends  the  credit,  or  after  delivery  but  before  he 
seeks  to  exact  payment?  In  the  first  case,  we  understand  plaintiffs 
to  agree  that  the  seller  must  elect.  In  the  second,  the  seller  mani- 
festly has  passed  on  the  credit  of  but  a  single  person.  If,  before 
payment,  he  finds  out  who  the  principal  is,  it  is  just  that  he  should 
be  able  to  hold  the  agent,  for  the  agent  offered  his  own  credit  and  it 

'  The  following  are  most  strongly  relied  on :  Youghlogheny  Iron  Co.  v.  Smith, 
66  Pa.  340 ;  Conro  v.  Port  Henry  Iron  Co.,  12  Barb.  53 ;  Beymer  v.  Bonsall,  79  Pa. 
298;  Maple  v.  Rid.  Co.,  40  Ohio  St.  313:  Cobb  i\  Knapp,  71  N.  Y.  348;  Knapp  v. 
Simon,  96  N.  Y.  284 ;  American  Trading  Co.  v.  Thomas  Wilson's  Sons  &  Co.,  37 
Misc.  (N.  Y.)  76;  McLean  v.  Sexton,  44  N.  Y.  App.  Div.  520;  Irvine  v.  Watson, 
L.  R.,  5  Q.  B.  D.  414  ;  Barker  v.  Garvey,  83  111.  184 ;  Mattiage  v.  Poole,  15  Hun. 
556 ;  Baltimore,  etc.,  Tel.  Co.  v.  Interstate  Tel.  Co.,  54  Fed.  50 ;  First  National 
Bank  v.  Wallls,  84  Hun,  376. 

»  Tnthlll  V.  Wilson,  90  N.  Y.  423  ;  Ranger  v.  Thalmann,  84  App.  Div.  341,  affirmed 
178  N.  Y.  574;  Cook  on  Corporations  (4th  ed.)  {  454;  Paley -on  Agency,  pp.  246, 
247  ;  Paterson  v.  (landasequi,  15  East,  62  ;  Addison  v.  Gandasequl,  4  Taunton,  573  ; 
Thomas  r.  Davenport.  9  B.  &  C.  78 ;  Ford  v.  Williams.  21  How.  287  ;  Insurance  Co. 
of  Pennsylvania  v.  Smith,  3  Whart.  520 ;  Patapsco  Insurance  Co.  v.  Smith  et  al., 
fi  Tlar.  &  J.  (Md.)  166  ;  French  v.  Price,  24  Pick.  13  ;  Raymond  et  al.  v.  Proprietors 
of  Crown  &  Eagle  Mills.  2  Mete.  319 ;  Paige  v.  Stone  et  al.,  10  Mete.  160 ;  Silver 
et  al.  V.  Jordan  et  al.,  136  Mass.  319 ;  Meeker  v.  Claghorn,  44  N.  Y.  349 ;  Perth 
Amboy  Man.  Co.  r.  Condit  et  al.,  21  N.  J.  Law,  659 ;  Borcherling  v.  Katz,  37  N.  J. 
Eq.  150 ;  Elliott  v.  Bodlne,  59  N.  J.  Law,  567 ;  Fowler,  Extr.,  v.  Bow<ery  Sav.  Bank, 
lia  N.  Y.  450 ;  McLean  v.  Ficke  et  al.,  94  Iowa,  283  ;  Mechem  on  Agency,  §§  695-698. 


406  BAKRELL   V.    NEWBY.  [CHAP.    X. 

was  accepted.  It  is  also  just  that  the  seller  should  be  permitted 
to  abandon  the  right  that  he  had  in  the  first  instance  to  pursue  the 
agent,  and  to  hold  the  principal,  for  the  contract  of  purchase  was  in 
reality  the  principal's.  When,  after  delivery,  but  before  seeking  to 
exact  payment,  the  seller  learns  the  identity  of  the  principal,  he  has 
an  opportunity  for  investigating  and  comparing  the  standings  of 
agent  and  principal,  just  as  he  would  have  had  if  he  had  known  the 
principal  before  delivery.  We  apprehend  no  rule  of  law  that  war- 
rants the  conclusion  that  the  seller  must  elect  in  the  one  case  and 
not  in  the  other.  We  perceive  no  solid  reason  why  the  law,  in  behalf 
of  the  seller,  who  in  both  cases  has  really  contemplated  and  con- 
tracted for  a  single  credit  only,  should  in  the  one  case  more  than  the 
other  create  a  contract  under  which  the  agent  and  principal  stand  as 
joint  and  several,  or  several,  obligors.  The  decision  in  BejTner  v. 
Bonsall,  79  Pa.  298,  and  expressions  in  some  other  cases,  to  the  effect 
that  one  who  sells  to  the  agent  of  an  undisclosed  principal  may,  on 
discovery  of  the  principal,  pursue  either  or  both  until  he  has  obtained 
satisfaction  (as  though  they  were  joint  tort  feasors),  do  not  meet 
our  approval. 

Objection  is  made  to  the  answer  on  the  ground  that  the  issue  of 
election  or  no  election  is  one  that  must  be  determined  by  the  jury 
from  the  evidence  and  the  instructions  of  the  court.  If  it  were  per- 
missible for  a  defendant  to  tender  the  issue  by  the  naked  averment 
that  plaintiff  elected  to  hold  the  contract  as  the  agent's,  and  if,  under 
such  an  answer,  the  uncontradicted  evidence  established  acts  of  the 
plaintiff  from  which  but  one  conclusion  could  legally  be  deduced, 
then  the  court  would  have  the  right  to  direct  the  verdict ;  and,  if  the 
same  acts  be  set  forth  in  an  answer  and  confessed,  we  think  the  court 
may  likewise  draw  the  conclusion.* 

Do  plaintiffs'  acts  constitute  an  election?  In  two  instances  plain- 
tiffs procured  conditional  executions  in  advance  on  their  solemn 
declaration  to  the  courts  that  the  broken  contract  was  Todd's  —  not 
Todd's  and  the  defendant's,  but  Todd's.  In  another  instance  plain- 
tiffs acted  as  court  and  sheriff,  and  turned  Todd's  money  into  their 
own  till.  Now  they  declare  with  equal  solemnity  that  the  same  broken 
contract  was  defendant's  —  not  defendant's  and  Todd's,  but  de- 
fendant's. We  do  not  mean  to  assert  that  the  mere  bringing  of  an 
action  against  Todd  would  be  inconsistent  with  their  proceeding 
later  against  defendant.  If  the  action  were  begun  before  they  learned 
of  defendant's  principalship,  certainly  they  should  be  permitted  to 
dismiss,  and  sue  defendant.  And  if  they  proceeded  against  Todd  by 
reason  of  mistake  or  fraud  or  the  like,  they  might  seek  relief  from 

»  See  Emery's  Sons  v.  Traders'  Bank  (Ky.)  6  S.  W.  582;  Curtis  v.  Williamson. 
L.  R.  10  Q.  B.  57  ;  Sessions  v.  Block,  40  Mo.  App.  569 ;  Kingsley  v.  Davis,  104 
Mass.  178;  Bauman  v.  Jaflfray  (Tex.  Civ.  App.),  26  S.  W.  260;  Booth  v.  Barron, 
29  N.  Y.  App.  Dlv.  66 ;  Stuart  v.  Hayden,  72  Fed.  402,  18  C.  C.  A.  618 ;  SllTer 
V.  Jordan,  136  Mass.  319. 


CHAP.  X.]       same:   exception  based  on  election.  407 

their  act,  give  up  the  chase  they  had  entered  upon,  and  return  to  the 
cross-roads.  But  here,  under  no  misapprehension  of  comparative 
standings,  but  with  full  knowledge  of  the  whole  truth  of  the  situation* 
plaintiffs  not  merely  seized  Todd's  money  on  the  basis  that  the  con- 
tract was  his,  but  they  insist  upon  their  right  to  retain  it,  and  to  say 
that  the  contract  is  Todd's,  throughout  the  time  in  which  they  assert 
that  the  contract  is  defendant's.  To  our  minds  but  one  interpretation 
can  be  given  to  this  conduct. 

PlaintifiFs  urge  that,  inasmuch  as  the  answer  fails  to  aver  that  de- 
fendant settled  with  Todd  before  they  sued  defendant,  it  would  be  no 
hardship  to  require  defendant  to  pay  them.  It  seems  to  us  that  plain- 
tiffs are  confusing  election  with  equitable  estoppel.  Election,  whether 
of  remedies  or  of  defendants,^  has  no  regard  to  the  situation  of  the 
defendant,  but  is  founded  on  a  public  policy  that  forbids  a  plaintiff 
to  trifle  with  the  courts.  Equitable  estoppel,  on  the  other  hand,  grows 
out  of  consideration  of  the  defendant's  state.  They  are  distinct 
defences,  and  he  who  pleads  election  need  not  show  that  it  would  be 
inequitable  to  permit  the  plaintiff  to  recover ;  it  is  enough  if  he  shows 
that  the  plaintiff,  having  by  law  the  right  to  take  either  of  two 
courses,  has  taken  and  holds  to  the  one  that  leads  away  from  him. 

The  judgment,  is  affirmed. 


BROWN"   V.   TAINTER   and   LANPHER. 

114  N.  Y.  App.  Div.  446.     1906. 

Action  to  recover  against  defendant  Lanpher,  as  undisclosed 
principal,  for  a  loan  of  money  to  defendant  Tainter,  who  gave  plain- 
tiff his  note  therefor  indorsed  by  defendant  Lanpher.  (The  action 
on  the  note  was  abandoned  and  plaintiff  elected  to  rely  upon  the 
action  against  defendant  Lanpher  as  undisclosed  principal.)  Judg- 
ment for  plaintiff  against  defendant  Lanpher,  who  appeals. 

Laughlin,  J.  .  .  .  The  facts  connected  with  that  transaction 
are  the  following :  Charles  Davies  Tainter,  a  son  of  the  defendant 
Lanpher,  applied  to  Mrs.  Brown,  the  plaintiff,  for  a  loan  of  $1,000. 
He  made  the  application  on  his  own  behalf,  and  the  plaintiff  declined 
to  loan  him  the  money  on  his  own  responsibility,  but  agreed  to  do  so 
if  his  mother,  the  defendant  Lanpher,  would  indorse  his  note  for  the 
amount  of  the  loan.  Thereupon,  according  to  his  testimony,  he 
reported  that  to  his  mother,  who  agreed  to  and  did  indorse  a  note, 

»  Fowler  v.  Bowery  Savings  Bank.  113  N.  T.  450 ;  McLean  v.  Flcke.  94  Iowa, 
283;    Beach  v.  Flcke,  Id.;   Terry  v.  Munger,  49  Hun.  560,  aff'd  121  N.  Y.  161. 


408  BROWN   V.   TAIXTER  AND   LANPHER.  [CHAP.   X. 

being  the  same  note  referred  to  in  the  second  cause  of  action  set 
forth  in  the  complaint,  and  upon  that  note  being  delivered  to  the 
plaintiff  she  loaned  the  sum  of  $1,000  to  Charles  Davies  Tainter. 
In  the  negotiation  which  resulted  in  the  loan  of  the  money  and  the 
giving  of  the  note,  Charles  Davies  Tainter  made  no  reference  to  his 
desire  to  borrow  the  money  on  behalf  of  his  mother,  but  he  testified 
on  the  trial  that  he  was  authorized  by  his  mother  and  on  her  behalf 
to  apply  to  the  plaintiff  for  a  loan  of  money.  Mrs.  Lanpher  con- 
tradicts that  statement,  but  the  jury  have  found  the  fact  so  to  be. 
When  the  note  matured  it  was  not  protested  and,  hence,  no  notice 
of  protest  was  given  to  Mrs.  Lanpher,  the  indorser.  The  plaintiff 
recovered  in  the  court  below  on  the  theory  that  Mrs.  Lanpher  was 
an  undisclosed  principal. 

The  rule  respecting  the  liability  of  an  undisclosed  principal  is 
very  plain.  Where  there  is  in  fact  an  agency,  and  that  fact  is  con- 
cealed, the  person  dealing  with  the  agent  may,  upon  discovering  the 
principal,  proceed  against  the  latter  and  not  against  the  agent 
(Kayton  v.  Barnett,  116  N.  Y.  625;  Brown  v.  Reiman,  48  App.  Div. 
295) ;  and  the  rule  has  been  carried  so  far  that,  notwithstanding 
there  is  a  written  agreement  by  which  the  agent  appears  as  a  prin- 
cipal, the  true  relation  may  be  established  by  parol  evidence  and  the 
real  principal  made  liable  (Coleman  v.  First  Xat.  Bank  of  Elmira,  53 
N.  Y.  388)  ;  but  all  the  cases  in  which  the  liability  of  an  undisclosed 
principal  has  been  enforced  contain  the  feature  that  the  person 
sought  to  be  held  liable  was  an  unknown  party  to  the  transaction 
whose  relationship  to  it  was  not  discovered  or  disclosed  until  after 
it  was  completed.  In  the  case  before  us  Mrs.  Lanpher  was  not  an 
undisclosed  principal.  She  was  an  open,  declared  and  active  partici- 
pant in  the  transaction.  She  came  into  it  in  the  manner  and  form 
and  relationship  invited  by  the  plaintiff  herself;  she  became  liable 
precisely  as  the  plaintiff  requested  and  required,  and  entered  into 
direct  contract  relations  with  her.  The  plaintiff  would  not  loan  the 
money  without  Mrs.  Lanpher  becoming  liable  for  it,  and  the  loan 
was  made  directly  upon  the  credit  both  of  the  son  and  the  mother. 
None  of  the  cases  bearing  upon  the  subject  of  an  undisclosed  princi- 
pal has  changed  the  relations  established  between  parties  by  their 
direct  personal  contracts,  of  such  a  character  as  to  exclude  the  idea  of 
agency.  In  the  transaction  with  the  plaintiff  Mrs.  Lanpher  acted 
for  herself.  The  plaintiff  was  willing  to  loan  the  money  only  upon 
Mrs.  Lanpher  becoming  liable  to  her  for  it.  We  think,  therefore, 
the  case  does  not  present  the  feature  of  an  undisclosed  principal,  and 
that  the  plaintiff  was  not  entitled  to  recover  against  the  appellant 
upon  the  first  cause  of  action. 

The  judgment  and  order  denying  the  motion  for  a  new  trial  must, 
therefore,  be  reversed  and  a  new  trial  ordered,  with  costs  to  appellant 
to  abide  the  event. 


CHAP.  X.]       same:   exception  based  on  election.  409 

Patterson  and  McLaughlin,  J  J.,  concurred;  O'Brien,  P.  J., 
and  Houghton,  J.,  dissented. 

Houghton,  J.  (dissenting)  :  I  do  not  think  the  plaintiff  has  lost 
her  right  to  hold  the  defendant  Lanpher  as  an  unknown  principal 
simply  because  she  happened  to  name  her  as  the  party  whom  she 
wished  to  indorse  the  defendant  Tainter's  note.  The  defendant  Lan- 
pher, by  such  indorsement,  it  is  true,  became  identified  with  the 
transaction  of  the  loan  of  the  money,  but  only  through  her  con- 
tingent liability  as  indorser.  This  indorsement  did  not  disclose  to 
the  plaintiff  that  Lanpher  was  the  principal  and  that  Tainter  was 
a  mere  agent  concealing  the  name  of  his  principal.  If  the  defendant 
Lanpher  was  in  fact  the  principal  and  the  money  was  borrowed  for 
her  as  the  jury  has  found,  notwithstanding  the  giving  of  the  note, 
the  plaintiff  has  a  right  to  recover  from  her  on  her  direct  liability 
for  borrowed  money.  If  the  plaintiff  cannot  recover  on  the  theory 
that  the  agent  borrowed  for  an  undisclosed  principal  she  cannot 
recover  at  all,  because  the  note  was  not  protested  and  the  defendant 
Lanpher  refused  to  renew  it.  The  fact  that  an  undisclosed  principal 
has  something  to  do  with  the  transaction  short  of  making  himself 
absolutely  liable,  does  not  release  him  from  liability  for  the  acts  of 
his  agent.  It  was  not  the  fact  that  the  plaintiff  knew  or  suspected 
that  the  money  was  being  borrowed  for  the  mother  that  led  her  to  ask 
for  the  mother's  indorsement. 

The  theory  upon  which  one  is  precluded  from  asserting  liability 
against  an  undisclosed  principal  who  has  participated  in  the  trans- 
action is  that  the  undisclosed  principal  has  made  himself  absolutely 
liable,  as  though  his  principalship  had  been  disclosed. 

The  liability  of  an  indorser  is  contingent  upon  presentation  of  the 
note  and  notice  of  dishonor.  In  that  sense  it  is  contingent,  and  in 
that  sense  it  is  not  as  absolute  as  a  direct  liability  for  borrowed 
money. 

If  the  money  was  in  fact  borrowed  for  the  mother  through  the 
agency  of  the  son,  her  indorsement  was  not  a  fulfillment  of  her 
obligation  to  repay  because  of  the  undisclosed  agency. 

The  motions  were  finally  properly  disposed  of,  and  I  think  the 
judgment  should  be  affirmed  instead  of  reversed. 

O'Brien,  P.  J.,  concurred. 

Judgment  and  order  reversed,  new  trial  ordered,  costs  to  appellant, 
to  abide  event.    Order  filed. 


410  BBIGOS   V.    PARTRIDGE.  [CHAP,    X. 

4.    Same:  Exception  as  to  Sealed  Instruments. 
BEIGGS   V.    PARTRIDGE. 

64  N.  Y.  367.     1876. 

Action  to  recover  the  purchase  price  unpaid  under  a  contract  for 
the  purchase  and  sale  of  lands.  Complaint  dismissed.  Plaintiff 
appeals. 

The  complaint  and  the  opening  remarks  of  plaintiff's  counsel 
at  the  trial  alleged  that  the  contract  was  under  seal;  that  it  was 
signed  by  one  Hurlburd;  that  defendant  Partridge's  name  did  not 
appear  in  the  instrument;  but  that  plaintiff  would  prove  that  Hurl- 
burd was  acting  solely  for  Partridge  under  a  parol  authority;  and 
that  Partridge  had  paid  or  caused  to  be  paid  the  sum  of  $100  on  the 
delivery  of  the  instrument.  Defendant's  counsel  moved  to  dismiss 
the  complaint  on  the  ground  that  the  facts  stated  did  not  constitute 
a  cause  of  action,  and  that  it  was  not  competent  to  vary  the  terms 
of  the  instrument  by  parol  proof  that  the  party  signing  it  as  princi- 
pal was  not  a  principal,  but  an  agent.    The  court  granted  the  motion. 

Andrews,  J.  .  .  .  The  real  question  is,  can  the  vendor,  in  a  sealed 
executory  agreement,  inter  partes,  for  the  sale  of  land,  enforce  it 
as  the  simple  contract  of  a  person  not  mentioned  in  or  a  party  to  the 
instrument,  on  proof  that  the  vendee  named  therein,  and  who  signed 
and  sealed  it  as  his  contract,  had  oral  authority  from  such  third 
person  to  enter  into  the  contract  of  purchase,  and  acted  as  his  agent 
in  the  transaction;  and  can  the  vendor  on  this  proof,  there  having 
been  no  default  on  his  part,  and  he  being  ready  and  willing  to  convey, 
recover  of  such  third  person  the  unpaid  purchase  money?  This 
question  here  arises  in  a  case  where  the  vendor,  so  far  as  it  appears, 
has  remained  in  possession  of  the  land,  and  where  no  act  of  ratifica- 
tion of  the  contract  by  the  undisclosed  principal  has  been  shown. 
It  is  not  disputed,  and  indeed  it  cannot  be,  that  Hurlburd  is  bound 
to  the  plaintiff  as  covenantor,  upon  the  covenants  in  the  agreement. 
He  covenants  for  himself  and  not  for  another,  to  pay  the  purchase 
money,  and  by  his  own  seal  fixes  the  character  of  the  obligation  as 
a  specialty.  He  is  liable  to  perform  the  contract  irrespective  of 
the  fact  whether  it  can  be  enforced  against  his  nominal  principal. 
On  the  other  hand  it  is  equally  clear  that  Hurlburd's  covenant  cannot 
be  treated  as,  or  made  the  covenant  of,  the  defendant.  Those  persons 
only  can  be  sued  on  an  indenture  who  are  named  as  parties  to  it, 
and  an  action  will  not  lie  against  one  person  on  a  covenant  which 
purports  to  have  been  made  by  another.  Beckham  v.  Drake,  9  M. 
&  W.  79;  Spencer  v.  Field,  10  Wend.  88;  Townsend  v.  Hubbard, 
4  Hill,  351. 


CHAP.  %.]  same:    as  to  sealed  instruments.  411 

In  the  case  last  cited,  it  was  held  that  where  an  agent  duly  author- 
ized to  enter  into  a  sealed  contract  for  the  sale  of  the  land  of  his 
principals,  had  entered  into  a  contract  under  his  own  name  and  seal, 
intending  to  execute  the  authority  conferred  upon  him,  the  principals 
could  not  treat  the  covenants  made  by  the  agent  as  theirs,  although 
it  clearly  appeared  in  the  body  of  the  contract  that  the  stipulations 
were  intended  to  be  between  the  principals  and  purchasers  and  not 
between  the  vendees  and  the  agent.  The  plaintiffs  in  that  case  were 
the  owners  of  the  land  embraced  in  the  contract,  and  brought  their 
action  in  covenant  to  enforce  the  covenant  of  the  vendees  to  pay  the 
purchase  money,  and  the  court  decided  that  there  was  no  reciprocal 
covenant  on  the  part  of  the  vendors  to  sell,  and  that  for  want  of 
mutuality  in  the  agreement  the  action  could  not  be  maintained.  It 
is  clear,  that  unless  the  plaintiff  can  pass  by  the  persons  with  whom 
he  contracted,  and  treat  the  contract  as  the  simple  contract  of  the 
defendant,  for  whom  it  now  appears  that  Hurlburd  was  acting,  this 
action  must  fail.  The  plaintiff  invokes  in  his  behalf  the  doctrine 
that  must  now  be  deemed  to  be  the  settled  law  of  this  court,  and 
which  is  supported  by  high  authority  elsewhere,  that  a  principal  may 
be  charged  upon  a  written  parol  executory  contract  entered  into  by 
an  agent  in  his  own  name,  within  his  authority,  although  the  name 
of  the  principal  does  not  appear  in  the  instrument,  and  was  not  dis- 
closed, and  the  party  dealing  with  the  agent  supposed  he  was  acting 
for  himself,  and  this  doctrine  obtains  as  well  in  respect  to  contracts 
which  are  required  to  be  in  writing,  as  to  those  where  a  writing  is 
not  essential  to  their  validity.  Higgins  v.  Senior,  8  M.  &  W.  834; 
Trueman  v.  Loder,  11  Ad.  &  El.  589;  Dykers  v.  Townsend,  24 
N.  Y.  57 ;  Coleman  v.  First  Nat.  Bank  of  Elmira,  53  N.  Y.  388 ;  Ford 
V.  Williams,  21  How.  289;  Huntington  v.  Knox,  7  Gush.  371;  The 
Eastern  R.  R.  Co.  v.  Benedict,  5  Gray,  561;  Hubbert  v.  Borden, 
6  Wharton,  79;  Browning  v.  Provincial  Ins.  Co.,  5  L.  R.  (P.  C.) 
263;  Calder  v.  Dobell,  6  L.  R.  (C.  P.)  486;  Story  on  Agency, 
§§  148,  160. 

It  is,  doubtless,  somewhat  difficult  to  reconcile  the  doctrine  here 
stated  with  the  rule  that  parol  evidence  is  inadmissible  to  change, 
enlarge,  or  vary  a  written  contract,  and  the  argument  upon  which  it 
is  supported  savors  of  subtlety  and  refinement.  In  some  of  the 
earlier  cases  the  doctrine  that  a  written  contract  of  the  agent  could 
be  enforced  against  the  principal,  was  stated  with  the  qualification 
that  it  applied,  when  it  could  be  collected  from  the  whole  instrument, 
that  the  intention  was  to  bind  the  principal.  But  it  will  appear 
from  an  examination  of  the  cases  cited  that  this  qualification  is  no 
longer  regarded  as  an  essential  part  of  the  doctrine.  Whatever 
ground  there  may  have  been  originally  to  question  the  legal  sound- 
ness of  the  doctrine  referred  to,  it  is  now  too  firmly  established  to 
be  overthrown,  and  I  am  of  opinion  that  the  practical  effect  of  the 


412  BRIGGS   V.    PARTRIDGE.  [CHAP.    X. 

rule  as  now  declared  is  to  promote  justice  and  fair  dealing.  There 
is  a  well-recognized  exception  to  the  rule  in  the  case  of  notes  and  bills 
of  exchange,  resting  upon  the  law  merchant.  Persons  dealing  with 
negotiable  instruments  are  presumed  to  take  them  on  the  credit 
of  the  parties  whose  names  appear  upon  them;  and  a  person  not 
a  party  cannot  be  charged  upon  proof  that  the  ostensible  party 
signed  or  indorsed  as  his  agent.  Barker  v.  Mechanics'  Ins.  Co., 
3  Wend.  94;  Pentz  v.  Stanton,  10  Id.  271;  De  Witt  v.  Walton, 
9  N.  Y.  571 ;  Stackpole  v.  Arnold,  11  Mass.  27 ;  Eastern  R.  R.  Co. 
V.  Benedict,  5  Gray,  561 ;  Beckham  v.  Drake,  9  M.  &  W.  79.  That 
Hurlburd  had  oral  authority  from  the  defendant  to  enter  into  a  con- 
tract for  the  purchase  of  the  laud,  and  that  he  was  acting  for  the 
defendant  in  making  it  is  admitted;  and  if  the  contract  had  been 
a  simple  contract  and  not  a  specialty  the  defendant  would,  I  think, 
have  been  bound  by  it  within  the  authorities  cited.  Xo  question 
would  arise  under  the  Statute  of  Frauds,  for  the  statute  prescribing 
what  shall  be  necessary  to  make  a  valid  contract  for  the  sale  of  lands 
requires  only  that  the  contract,  or  some  note  or  memorandum  thereof 
expressing  the  consideration,  should  be  in  writing  and  subscribed  by 
the  party  by  whom  the  sale  is  to  be  made,  or  his  agent  lawfully 
authorized.  2  E.  S.  135,  §§  8,  9.  In  this  case  the  contract  was  signed 
by  the  vendors ;  and  even  if  it  had  been  executed  on  their  part  by  an 
agent  pursuant  to  an  oral  authority,  it  would  have  been  a  valid 
execution  within  the  statute.  Lawrenc'e  v.  Taylor,  5  Hill,  107; 
Worrall  v.  Munn,  1  Seld.  229.  But  the  vendee's  contract  need  not 
be  in  writing.     McCrea  v.  Purmort,  16  Wend.  460. 

We  return,  then,  to  the  question  originally  stated.  Can  a  contract 
under  seal,  made  by  an  agent  in  his  own  name  for  the  purchase  of 
land,  be  enforced  as  the  simple  contract  of  the  real  principal  when 
he  shall  be  discovered?  No  authority  for  this  broad  proposition  has 
been  cited.  There  are  cases  which  hold  that  when  a  sealed  contract 
has  been  executed  in  such  form,  that  it  is,  in  law,  the  contract  of  the 
agent  and  not  of  the  principal,  but  the  principal's  interest  in  the 
contract  appears  upon  its  face,  and  he  has  received  the  benefit  of 
performance  by  the  other  party,  and  has  ratified  and  confirmed  it 
by  acts  in  pais,  and  the  contract  is  one  which  would  have  been  valid 
without  a  seal,  the  principal  may  be  liable  in  assumpsit  upon  the 
promise  contained  in  the  instrument,  which  may  be  resorted  to  to 
ascertain  the  terms  of  the  agreement.  Randall  v.  Van  Vechten, 
19  John.  60;  Du  Bois  v.  The  Del.  &  Hudson  Canal  Co.,  4  Wend. 
285;  Lawrence  v.  Taylor,  5  Hill,  107;  see  also  Evans  v.  Wells,  22 
Wend.  324;  Worrall  v.  Mimn,  supra;  Story  on  Agency,  §  277 ;  1  Am. 
Leading  Cases,  735,  note. 

The  plaintiff's  agreement  in  this  case  was  with  Hurlburd,  and  not 
with  the  defendant.  The  plaintiff  has  recourse  against  Hurlburd 
on  his  covenant,  which  was  the  only  remedy  which  he  contemplated 


CHAP.  X.]  same:   as  to  sealed  instrumknts.  413 

when  the  agreement  was  made.  No  ratification  of  the  contract  by 
the  defendant  is  shown.  To  change  it  from  a  specialty  to  a  simple 
contract,  in  order  to  charge  the  defendant,  is  to  make  a  different 
contract  from  the  one  the  parties  intended.  A  seal  has  lost  most 
of  its  former  significance,  but  the  distinction  between  specialties  and 
simple  contracts  is  not  obliterated.  A  seal  is  still  evidence,  though 
not  conclusive  of  a  consideration.  The  rule  of  limitation  in  respect 
to  the  two  classes  of  obligations  is  not  the  same.  We  find  no  author- 
ity for  the  proposition  that  a  contract  under  seal  may  be  turned  into 
the  simple  contract  of  a  person  not  in  any  way  appearing  on  its 
face  to  be  a  party  to,  or  interested  in  it,  on  proof  dehors  the  instru- 
ment, that  the  nominal  party  was  acting  as  the  agent  of  another, 
and  especially  in  the  absence  of  any  proof  that  the  alleged  principal 
has  received  any  benefit  from  it,  or  has  in  any  way  ratified  it,  and 
we  do  not  feel  at  liberty  to  extend  the  doctrine  applied  to  simple 
contracts  executed  by  an  agent  for  an  unnamed  principal  so  as  to 
embrace  this  case.  The  general  rule  is  declared  by  Shaw,  C.  J., 
in  Huntington  v.  Knox,  7  Cush.  371 :  "  Where  a  contract  is  made 
by  deed,  under  seal  on  technical  grounds,  no  one  but  a  party  to  the 
deed  is  liable  to  be  sued  upon  it,  and,  therefore,  if  made  by  an 
attorney  or  agent,  it  must  be  made  in  the  name  of  the  principal,  in 
order  that  he  may  be  a  party,  because  otherwise  he  is  not  bound 
by  it." 

The  judgment  of  the  General  Term  should  be  aSirmed. 

All  concur.  Judgment  affirmed.^ 


DENIKE   V.   DE    GRAAF. 

87  Hun  (N.  Y.  S.  C.)   61.     1895. 

CULLEN,  J.  This  is  an  appeal  from  a  judgment  in  favor  of  the 
plaintiff  entered  on  the  verdict  of  the  jury  at  circuit,  and  from  an 
order  denying  defendant's  motion  for  a  new  trial. 

The  action  is  to  recover  damages  for  deceit  in  the  contract  for  the 
exchange  of  lands.  The  complaint  alleges  that  one  Bumham,  acting 
for  the  plaintiff,  entered  into  an  agreement  with  the  defendant  under 
their  hands  and  seals  for  the  exchange  of  certain  lands,  and  that  the 
plaintiff  was  induced  to  enter  into  such  contract  and  carry  it  out 
by  the  false  representation  of  the  defendant  that  the  land  he  agreed 
to  convey  had  cost  him  $125,000  in  trade.  The  written  agreement 
produced  on  the  trial  was  between  Bumham  individually  and  the 
defendant,  and  was  under  seal. 

»  It  is  also  held  In  New  York  that  this  rule  applies  although  the  seal  Is  super- 
fluous. Spencer  v.  Huntington,  100  App.  Div.  463,  affirmed  on  opinion  below  in  183 
N.  Y.  506. 


414  DENIKE  V.   DE  GBAAF.  [CHAP,  X. 

The  first  question  presented  is  whether  the  plaintiff  can  maintain 
this  action.  That  he  could  have  maintained  no  action  on  the  con- 
tract is  unquestionable,  because  as  to  agreements  under  seal  it  is  not 
permitted  to  show  that  any  of  the  parties  acted  as  agent  for  a  prin- 
cipal not  named  in  the  instrument.  (Briggs  v.  Partridge,  64  N.  Y. 
364;  Schaefer  v.  Henkel,  75  id.  378.) 

The  plaintiff  concedes  this  proposition,  but  contends  that  the  rule 
only  applies  when  the  action  is  brought  directly  on  the  sealed  instru- 
ment, and  that  this  action  is  not  on  the  contract,  but  for  fraud  in 
inducing  him  to  enter  into  the  contract.  We  are  referred  to  no 
authority  in  support  of  this  claim,  nor  can  we  find  any.  The  plain- 
tiff was  not  in  law  a  party  to  the  contract.  Though  Burnham  was 
his  agent  the  plaintiff  was  no  wise  bound  in  the  contract  or  liable 
for  its  non-performance.  In  Squier  v.  Norris  (1  Lans.  282)  the 
husband,  with  the  authority  of  his  wife,  made  a  contract  under  seal 
in  his  own  name  for  a  sale  of  the  wife's  land  and  she  received  a  sum 
of  money  on  account  of  the  sale.  Yet  it  was  held  that  a  perform- 
ance of  the  contract  by  the  wife  could  not  be  enforced.  We  cannot 
see  how  a  party  can  be  defrauded  by  the  execution  of  a  contract 
between  strangers,  and  such  in  law  were  the  parties  to  the  contract 
to  this  plaintiff.  Upon  discovery  of  a  fraud  the  party  defrauded 
has  two  remedies.  He  may  disafl&rm  the  contract,  and,  tendering 
the  return  of  what  he  has  received  under  it,  may  compel  the  other 
party  to  restore  what  he  has  obtained  from  it.  Or  he  may  affirm 
the  contract,  stand  on  his  bargain  and  recover  as  damages  the  differ- 
ence between  the  actual  value  of  what  he  has  received  and  what 
would  have  been  its  value  had  the  fraudulent  representations  been 
proved.     (Vail  v.  Eeynolds,  118  N.  Y.  297.) 

As  Burnham  was  the  only  party  who  could  have  enforced  the 
contract  it  would  seem  clear  that  he  was  the  only  person  who  could 
disaffirm  it.  The  right  to  disaffirm  could  not  well  vest  in  one  per- 
son and  a  right  to  recover  damages  in  another.  Further,  as  said  in 
Vail  V.  Eeynolds,  the  action  for  deceit  is  an  affirmance  of  the  con- 
tract; the  action  is  in  fact  based  on  the  contract.  Practically  the 
representation  is  a  warranty  which  the  law  incorporates  into  the 
contract  on  account  of  the  fraud  of  the  defendant.  It  is  impossible 
to  separate  the  title  to  a  right  of  action  for  such  damages  from  the 
title  to  the  contract  itself,  except  by  an  assignment. 

The  judgment  and  order  denying  motion  for  a  new  trial  should 
be  reversed  and  the  complaint  dismissed,  with  costs. 

Beown,  p.  J.,  concurred ;  Dykman,  J.,  not  sitting. 

Judgment  reversed  and  complaint  dismissed,  with  costs} 

>  Affirmed  on  opinion  below  in  152  N.  Y.  650. 


CHAP.  "x.Ji         same:   as  to  sealed  instrdmexts.  415 

VAN   DYKE   V.   VAN   DYKE. 

123  6a.  686.     1905. 

The  husband  of  defendant  borrowed  of  plaintiff  $1,400  and  gave 
plaintiff  therefor  his  note  under  seal.  Later  plaintiff  discovered 
that  the  husband  was  acting  for  his  wife  (defendant)  and  that  she 
had  the  benefit  of  the  loan. 

On  motion  the  court  dismissed  the  action  on  two  grounds:  first, 
that  the  declaration  set  out  no  cause  of  action,  for  the  reason  that 
the  allegations  disclosed  that  it  was  based  on  a  contract  under  seal, 
and  in  such  a  case  the  law  would  not  permit  the  plaintiff  to  proceed 
against  the  undisclosed  principal  when  discovered;  and  second,  that 
the  allegations  of  the  petition  disclosed  that  the  plaintiff  parted  with 
her  money  on  an  express  contract  under  seal,  and  no  action  can  be 
maintained  against  the  defendant  for  money  had  and  received.  The 
plaintiff  excepted. 

Lumpkin,  J.  (after  deciding  that  an  undisclosed  principal  is  not 
liable  upon  a  sealed  instrument).  ...  It  is  contended,  however, 
that  whether  the  plaintiff  can  recover  on  the  note  or  not,  she  has 
a  cause  of  action  against  the  defendant  aside  from  the  note  under 
the  facts  alleged.  The  case  of  Farrar  v.  Lee,  10  N.  Y.  App.  Div. 
130,  was  very  similar  to  that  now  under  consideration.  It  is  there 
said,  "  That  the  liability  rested  entirely  upon  the  bond  in  which  any 
preliminary  contract  was  merged;  that,  as  the  bond  was  signed  by 
Tanner  [the  agent]  in  his  own  name,  and  not  as  agent  for  Lee  [the 
principal],  it  was  not  competent  to  transfer  by  parol  evidence,  or  in 
any  other  way,  from  Tanner  to  Lee,  the  obligation  which  Tanner  had 
assumed  personally."  In  the  case  of  Lenney  v.  Finley,  118  Ga.  718, 
it  was  contended  that  if  the  concealed  principal  was  not  liable  on  the 
contract  by  reason  of  its  being  under  seal,  nevertheless,  having  occu- 
pied the  premises  and  used  them  for  the  purpose  of  conducting 
business,  she  was  liable  to  the  plaintiff.  This  contention  was  denied 
by  the  court.  In  the  case  of  Maddox  v.  "Wilson,  91  Ga.  39,  no 
opinion  was  written.  The  third  headnote  appears  to  conflict  with  the 
ruling  here  made.  The  decision  was  made  by  two  justices,  and  not 
by  a  full  bench;  and  was  disapproved  in  Lenney  v.  Finley,  supra. 
Under  the  allegations  of  the  petition  the  trial  court  committed  no 
error  in  sustaining  the  demurrer. 

Judgment  aflBrmed.  All  the  justices  concur,  except  Simmons,  C. 
J.,  absent. 


416  J.   B.   STREETEB,   JR.,   CO.   V.   JANU.  [CHAP.  X. 

J.   B.    STEEETER,   Jr.,    CO.   v.   JANU. 

90  Minn.  393.     1903. 

Collins,  J.  In  this  action  the  plaintiff  corporation  is  attempting, 
as  vendor,  to  enforce  payment  of  an  amount  due  in  accordance  with 
the  terms  of  a  written  executory  contract  for  the  purchase  and  con- 
veyance of  real  estate.  The  defendant  was  not  named  in  the  contract, 
nor  did  he  execute  it.  The  claim  is  that  defendant  is  an  undisclosed 
principal  and  the  real  vendee,  and  that  the  person  named  in  the  in- 
strument as  vendee  was  simply  acting  as  defendant's  agent  when  he 
made  the  purchase  and  executed  the  contract.  It  stands  admitted 
that  plaintiff  had  no  knowledge  that  this  defendant  was  the  principal 
until  long  after  the  contract  was  entered  into.  At  the  close  of  plain- 
tiff's testimony,  and  upon  motion  of  defendant,  the  court  instructed 
the  jury  to  find  a  verdict  in  favor  of  the  latter,  which  was  done,  and 
the  appeal  is  from  an  order  refusing  to  grant  plaintiff's  motion  for 
a  new  trial. 

The  record  shows  that  in  the  year  1902  defendant's  son,  a  young 
man,  entered  into  a  contract  under  seal  with  the  plaintiff,  whereby 
the  latter  agreed  to  sell  and  convey  to  the  former  some  1,500  acres 
of  land  in  North  Dakota,  the  agreed  consideration  being  $13,525. 
Of  this  amount,  $75  was  paid  down,  $3,450  was  to  be  paid  in  install- 
ments prior  to  November  1st  following,  and  the  balance  in  yearly 
payments  of  $1,025,  evidenced  by  the  son's  promissory  notes.  $285 
was  afterwards  paid  to  plaintiff.  The  son  having  refused  to  make 
further  payments,  this  action  was  brought  against  the  father  on  the 
ground  before  mentioned;  the  allegations  in  the  complaint  being 
that  he  was  the  real  vendee,  that  the  contract  was  actually  made  for 
him  and  in  his  behalf,  and  that  of  these  facts  the  plaintiff  was  not 
informed  until  after  the  writing  had  been  executed.  The  answer  put 
in  issue  these  allegations.  Testimony  was  introduced  at  the  trial  in 
the  nature  of  admissions  made  by  the  defendant  father  tending  to 
show  that  he  sent  his  son  into  Dakota  to  buy  this  land,  that  the  pur- 
chase was  made  by  the  latter  for  him,  and  that  the  money  which  had 
been  paid  by  the  son  and  received  by  the  plaintiff  belonged  to  him, 
and  not  to  the  son.  .  .  . 

We  have  heretofore  stated  that  this  executory  contract  related  to 
Dakota  land,  and  was  under  seal.  We  assume,  in  the  absence  of 
allegations  or  proof  to  the  contrary,  that  this  instrument  was  exe- 
cuted and  delivered  within  the  state  of  Minnesota;  and  we  also 
assume  that  the  rules  of  law  herein  prevailing  alone  control.  It  was 
executed  in  behalf  of  the  corporation  by  its  president,  who  attached 
a  private  seal  —  a  scroll  of  the  pen  —  and  also  the  corporate  seal. 
Annexed  to  the  signature  of  the  vendee  was  his  seal  —  a  scroll  of  the 


CHAP.  X.]  same:   as  to  sealed  instruments.  417 

pen.  Under  the  common-law  rule,  these  seals  made  the  instrument 
a  specialty,  and  removed  it  from  that  class  of  writings  known  as 
"  simple  contracts."  It  is  the  contention  of  defendant's  counsel  that 
when  a  contract  becomes  a  specialty,  because  executed  under  seal, 
an  undisclosed  principal  cannot  be  bound  or  held  by  its  terms,  unless 
he  has  in  some  manner  ratified  the  act  of  the  agent,  or  received  the 
benefit  of  the  performance  by  the  other  party,  neither  of  which  appear 
in  this  case. 

The  common-law  rule  in  respect  to  the  liability  of  an  undisclosed 
principal  upon  a  written  instrument  is  concisely  stated  in  1  Amer. 
&  Eng.  Ency.  PL  &  Pr.  (2d  Ed.)  1139,  etc.,  and  cases  are  cited 
which  fully  support  the  text.  From  these  citations  it  appears  that, 
if  this  instrument  is  nothing  but  a  simple  contract,  the  right  to 
pursue  the  undisclosed  principal  is  absolute  and  unrestricted.  If, 
upon  the  other  hand,  the  common-law  distinction  between  sealed  and 
unsealed  instruments  remains,  and  it  is  a  specialty,  an  undisclosed 
principal  cannot  be  shown,  or  held  liable.  No  one  but  the  party 
signing  can  be  bound  by  it.  But  the  distinction  between  sealed  and 
unsealed  private  contracts  has  been  abrogated  by  Laws  1899,  p.  88, 
c.  86,  whereby  the  use  of  private  seals  on  written  contracts  is  abol- 
ished, and  it  is  expressly  declared  that  the  addition  of  a  private  seal 
to  an  instrument  in  writing  "  shall  not  affect  its  character  in  any 
respect."  The  result  of  this  legislation  is  that  all  differences  there- 
tofore existing  in  the  law  between  simple  contracts  and  specialties, 
executed  by  private  parties,  and  which  had  long  prevailed,  are  dis- 
carded. They  are  alike  in  all  respects,  for  the  unequivocal  language 
used  must  be  given  its  full  effect.  See  Noyes  v.  French  Lumbering 
Co.,  80  Minn.  397,  83  N".  W.  385.  Statutes  of  this  import  prevail  in 
a  large  number  of  states,  but  the  one  in  question  is  much  like  those 
of  Tennessee  (Shannon's  Code,  1896,  §  3213)  and  Washington 
(Ballinger's  Ann.  Codes  &  St.  1897,  §  4523).  We  find  no  cases  in 
these  states  which  bear  upon  the  exact  question  now  presented. 

With  the  distinction  abolished,  it  follows  that  testimony  tending 
to  show  that  the  act  of  tjie  alleged  agent  was  within  the  limits  of  the 
power  delegated,  and  that  defendant  was  an  undisclosed  principal, 
was  competent,  and  in  this  instance  a  prima  facie  case  had  been  made 
against  him.  The  cause  should  have  been  submitted  to  the  jury  on 
this  question. 

Order  reversed  and  a  new  trial  granted.^ 

*  In  Sanger  v.  Warren,  91  Tex.  472  (1898),  the  court,  after  applying  the  common 
law  rule  that  an  undisclosed  principal  cannot  be  sued  on  a  sealed  instrument,  said 
(Denman,  Associate  Judge,  at  p.  483)  :  "We  are  of  opinion  that  the  result  Is  not 
affected  by  the  following  statute :  '  No  private  seal  or  scroll  shall  be  necessary  to 
the  validity  of  any  contract,  bond,  or  conveyance,  whether  respecting  real  or  per- 
sonal property,  or  any  other  Instrument  of  writing,  whether  official,  judicial,  or 
private,  except  such  as  are  made  by  corporations,  nor  shall  the  addition  or  omlsslod 
of  a  seal  or  scroll  In  any  way  affect  the  force  and  effect  of  the  same."  Rev.  Stats., 
Art.  4862.    It  is  true  the  statute  renders  It  unnecessary  to  place  a  seal  upon  a  deed« 

27 


418  m'fVes  and  teadees  bank  v.  love.       .  [chap.  X. 

5.     Same:  Exception  as  to  Negotiable  Instruments. 

MANUFACTUREKS   &   TRADERS   BANK   v.   LOVE. 

13  N.  Y.  App.  Div.  561.     1897. 

The  action  was  brought  to  recover  of  the  defendant  upon  a  prom- 
issory note  which  read  as  follows : 

$201.93.  Buffalo,  N.  Y.,  May  3,  1895. 

Two  months  after  date  I  promise  to  pay  to  the  order  of  Rice-Blake 
Lumber  Company,  two  hundred  one  and  93-100  dollars,  at  Bank  of  Buffalo, 
here.     Value  received. 

(Signed)         J.  W.  Johnstokt,  Agent. 

This  note  was  executed  by  Johnston  to  the  payees  therein  named 
for  lumber  purchased  of  them.  Johnston  was  conducting  a  lumber 
business  in  Buffalo.  The  payee  indorsed  and  transferred  this  note 
to  the  plaintiff  for  value  before  it  was  due.  The  defendant  resided 
in  Elmira  and  was  a  stepdaughter  of  Johnston's.  Johnston  and  de- 
fendant had  executed  and  filed  an  instrument  declaring  that  John- 
ston was  defendant's  agent,  but  the  payee  of  the  note  had  no  notice 
of  it.  An  instrument  had  later,  and  before  the  delivery  of  the  note, 
been  executed  revoking  the  agency,  but  this  was  not  filed.  (See 
L.  1893,  c.  708,  §  363a.) 

Judgment  for  defendant.     Plaintiff  appeals, 

but  it  does  not  undertake  to  give  one  executed  without  a  seal  a  different  status  from 
what  it  would  have  had  before  if  executed  with  a  seal.  On  the  contrary,  it  provides 
that  the  addition  or  omission  of  a  seal  shall  not  '  in  any  way  affect  the  force  and 
effect  of  the  same.'  In  order  for  the  omission  of  the  seal  not  to  in  any  way  affect 
its  force  or  effect  the  deed  must  be  allowed  to  retain  the  only  status  it  had  before. 
When  we  adopted  the  common  law  its  settled  rules  relating  to  the  construction  and 
effect  of  deeds  became  a  part  of  our  system.  To  them  we  were  compelled  to  resort 
to  determine  the  nature  and  extent  of  the  estate  conveyed  by  the  deed  as  well  as  of 
the  covenants  therein  contained,  and  who  were  bound  or  benefited  thereby.  It  was 
not  the  intention  of  said  statute  to  abolish  them.  As  said  in  Jones  v.  Morris,  61  Ala. 
524,  in  discussing  a  more  comprehensive  statute  than  ours,  '  though  a  seal  may  not 
now  be  necessary  to  a  conveyance  of  a  legal  estate  in  lands,  yet,  the  instrument,  the 
deed  of  conveyance,  which  it  must  still  be  termed,  though  shorn  of  its  dignity  of  a 
seal,  retains  all  the  operation  and  effr  ;t  of  a  deed  sealed  at  common  law.  Its  cov- 
enants may  be  as  comprehensive,  and  whatever  they  may  be,  are  as  obligatory,  and 
its  recitals  are  as  incapable  of  being  gainsaid,  as  if  it  were  sealed  with  the  greatest 
formality.  The  estoppel  which  a  sealed  instrument,  or  its  covenants,  created  at 
common  law,  is  now  claimed  by  the  appellee  shall  be  attached  to  the  conveyance  by 
the  agents  of  the  appellant.  And  we  can  not  doubt  that  the  estoppel  which  at  com- 
mon law  grew  out  of  the  covenants  or  the  recitals  of  a  sealed  instrument,  attaches 
now  to  an  unsealed  conveyance  of  the  legal  estate  in  lands.  The  statute  is  not  so 
broad  in  its  sweep  as  to  blot  out  the  common  law  principles  which  give  security  to 
conveyances  of  real  estate.  It  would  be  fearful.  Indeed,  if  this  was  the  operation 
of  the  statute,  and  the  freehold  in  lands  was  not  invested  with  greater  dignity  than 
the  fleeting  ownership  of  chattels.'  Delvin  on  Deeds,  sec.  249,  says :  '  The  effect  of 
these  statutes  is  simply  to  dispense  with  the  necessity  of  affixing  a  seal  to  a  deed  ; 
but  in  other  respects,  as  for  instance  with  reference  to  the  doctrine  of  estoppel,  the 
deed  retains  the  incidents  it  possessed  as  a  sealed  instrument  at  common  law.'  The 
effect  of  the  statute  is  different  as  to  other  contracts,  for  the  placing  of  the  seal 
thereon  at  common  law  raised  them  from  parol  to  specialty  contracts  which  cannot 
be  done  under  the  statute." 


CHAP.  X.]       same:    as  to  negotiable  INSraUMENTS.  419 

"Ward^  J.  Whatever  may  be  the  rule  as  to  other  coihtracts,  not 
under  seal,  the  law  is  firmly  established  in  this  state  as  to  commercial 
paper  that  persons  dealing  with  negotiable  instruments  are  presumed 
to  take  them  on  the  credit  of  the  parties  whose  names  appear  upon 
them,  and  a  person  not  a  party  cannot  be  charged  upon  proof  that 
the  ostensible  party  signed  or  indorsed  as  his  agent.  Briggs  v. 
Partridge,  64  N.  Y.  363,  and  cases  there  cited ;  Cortland  Wagon  Co. 
V.  Lynch,  82  Hun,  173;  31  N.  Y.  Supp.  325;  Casco  National  Bank 
I'.  Clark,  139  N.  Y.  307.^ 

It  is  also  held  that  the  negotiable  instrument  binds  only  the 
ostensible  maker,  though  the  word  "  agent "  is  attached  to  his  signa- 
ture, no  principal,  being  named  in  the  body  of  the  instrument,  or 
indicated  by  the  signature.    (See  the  last  two  cases  cited.) 

The  law  merchant  surrounds  the  negotiable  paper  in  the  hands 
of  a  bona  fide  holder  with  a  credit  not  given  to  other  contracts,  and 
protects  him  against  hidden  equities  of  which  he  has  no  notice,  and 
permits  him  to  recover  against  the  party  whose  name  is  signed  to 
the  instrument  though  there  be  attached  to  his  name  the  word 
"  agent,"  and  he  is  not  bound  to  search  for  a  principal  unknown  to 
the  instrument  itself.  Nor  can  he  do  so.  The  rights  of  the  holder 
are  confined  to  the  parties  to  the  instrument,  and  he  must  rely  upon 
them  alone,  except  that  he  can  establish  that  the  name  used  as  the 
signature  to  the  instrument  has  been  adopted  by  the  assumed  prin- 
cipal or  by  the  person  not  named  in  the  instrument  as  his  own  in 
transacting  the  business.  This  may  be  done.  A  person  may  become 
a  party  to  a  bill  or  note  by  any  mark  of  designation  he  chooses  to 
adopt,  provided  it  be  used  as  a  substitute  for  his  name  and  he  intends 
to  be  bound  by  it.  De  Witt  v.  Walton,  9  N.  Y.  574;  Daniels  on  Neg. 
Inst.  §  304.  The  last  quoted  authority  says :  "  But  such  liability 
exists  only  where  it  is  afl&rmatively  and  satisfactorily  proved  that 
the  name  or  signature  thus  used  is  one  which  has  been  assumed  and 
sanctioned  as  indicative  of  their  contracts,  and  has  been,  with  their 
knowledge  and  consent,  adopted  as  a  substitute  for  their  own  names 
and  signatures  in  signing  bills  and  notes." 

No  authority  is  given  in  the  written  instrument  filed  from  the 
defendant  to  use  the  signature  of  J.  W.  Johnston,  Agent,  as  and  for 
the  defendant.  Nor  is  there  any  proof  that,  in  fact,  the  defendant 
had  authorized  the  use  of  that  name  as  representing  her  in  the 
business,  and  the  case  seems  to  stand  upon  the  bare  proposition  that, 
although  neither  the  plaintiff  nor  the  lumber  company  had  knowl- 
edge of  the  instrument  filed  in  the  clerk's  office,  and  in  no  manner 
relied  upon  it,  and  had  no  knowledge,  in  fact,  that  the  signature 
to  the  note  in  any  manner  represented  the  defendant,  still  the  plain-- 
tiff  had  a  right  to  go  outside  of  the  instrument  and  explore  for  some 

*  See  also  Ranger  v.  Thalmann,  84  App.  DIt.  341,  affirmed  178  N.  Y.  574,  on 
opinion  b«low. 


420  HABPEB  V.   BANK.  [CHAP.    X. 

undiscovered  principal  that  the  simple  addition  of  "Agent"  to 
Johnston's  name  might  indicate,  and  having  found  this  instrument 
on  file,  could  stand  upon  that  and  recover. 

We  cannot  concur  in  this  view.  .  .  . 

We  have  reached  the  conclusion  that  the  decision  of  the  trial  court 
was  right  and  that  the  judgment  should  be  affirmed. 

All  concurred.  Judgment  affirmed,  with  costs. 


HAEPEK   V.   BANK. 

54  Oh.  St.  425.     1896. 

Petition  by  Bank  for  allowance  of  claim  against  insolvent  estate 
of  Harper.  Demurrer  to  petition  overruled.  Harper's  trustee 
appeals. 

Harper  procured  one  Matthews  to  execute  a  note  signed  by  Mat- 
thews and  payable  to  order  of  Moreland,  a  broker,  and  secured  by 
stock  owned  by  Harper.  Moreland  negotiated  it  to  plaintiff  and 
turned  over  the  proceeds  to  Harper.  Matthews  acted  only  as  agent 
for  Harper,  but  plaintiff  was  ignorant  of  this  fact  when  it  discounted 
the  note.    Matthews  is  irresponsible  and  the  stock  worthless. 

MiNSHALL,  J.  The  objection  to  a  recovery  on  the  petition  is, 
that  Harper's  name  nowhere  appears  on  the  note,  and  that  no  recov- 
ery can  be  had  against  him,  nor  his  assignee,  for  this  reason,  although 
the  money  was  thus  raised  for  his  use,  and  he  in  fact  received  it; 
and  authorities  are  cited  to  show  that  parties  cannot  be  added  to  and 
made  liable  on  instruments  of  this  kind  by  parol.  This  is  conceded 
to  be  the  rule,  particularly  where  there  is  a  disclosed  principal. 
In  such  cases  the  presumption  is  that  the  paper  was  taken  on  the 
credit  of  the  parties  to  it.  But  such  is  not  this  case,  and  the  objec- 
tion to  the  petition  on  this  ground  misapprehends  its  character. 
The  action  is  not  on  the  note  signed  and  indorsed  by  Matthews,  but 
on  the  special  facts  of  the  case,  of  which  the  making  of  the  note  is 
but  a  part.  It  is  a  settled  principle  of  the  law  founded  on  the  plain 
principle  of  justice  that  where  one  received  money  that  in  equity 
and  good  conscience  belongs  to  another,  the  latter  may  recover  it  as 
money  had  and  received  to  his  use.  This  was  the  phraseology  of  the 
common  law,  used  for  the  sake  of  the  remedy,  assumpsit.  Under 
the  code  the  fiction  of  a  promise  is  not  required  —  is,  in  fact,  con- 
trary to  its  rules.  By  it,  where  the  statement  of  the  facts  shows  a 
duty  neglected  on  the  pari;  of  the  defendant,  and  of  which  the 
plaintiff  has  the  right  to  require  performance,  the  petition  states 
a  cause  of  action. 

The  facts  disclosed  by  the  petition  are,  in  substance,  that  Harper 


CHAP.  X.]      same:   as  to  negotiable  instruments.  421 

procured  Matthews  to  make  and  indorse  a  promissory  note  for  six 
thousand  dollars,  pa3^able  at  the  office  of  a  broker,  and  also  trans- 
ferred to  Matthews  fifty  shares  of  the  stock  of  the  Fidelity  National 
Bank  to  be,  and  which  were  attached  to  the  note  as,  collateral  security. 
On  this  note  the  broker  obtained  the  money  from  the  plaintiff  and 
turned  it  over  to  Harper.  Matthews  is  irresponsible,  and  neither  the 
note  nor  the  stock  is  worth  anything.  Harper's  connection  with  the 
matter  was  nowhere  disclosed,  although  the  entire  transaction  was 
directed  by  himself  and  was  for  his  sole  benefit.  Good  conscience  cer- 
tainly required  Harper  to  pay  back  this  money  as  a  loan  to  himself; 
and,  being  insolvent,  it  should  be  accepted  as  a  valid  claim  against 
his  estate. 

The  cases  and  the  books  fully  support  a  recovery  in  such  a  case. 
As  observed  before,  it  is  not  a  case  where  it  may  be  presumed  that 
the  plaintiff  elected  to  rely  on  the  credit  of  the  names  of  the  parties 
to  the  paper  and  the  collateral  security;  for  the  name  of  the  real 
party  in  interest  was  not  disclosed,  so  that  there  could  have  been  no 
election,  and  the  action  is  not  on  the  note,  but  against  an  undisclosed 
principal  upon  the  special  facts  of  the  case,  making  it  inequitable 
and  unjust  for  him  to  retain  the  money,  or,  in  other  words,  not  to 
pay  the  note  he  procured  to  be  made  and  on  which  he  got  the  money. 
Pentz  V.  Stanton,  10  Wend.  371;  Allen  v.  Coit,  6  Hill,  318;  Kayton 
V.  Bamett,  116  N".  Y.  625;  Lovell  v.  Williams,  125  Mass.  439; 
Chemical  National  Bank  v.  City  Bank  (HI.)  40  N.  E.  Rep.  328; 
1  Randolph  Com.  Paper,  180 ;  1  Parson's  N.  &  B.  93,  note  1. 

The  case  of  The  Chemical  National  Bank  v.  The  City  Bank  is 
quite  similar  in  its  facts  to  the  case  before  us,  but  not'more  so,  on 
principle,  than  the  other  cases  cited.  .  .  . 

The  case  of  Peterson  v.  Roach,  32  Ohio  St.  374,  is  relied  on  by  the 
plaintiff  in  error  as  applicable.  We  do  not  think  so.  It  was  simply 
a  case  where  one  member  of  a  firm  borrowed  money  on  his  individual 
credit  and  that  of  a  surety,  and  afterwards  applied  it  to  the  use  of 
the  firm;  and  such  was  his  purpose  at  the  time  he  borrowed  the 
money.  But  there  was  nothing  to  show  that  the  loan  was  made  on 
the  procurement  of  the  firm,  or  that  the  other  member  was  undis- 
closed. The  member  borrowing  the  money  acted  for  himself,  and 
not  for  the  firm,  nor  at  its  instance. 

In  the  case  of  Bank  v.  Hooper,  5  Gray,  567,  also  relied  on,  it  was 
held  that  a  bank  which  had  discounted  bills  drawn  in  his  own  name 
by  the  agent  of  a  disclosed  principal,  could  not  sue  the  latter,  nor 
prove  against  his  estate  in  insolvency,  although  the  proceeds  were 
applied  by  the  agent  to  the  use  of  the  principal.  This  is  on  the 
principle  before  stated,  that  when  the  principal  is  known  to  the 
creditor,  credit  is  presumed  to  have  been  given  to  the  agent  by 
accepting  his  paper  instead  of  that  of  the  principal ;  and,  in  such 
case,  when  the  suit  is  on  the  paper,  new  parties  cannot  be  added  to 


423  HUNTINGTON   V.   KNOX.  [CHAP.   X. 

it  by  parol.  As  pointed  out  by  counsel,  the  rule  in  Massachusetts 
applicable  to  the  case  before  us  is  stated  in  the  later  case,  Lovell  v. 
Williams,  135  Mass,  430,  where  it  is  held :  "  If  a  person  sells  goods 
to  another,  who  is  an  agent  of  an  undisclosed  principal,  and  takes 
the  note  of  the  purchaser  in  ignorance  of  such  fact,  the  presumption 
that  the  note  was  taken  in  payment  is  rebutted,  and  the  seller  may 
resort  to  the  undisclosed  principal."  This  rule  seems  so  agreeable 
to  the  ordinary  notions  of  justice  that  it  is  quite  difficult  to  perceive 
why  it  should  ever  have  been  questioned. 

Judgment  affirmed. 


EENDELL   v.   HAREIMAN. 

75  Me.  497.     1883. 
[Reported  herein  at  p.  543.] 


6.    Bights  of  Undisclosed  Principal:  General  Rule. 
HUNTINGTON   v.   KNOX. 

7  Cush.  (Mass.)  371.     1851. 

Assumpsit  for  goods  sold  and  delivered.  Award  by  arbitrator 
in  favor  of  plaintiff,  subject  to  the  opinion  of  the  court  on  questions 
of  law. 

George  H.  Huntington  entered  into  the  contract  in  writing  with 
the  defendant.  Plaintiff  offered  to  prove  that  the  bark  was  her 
property,  and  that  George  H.  Huntington  entered  into  the  contract 
in  his  name  as  her  agent.  The  arbitrator  ruled  that  such  parol 
evidence  was  competent,  and  that  the  evidence  established  the  facts 
as  alleged. 

Shaw,  C.  J.  This  action  is  brought  to  recover  the  value  of  a 
quantity  of  hemlock  bark,  alleged  to  have  been  sold  by  the  plaintiff 
to  the  defendant,  at  certain  prices  charged.  The  declaration  was  for 
goods  sold  and  delivered,  with  the  usual  money  counts.  The  case 
was  submitted  to  a  referee  by  a  common  rule  of  the  court,  who  made 
an  award  in  favor  of  the  plaintiff,  subject  to  the  opinion  of  the  court 
on  questions  reserved,  stating  the  facts  in  his  report,  on  which  the 
decision  of  those  questions  depends. 

The  facts  tended  to  show  that  the  bark  was  the  property  of  the 


CHAP.   X.]  RIGHTS   OF   UNDISCLOSED   PRINCIPAL.  423 

plaintiff;  that  the  contract  for  the  sale  of  it  was  made  by  her  agent, 
George  H.  Huntington,  by  her  authority ;  that  it  was  made  in  writing 
by  the  agent,  in  his  own  name,  not  stating  his  agency,  or  naming 
or  referring  to  the  plaintiff,  or  otherwise  intimating,  in  the  written 
contract,  that  any  other  person  than  the  agent  was  interested  in  the 
bark. 

Objection  was  made,  before  the  referee,  to  the  admission  of  parol 
evidence,  and  to  the  right  of  the  plaintiff  to  maintain  the  action  in 
her  own  name.  The  referee  decided  both  points  in  favor  of  the  plain- 
tiff, holding  that  the  action  could  be  maintained  by  the  principal 
and  owner  of  the  property,  subject  to  any  set-off,  or  other  equitable 
defence  which  the  buyer  might  have  if  the  action  were  brought  by 
the  agent. 

The  court  are  of  opinion  that  this  decision  was  correct  upon  both 
points.  Indeed,  they  resolve  themselves  substantially  into  one;  for 
prima  facie,  and  looking  only  at  the  paper  itself,  the  property  is  sold 
by  the  agent,  on  credit;  and  in  the  absence  of  all.  other  proof  a 
promise  of  payment  to  the  seller  would  be  implied  by  law;  and  if 
that  presumption  of  fact  can  be  controverted,  so  as  to  raise  a  promise 
to  the  principal  by  implication,  it  must  be  by  evidence  aliunde, 
proving  the  agency  and  property  in  the  principal. 

It  is  now  well  settled  by  authorities  that  when  the  property  of  one 
is  sold  by  another,  as  agent,  if  the  principal  give  notice  to  the  pur- 
chaser, before  payment,  to  pay  to  himself,  and  not  to  the  agent,  the 
purchaser  is  bound  to  pay  the  principal,  subject  to  any  equities  of 
the  purchaser  against  the  agent. 

When  a  contract  is  made  by  deed  under  seal,  on  technical  grounds, 
no  one  but  a  party  to  the  deed  is  liable  to  be  sued  upon  it;  and, 
therefore,  if  made  by  an  agent  or  attorney,  it  must  be  made  in  the 
name  of  the  principal,  in  order  that  he  may  be  a  party,  because 
otherwise  he  is  not  bound  by  it. 

But  a  different  rule,  and  a  far  more  liberal  doctrine,  prevails  in 
regard  to  a  written  contract  not  under  seal.  In  the  case  of  Higgins 
V.  Senior,  8  M,  &  W.  834,  it  is  laid  down  as  a  general  proposition, 
that  it  is  competent  to  show  that  one  or  both  of  the  contracting 
parties  were  agents  for  other  persons,  and  acted  as  such  agents  in 
making  the  contract  of  sale,  so  as  to  give  the  benefit  of  the  contract, 
on  the  one  hand  to,  and  charge  with  liability  on  the  other,  the  un- 
named principals;  and  this  whether  the  agreement  be  or  be  not 
required  to  be  in  writing,  by  the  Statute  of  Frauds.  But  the  court 
mark  the  distinction  broadly  between  such  a  case  and  a  case  where  an 
agent,  who  has  contracted  in  his  own  name,  for  the  benefit,  and  by 
the  authority,  of  a  principal,  seeks  to  discharge  himself  from  liability, 
on  the  ground  that  he  contracted  in  the  capacity  of  an  agent.  The 
doctrine  proceeds  on  the  ground  that  the  principal  and  agent  may 
each  be  bound :  the  agent,  because  by  his  contract  and  promise  he  has 


424  HUNTINGTON   V.   KNOX.  [CHAP.  X. 

expressly  bound  himself;  and  the  principal,  because  it  was  a  con- 
tract made  by  his  authority  for  his  account.  Paterson  v.  Gandasequi, 
15  East,  62 ;  Magee  v.  Atkinson,  2  M.  &  W.  440 ;  Trueman  v.  Loder, 
11  Ad.  &  El.  589;  Taintor  v.  Prendergast,  3  Hill,  72;  Edwards  v. 
Golding,  20  Vt.  30.  It  is  analogous  to  the  ordinary  case  of  a  dormant 
partner.  He  is  not  named  or  alluded  to  in  the  contract ;  yet  as  the 
contract  is  shown  in  fact  to  be  made  for  his  benefit,  and  by  his 
authority,  he  is  liable. 

So,  on  the  other  hand,  where  the  contract  is  made  for  the  benefit 
of  one  not  named,  though  in  writing,  the  latter  may  sue  on  the  con- 
tract, jointly  with  others,  or  alone,  according  to  the  interest.  Garrett 
V.  Handley,  4  B.  &  C.  664;  Sadler  v.  Leigh,  4  Campb.  195;  Coppin 
V.  Walker,  7  Taunt.  237 ;  Story  on  Agency,  §  410.  The  rights  and 
liabilities  of  a  principal,  upon  a  written  instrument  executed  by  his 
agent,  do  not  depend  upon  the  fact  of  the  agency  appearing  on  the 
instrument  itself,  but  upon  the  facts:  (1)  that  the  act  is  done  in 
the  exercise,  and  (2)  within  the  limits,  of  the  powers  delegated; 
and  these  are  necessarily  inquirable  into  by  evidence.  Mechanics' 
Bank  v.  Bank  of  Columbia,  5  Wheat.  326. 

And  we  think  this  doctrine  is  not  controverted  by  the  authority 
of  any  of  the  cases  cited  in  the -defendant's  argument.  Hastings  v. 
Lovering,  2  Pick.  214,  was  a  case  where  the  suit  was  brought  against 
an  agent,  on  a  contract  of  warranty  upon  a  sale  made  in  his  own 
name.  The  case  of  the  United  States  v.  Parmele,  Paine,  252,  was 
decided  on  the  ground  that,  in  an  action  on  a  written  executory 
promise,  none  but  the  promisee  can  sue.  The  court  admit  that,  on 
a  sale  of  goods  made  by  a  factor,  the  principal  may  sue. 

This  action  is  not  brought  on  any  written  promise  made  by  the 
defendant;  the  receipt  is  a  written  acknowledgment,  given  by  the 
plaintiff  to  the  defendant,  of  part  payment  for  the  bark,  and  it 
expresses  the  terms  upon  which  the  sale  had  been  made.  The  de- 
fendant, by  accepting  it,  admits  the  sale  and  its  terms;  but  the  law 
raises  the  promise  of  payment.  And  this  is  by  implication,  prima 
facie,  a  promise  to  the  agent;  yet  it  is  only  prima  facie,  and  may  be 
controlled  by  parol  evidence  that  the  contract  of  sale  was  for  the  sale 
of  property  belonging  to  the  plaintiff,  and  sold  by  her  authority  to 
the  defendant,  by  the  agency  of  the  person  with  whom  the  defendant 
contracted. 

We  are  all  of  opinion  that  the  provisions  of  Rev.  Sts.  c.  28,  §  301, 
do  not  apply  to  the  sale  of  bark,  as  made  in  this  case. 

Judgment  on  the  award  for  the  plaintiff. 


CHAP.    X.]  RIGHTS   OF   UNDISCLOSED   PRINCIPAL.  425 

POWELL   V.   WADE. 

109  Ala.  95.     1895. 

Action  by  P.  P.  Powell  upon  a  written  contract  for  the  sale  of 
trees  from  his  land  made  between  R.  L.  Powell  and  Wade,  and  an 
account  stated  thereunder.  The  plaintiff  separately  excepted  to  the 
action  of  the  court  in  giving  each  of  the  following  written  charges, 
requested  by  the  defendant :  ( 1 )  "In  order  for  the  plaintiff  to  recover 
on  the  stated  account,  the  jury  must  be  satisfied  from  the  evidence 
that  on  the  10th  day  of  August,  1891,  the  account  was  stated  between 
P.  P.  Powell  and  defendant,  and  not  between  R.  L.  Powell  and 
defendant."  (2)  "The  burden  of  proof  is  on  the  plaintiff  to  show 
that  the  contract  was  made  by  R.  L.  Powell  as  agent  for  his  father, 
and  not  for  himself."  (3)  "If  the  jury  find  from  the  evidence 
that  the  contract  was  made  between  R.  L.  Powell  and  defendant,  and 
that  R.  L.  Powell  undertook  to  sell  the  timber  as  his  own,  then  — 
it  matters  not  whom  the  timber  really  belonged  to  —  the  plaintiff 
cannot  recover  in  this  action,"  From  a  judgment  for  defendant, 
plaintiff  appeals. 

Brickell,  C.  J.  A  principal,  whether  disclosed  or  undisclosed, 
is  bound  by  the  acts  or  contracts  of  the  agent,  within  the  scope  of 
the  authority  conferred.  As  he  is  bound  by  the  contracts,  whether 
oral  or  written,  *though  made  by  and  with  the  agent,  in  his  own  name, 
he  may,  in  his  own  name,  maintain  an  action  thereon.  If  the  con- 
tract is  in  writing,  in  the  name  of  the  agent  alone,  it  is  permissible 
by  parol  to  show  that  in  the  making  of  the  contract  the  agent  was 
acting  for  the  principal.  Such  proof  does  not  contradict  the  writ- 
ing; it  only  explains  the  transaction.  Ford  v.  Williams,  21  How. 
(U.  S.)  287;  Bishop  on  Contracts,  §  1080;  Mechem  on  Agency, 
§  769.  In  such  action,  the  burden  of  proof  lies  on  the  principal  to 
show  the  agency,  and  that  in  the  making  of  the  contract  the  agent 
was  acting  for  him.  This  is  the  proposition  asserted  in  the  second 
instruction  given  at  the  instance  of  the  defendant,  and  in  the  giving 
of  it  there  was  no  error. 

But  the  first  instruction  was  erroneous.  A  count  upon  an  account 
stated  may  be  supported  by  evidence  that  the  account  was  stated 
with  the  agent  of  the  plaintiff,  or  by  admissions  made  to  an  agent. 
2  Green.  Ev.  §  126. 

The  third  instruction  contravenes  the  principle  we  have  stated  — ■ 
that  the  plaintiff,  though  undisclosed  as  the  principal  and  though  the 
agent  may  have  contracted  in  his  own  name,  may,  in  his  own  name, 
maintain  an  action  on  the  contract.    The  instruction  was  erroneous. 

For  the  errors  pointed  out,  the  judgment  must  be  reversed,  and  the 
cause  remanded. 


426  MANKEB  V.   WESTERN   UNION   TELEGRAPH   CO.      [CHAP.   X. 

MANKER  V.   WESTERN  UNION  TELEGRAPH  CO. 

137  Ala.  292.     1902. 

The  plaintiff  was  the  sendee  of  a  message,  which  was  sent  to  her 
by  her  brother,  Frank  Lash,  telling  her  of  the  dying  condition  of 
her  father,  and  summoning  her  to  his  bedside.  There  was  evidence 
introduced  on  the  part  of  the  plaintiff  tending  to  show  that  Frank 
Lash,  the  sender  of  the  message,  was  acting  as  agent  of  the  plaintiff, 
and  for  her  benefit.  The  facts  of  the  case  and  the  substance  of  the 
portions  of  the  court's  oral  charge  to  which  exceptions  were  reserved 
are  sufficiently  set  forth  in  the  opinion. 

The  plaintiff  requested  the  court  to  give  to  the  jury  the  following 
written  charges,  and  separately  excepted  to  the  court's  refusal  to 
give  each  of  them  as  asked:  "  (1)  If  the  jury  believe  the  evidence 
they  will  find  for  the  plaintiff.  (2)  The  court  charges  the  jury  that 
it  was  not  the  duty  of  Frank  Lash  to  inform  the  defendant  company 
of  the  fact  that  in  sending  the  message  described  in  the  complaint, 
if  from  the  evidence  you  believe  that  he  was  acting  as  the  agent  of 
plaintiff,  that  he  was  the  agent  of  plaintiff,  in  order  to  make  the 
defendant  liable  to  plaintiff  in  this  cause." 

There  were  verdict  and  judgment  for  the  defendant.  The  plaintiff 
appeals,  and  assigns  as  error  the  several  rulings  of  the  trial  court  to 
which  exceptions  were  reserved. 

DowDELL,  J.  This  was  an  action  by  the  sendee  of  a  telegraphic 
message.  The  complaint  contained  four  counts.  A  demurrer  was 
sustained  to  the  third  and  fourth  counts  for  a  failure  to  aver  in  said 
counts  that  the  sender  of  the  message  acted  as  the  agent,  or  for  the 
benefit  of  the  plaintiff.  The  counts  were  then  amended  by  averring 
the  agency,  after  which  the  demurrer,  being  renewed,  was  overruled. 

The  facts  averred  in  the  complaint  set  up  a  contract  between  the 
plaintiff  and  the  defendant,  and  the  plea  was  non-assumpsit,  and 
issue  was  taken  on  this  plea.  Whether  the  alleged  breach  was  willful 
or  the  result  of  negligence  would  not  change  the  character  of  the 
action  from  one  ex  contractu  to  one  ex  delicto.  Moreover,  the  parties 
tried  the  case,  and  the  trial  court  so  understood  it  and  treated  it, 
as  an  action  ex  contractu.  The  plaintiff,  having  tried  her  case  on 
one  theory  in  the  court  below,  will  not  be  permitted,  on  appeal  for 
the  purpose  of  putting  the  trial  court  in  error,  to  trj'  her  case  on  an 
entirely  different  theory. 

The  action  being  considered  as  one  ex  contractu,  the  only  question 
raised  by  the  assignments  of  error  upon  exceptions  to  parts  of  the 
oral  charge  of  the  court  and  on  refusal  to  charge  as  requested  by 
plaintiff  in  writing  is  whether  the  principal  may  maintain  an  action 
for  breach  of  contract  made  by  the  agent,  the  principal  not  having 


CHAP.  X.]  same:   as  to  state  of  accounts.  427 

been  disclosed  at  the  time  of  the  making  of  the  contract.  In  the 
cases  of  Western  Union  Telegraph  Co.  v.  Allgood,  125  Ala.  712, 
27  South.  1024,  and  Lucas  v.  So.  By.  Co.,  122  Ala.  529,  25  South. 
219,  it  was  held  that  an  undisclosed  principal  could  not  recover 
damages  for  breach  of  contract  made  by  the  agent.  These  cases  fol- 
lowed and  were  based  upon  expressions  contained  in  Daughtery  v. 
A.  U.  Tel.  Co.,  75  Ala.  168,  51  Am.  Kep.  435;  W.  U.  Tel.  Co.  v. 
Henderson,  89  Ala.  510,  7  South.  419,  18  Am.  St.  Rep.  148 ;  Ken- 
non  &  Bro.  v.  Tel.  Co.,  92  Ala.  399,  9  South.  200;  and  Tel.  Co.  v. 
Wilson,  93  Ala.  32,  9  South.  414,  30  Am.  St.  Rep.  23.  A  review 
of  these  later  cases  leads  us  to  the  conclusion  that  what  was  stated 
in  those  cases  with  regard  to  showing  by  the  proof  that  the  agency 
was  disclosed  was  nothing  more  than  dictum.  Upon  more  mature 
consideration,  we  are  now  unable  to  see  any  sufficient  reason  for  hold- 
ing that  a  principal  may  not  maintain  an  action  on  a  contract  made 
by  his  agent,  though  such  principal  be  not  disclosed  in  the  making 
of  the  contract.  The  above  cases  are  in  conflict,  in  principle  at  least, 
with  the  cases  of  Bell  v.  Reynolds,  78  Ala.  511,  56  Am.  Rep.  52 ;  City 
of  Huntsville  v.  Huntsville  Gas  Co.,  70  Ala.  191,  and  McFadden 
&  Bro.  V.  Henderson  et  al.,  128  Ala.  229,  29  South.  640.  These  latter 
cases,  we  think,  assert  the  correct  rule,  and  the  one  which  we  are  dis- 
posed to  adhere  to.  This  doctrine  seems  to  be  not  only  the  more 
reasonable  rule,  but  also  well  supported  by  authority.  We  are,  there- 
fore, of  the  opinion  that  what  was  said  in  the  cases  of  Daughtery, 
Henderson,  Kennon  &  Bro.,  and  Wilson,  supra,  upon  this  question, 
should  be  disapproved,  and  the  cases  of  x4.11good  and  Lucas,  supra, 
should  be  overruled. 

It  follows  from  this  conclusion  that  the  court  below  erred  in  those 
portions  of  the  general  charge  excepted  to  wherein  the  court  in- 
structed the  jury  that,  unless  tne  agency  was  disclosed  to  the  defend- 
ant at  the  time  of  the  making  of  the  contract,  the  plaintiff  could  not 
recover;  and  also  in  refusing  to  give  written  charge  No.  2  requested 
by  the  plaintiff.    The  judgment  of  the  lower  court  will  be  reversed. 

Reversed  and  remanded. 


7.    Same:  Exception  as  to  State  of  Accounts. 
MONTAGUE   v.   FORWOOD. 

[1893]  2  Q.  B.  (C.  A.)  351. 

Action"  to  recover  a  sum  of  money  alleged  to  have  been  received 
by  the  defendants  to  the  use  of  the  plaintiffs.  Judgment  for 
defendants.     Plaintiffs  appeal. 


428  MONTAGUE    V.    FORWOOD.  [CIIAP.   X. 

Plaintiffs  had  been  engaged  by  the  owners  of  a  cargo  to  collect 
a  general  average  loss  from  underwriters  at  Lloyd's.  They  employed 
a  merchant  firm,  Beyts  &  Craig,  who,  not  being  members  of  Lloyd's, 
employed  defendants  as  brokers.  Defendants  collected  the  loss  and 
claimed  the  right  to  set  off  the  amount  collected  against  a  sum  due 
them  from  Beyts  &  Craig.  Defendants  had  no  notice  that  Beyts  & 
Craig  were  acting  as  agents,  and  believed  them  to  be  principals. 
Beyts  &  Craig  were  adjudged  bankrupt  after  the  money  was  collected. 

Lord  Esher,  M.  R.  I  feel  no  doubt  about  this  case.  The  plaintiffs 
were  directed  by  a  foreign  bank,  who  were  acting  for  the  owners  of 
the  cargo,  to  collect  a  general  average  contribution  from  the  under- 
writers in  England  who  had  insured  against  a  general  average  loss. 
The  plaintiffs  employed  Beyts  &  Craig  to  collect  the  money  from  the 
insurers.  Beyts  &  Craig,  who  are  not  brokers,  in  their  turn  employed 
the  defendants  as  their  agents  to  collect  the  money,  the  defendants 
being  brokers  at  Lloyd's.  Beyts  &  Craig  did  not  tell  the  defendants 
that  they  were  acting  as  agents  for  any  one.  Beyts  &  Craig  were  not 
brokers,  nor  had  they  in  any  way  the  character  of  persons  whose 
business  it  was  to  act  as  agents  for  others.  It  was  found  by  the 
learned  judge  as  a  fact  that  the  defendants  did  not  know  that  Beyts 
&  Craig  were  acting  in  the  matter  as  agents  for  any  one.  The  de- 
fendants accordingly,  acting  as  agents  for  Beyts  &  Craig,  collected  the 
money,  and  at  the  very  time  when  they  did  so  Beyts  &  Craig  were 
indebted  to  them  in  a  larger  amount.  At  that  very  time  the  de- 
fendants had  a  right  of  set-off  as  against  Be3i;s  &  Craig,  though  the 
right  would  not  come  into  play  until  an  action  was  brought.  After 
the  defendants  had  collected  the  money,  and  the  right  of  set-off  had 
accrued,  the  defendants,  not  knowing,  and  having  no  reason  to  sus- 
pect, and  not  in  fact  suspecting,  that  Beyts  &  Craig  were  acting  for 
any  principals,  can  the  plaintiffs  now  intervene  and  say  that  the 
money  belongs  to  them,  and  that  the  defendants  were  not  their  agents, 
and  that  the  defendants  cannot  set  off  as  against  the  plaintiffs  a  debt 
due  to  them  from  Beyts  &  Craig?  The  law  of  bankruptcy  has 
nothing  to  do  with  the  case.  What  is  the  law  which  governs  it?  I 
think  it  was  settled  by  Eabone  v.  Williams,  7  T.  E.  360,  n. ;  George 
V.  Clagett,  7  T.  R.  359 ;  and  Fish  v.  Kempton,  7  C.  B.  687. 

In  Fish  V.  Kempton,  7  C.  B.  at  p.  691,  Wilde,  C.  J.,  said :  "  Where 
goods  are  placed  in  the  hands  of  a  factor  for  sale  and  are  sold  by  him 
under  circumstances  that  are  calculated  to  induce,  and  do  induce, 
a  purchaser  to  believe  that  he  is  dealing  with  his  own  goods,  the 
principal  is  not  permitted  afterwards  to  turn  round  and  tell  the 
vendee  that  the  character  he  himself  has  allowed  the  factor  to  assume 
did  not  really  belong  to  him.  The  purchaser  may  have  bought  for 
the  express  purpose  of  setting  off  the  price  of  the  goods  against  a 
debt  due  to  him  from  the  seller.  But  the  case  is  different  where  the 
purchaser  has  notice  at  the  time  that  the  seller  is  acting  merely  aa 


CHAP.  X.]  same:    as  to  state  op  accounts.       *  4'29 

the  agent  of  another."  And  Cress  well,  J.,  said  (at  p.  693)  :  "  This 
is  an  attempt  to  extend  the  rule  laid  down  in  Rabone  v.  Williams, 
7  T.  R.  360,  n.,  and  George  v.  Clagett,  7  T.  R.  359,  which  has  now 
been  uniformly  acted  upon  for  many  years.  If  a  factor  sells  goods 
as  owner,  and  the  buyer  bona  fide  purchases  them  in  the  belief  that 
he  is  dealing  with  the  owner,  he  may  set  off  a  debt  due  to  him  from 
the  factor  against  a  demand  preferred  by  the  principal.  Lord  Mans- 
field so  lays  down  the  rule  distinctly  in  Rabone  v.  Williams,  7  T.  R. 
360,  n.  '  Where,'  he  says,  '  a  factor,  dealing  for  a  principal,  but 
concealing  that  principal,  delivers  goods  in  his  own  name,  the  person 
contracting  with  him  has  a  right  to  consider  him  to  all  intents  and 
purposes  as  the  principal ;  and,  though  the  real  principal  may  appear 
and  bring  an  action  upon  that  contract  against  the  purchaser  of  the 
goods,  yet  that  purchaser  may  set  off  any  claim  he  may  have  against 
the  factor  in  answer  to  the  demand  of  the  principal.  This  has  been 
long  settled.'  The  distinction  between  a  factor  and  a  broker  has  been 
noticed  by  Abbott,  C.  J.,  and  Bayley,  J.,  in  Baring  v.  Corrie,  2  B. 
&  A.  137." 

In  Fish  V.  Kempton,  7  C.  B.  687,  the  plaintiffs'  goods  had  been  sold 
to  the  defendant  by  a  factor,  that  is,  a  person  whose  business  it  is 
to  sell  in  his  own  name  goods  placed  in  his  hands  for  that  purpose 
by  his  principal;  but  the  same  principle  applies  to  any  one  who  is 
authorized  to  sell  goods,  or  to  receive  money  for  his  principal,  when 
there  is  nothing  to  lead  the  person  who  deals  with  him  to  suppose, 
and  he  does  not  in  fact  know,  that  he  is  acting  as  an  agent.  When 
a  person  who  sells  goods  is  known  by  the  purchaser  to  be  a  broker, 
that  is,  an  agent,  the  case  is  entirely  different;  the  purchaser  cannot 
then  set  off  a  debt  due  to  him  from  the  broker  against  the  demand 
of  the  principal.  Beyts  &  Craig  were  not  brokers,  and  the  defendants 
had  no  reason  for  supposing  that  they  were  acting  for  a  principal. 
They  acted  as  if  the  moneys  to  be  collected  would,  when  collected, 
belong  to  themselves.  It  is  found  as  a  fact  by  the  learned  judge  that 
the  defendants  did  not  know  that  Beyts  &  Craig  were  acting  for  a 
principal.  That  being  so,  they  had  a  right  at  the  moment  when  they 
received  the  money  to  set  off  against  it  a  debt  due  to  them  by  Beyts 
&  Craig,  and  if  the  plaintiffs  could  now  intervene,  they  would  be 
taking  away  from  the  defendants  a  valid  and  existing  right. 

BowEN,  L.  J.  I  am  of  the  same  opinion.  The  Master  of  the  Rolls 
has  so  clearly  expressed  the  law  on  the  subject  that  I  have  really 
nothing  to  add,  beyond  saying  that  I  concur  in  his  view.  The  case 
is,  in  my  judgment,  governed  by  principles  of  the  decision  in  George 
V.  Clagett,  7  T.  R.  359,  by  the  rules  of  common  sense  and  justice, 
and  I  think  also  by  the  law  of  estoppel.  The  principle  is  not  confined 
to  the  sale  of  goods.  If  A.  employs  B.  as  his  agent  to  make  any  con- 
tract for  him,  or  to  receive  money  for  him.  and  B.  makes  a  contract 
with  C,  or  employs  C.  as  his  agent,  if  B.  is  a  person  who  would 


430  BELFIELD   V.    NATIONAL   SUPPLY   CO.  [CHAP.   X- 

reasonably  be  supposed  to  be  acting  as  a  principal,  and  is  not  known 
or  suspected  by  C.  to  be  acting  as  an  agent  for  any  one,  A.  cannot 
make  a  demand  against  C.  without  the  latter  being  entitled  to  stand 
in  the  same  position  as  if  B.  had  in  fact  been  a  principal.  If  A.  has 
allowed  his  agent  B.  to  appear  in  the  character  of  a  principal  he  must 
take  the  consequences.  Here  Beyts  &  Craig  were  allowed  by  the 
plaintiffs  to  deal  with  the  defendants  as  if  they  had  been  dealing  on 
their  own  account,  and  the  defendants  who  dealt  with  Beyts  &  Craig 
are  entitled  to  stand  in  the  position  in  which  they  would  have  stood 
if  Beyts  &  Craig  had  really  been  dealing  as  principals. 
(BLat,  L.  J.,  also  delivered  a  concurring  opinion.) 

Appeal  dismissed. 


BELFIELD  v.  NATIONAL  SUPPLY  CO. 

189  Pa.  St.  189.     1899. 

Dickson  &  Kerr  sometimes  dealt  as  principals  or  jobbers  and 
sometimes  as  agents  or  brokers,  and  they  had  dealt  in  both  ways  with 
defendant.  They  had  previously  sold  to  defendant  goods  which  they 
purchased  of  plaintiff  and  which  were  shipped  to  defendant  from 
plaintiff's  works.  As  a  result  of  various  transactions  they  owed 
defendant  about  $1,500.  In  this  state  of  affairs  defendant  gave 
Dickson  &  Kerr  an  order  for  certain  goods.  They  ordered  plaintiff 
to  supply  the  goods  and  charge  the  same  to  defendant,  intending  to 
receive  from  plaintiff  a  selling  commission  as  agents.  Plaintiff  sent 
the  goods  in  different  shipments,  and  after  a  part  were  delivered 
notified  the  defendant  that  the  goods  were  charged  to  it.  Defendant 
replied  that  the  goods  had  been  ordered  of  Dickson  &  Kerr,  not  of 
plaintiff,  but  nevertheless  retained  the  goods  and  received  and  re- 
tained the  subsequent  shipments,  and  credited  Dickson  &  Kerr's 
account  with  the  full  amount.  Plaintiff  sued  for  the  price  of  the 
goods  and  obtained  a  judgment  in  full. 

Opinion  by  Mr.  Justice  Mitchell.  That  defendant  deal  with 
Dickson  &  Kerr  as  principals  is  clear  from  the  whole  course  of  their 
previous  transactions.  The  fact  that  Dickson  &  Kerr  also  did  busi- 
ness as  brokers  was  immaterial  unless  defendant  gave  orders  to  them 
as  such.  One  who  gives  an  order  for  goods  to  A.  cannot  have  it 
transferred  by  A.  to  B.  without  the  buyer's  knowledge  and  consent. 
And  even  if  it  turns  out  that  A.  was  all  the  time  only  agent  for  B. 
as  an  undisclosed  principal,  yet  B.'s  rights  under  the  contract  will  be 
limited  by  the  rights  which  the  buyer  has  in  good  faith  acquired 
against  A.  while  dealing  with  him  as  principal.  Frame  v.  Coal  Co., 
97  Pa.  309.     Whether,  therefore,  Dickson  &  Kerr  be  regarded  as 


CHAP.   X.]  SAME:     AS   TO   STATE  OP  ACCOUNTS.  431 

dealers  on  their  own  account  who  turned  over  defendant's  order  to 
plaintiff,  or  as  agents  of  the  plaintiff,  an  undisclosed  principal,  the 
rights  of  the  parties  were  fixed  by  the  original  contract  growing  out 
of  the  order,  and  could  not  be  changed  without  the  introduction  of 
new  facts  and  circumstances.  Dickson  &  Kerr  being  in  debt  to 
defendant  on  the  previous  dealings,  defendant  had  the  right  as 
against  them  to  get  its  debt  paid  and  the  accounts  balanced  by  order- 
ing goods  from  them  in  the  regular  course  of  their  prior  business, 
and  if  the  goods  were  sent,  received  and  charged  by  defendant  before 
knowledge  of  any  other  title  than  that  of  Dickson  &  Kerr,  the  trans- 
action was  closed,  and  defendant  was  not  liable  to  plaintiff.  That 
is  a  risk  which  every  undisclosed  principal  runs  as  against  those  who 
deal  with  his  agent  as  the  real  owner. 

But  if  before  the  goods  were  received,  the  defendant  had  notice  of 
plaintiff's  ownership,  then  defendant  was  bound  to  elect  either  to 
refuse  the  goods  or  to  take  them  as  the  property  of  plaintiff,  and 
keeping  them  would  be  an  assumption  of  the  liability  to  pay  plain- 
tiff for  them,  whether  it  be  regarded  as  a  ratification  of  the  transfer 
of  the  order  from  Dickson  &  Kerr  or  an  acknowledgment  of  the 
plaintiff  as  the  true  principal  now  disclosed. 

The  exact  date  of  such  notice  to  defendant  and  the  precise  status 
of  the  goods  and  accounts  at  that  time  are  not  clear  on  the  evidence 
as  it  now  stands.  Each  party  asked  a  direction  for  a  verdict  as  matter 
of  law;  plaintiff  on  the  ground  that  the  orders  had  been  given  to 
him  by  Dickson  &  Kerr  as  brokers,  and  the  goods  shipped  to  and 
received  by  defendant,  and  being  plaintiff's  property  in  fact,  must 
be  paid  for  by  defendant  without  reference  to  its  dealings  with 
Dickson  &  Kerr;  defendant  on  the  other  hand  standing  on  the  state 
of  the  case  at  the  time  it  ordered  the  goods  from  Dickson  &  Kerr 
without  reference  to  the  time  of  delivery.  Both  claims  were  too 
broad.  Defendant  was  right  as  to  its  original  status  on  its  order 
to  Dickson  &  Kerr,  and  as  to  all  goods  received,  receipted  for,  or 
credited  to  Dickson  &  Kerr  before  notice  of  plaintiff's  title.  But  such 
notice  terminated  its  rights  in  that  aspect,  and,  as  already  said,  it  was 
bound  to  refuse  all  goods  subsequently  delivered  or  account  for  them 
to  plaintiff.  The  time  of  notice  being  received,  and  the  deliveries 
of  the  goods  before  and  after,  were  the  crucial  points  of  the  case. 
Some  of  the  goods  appear  to  have  been  received  before  notice,  some 
admittedly  after  it,  some  of  the  acts  and  correspondence  of  defendant 
look  like  ratification  of  the  order  as  coming  directly  from  defendant 
to  plaintiff,  some  of  them  tend  to  the  contrary.  These  questions 
therefore  should  have  been  sent  to  the  jury. 

Judgment  reversed  and  venire  de  novo  awarded. 


432  BAXTER   V.   8HEEMAN.  [CHAP.   X. 

BAXTER   V.   SHERMAN. 
73  Minn.  434.     1898. 

Action  for  purchase  price  of  goods.  Juc^gment  for  defendant. 
From  an  order  denying  a  motion  for  a  new  trial  plaintiffs  appeal. 

Mitchell,  J.  One  Shea  was,  to  the  knowledge  of  the  defendant, 
a  commission  merchant  or  factor,  who  sold,  on  account  of  the  con- 
signors, fruit  and  produce  consigned  to  him  by  others;  but,  at  the 
same  time,  he  dealt  on  his  own  account  in  the  same  kind  of  property. 
The  defendant  was  a  dealer  on  his  own  account  in  the  same  city,  in 
the  same  kind  of  property.  The  plaintiffs  were  engaged  in  the  fruit 
and  produce  business  at  Nauvoo,  111.,  and  had  for  years  been  in  the 
habit  of  shipping  such  property  to  Shea  as  their  agent,  to  be  by  him 
sold  on  their  accoimt,  and  to  remit  to  them  the  proceeds,  less  his 
commissions.  For  this  purpose,  in  August,  1896,  they  shipped  to 
him  a  consignment  of  fruit.  Shea  sold  the  fruit  to  the  defendant  on 
August  21st.  There  was  no  express  agreement  between  Shea  and  the 
defendant  for  any  credit,  but  the  purchase  price  was  not  paid  at 
the  time  of  the  delivery  of  the  fruit,  the  custom  of  those  in  the  trade 
in  Minneapolis  being  to  settle  accounts  between  themselves  once  a 
week.  On  August  22d,  Shea  and  defendant  had  a  settlement,  in 
which  the  price  of  plaintiffs'  fruit  was  applied  upon  or  offset  against 
an  individual  debt  due  from  Shea  to  the  defendant,  contracted  on 
August  18th  or  19th.  This  debt  had  no  sort  of  connection  with  the 
sale  of  plaintiffs'  fruit.  On  August  26th,  Shea,  being  insolvent,  made 
an  assignment  for  the  benefit  of  his  creditors.  He  has  never  accounted 
to  the  plaintiffs  for  the  proceeds  of  their  fruit,  and  defendant  has 
never  paid  for  the  same  unless  by  applying  the  price,  as  above  stated, 
upon  the  debt  which  Shea  owed  him.  Plaintiffs  brought  this  action 
to  recover  the  price  of  the  fruit. 

As  factors  or  commission  merchants  may  sell  in  their  own  name 
the  goods  of  their  principals,  we  shall  assume,  although  there  is  no 
express  finding  to  that  effect,  that  Shea  sold  this  fruit  without  dis- 
closing the  name  of  his  principal  or  stating  whether  this  property 
belonged  to  himself  or  to  another.  The  evidence,  as  well  as  the 
finding,  is  to  the  effect  that  defendant  knew  that,  while  Shea  sold  fruit 
and  pro&uce  on  his  own  account,  he  was  also  engaged  in  the  business 
of  selling  it  as  factor  or  agent  for  others  who  consigned  it  to  him 
for  sale  on  their  account.  Therefore,  under  the  circumstances,  a  sale 
by  Shea  in  his  own  name  to  the  defendant  was  not  the  equivalent 
of  a  statement  that  he  was  selling  on  his  own  account.  On  the  con- 
trary, it  amounted  only  to  an  assurance  that  the  fruit  was  either  his 
own  property  or  the  property  of  some  principal  who  had  employed 
him  to  sell.    With  this  knowledge  of  the  equivocal  relation  of  Shea 


CHAP.  X.]  same:   as  to  state  op  accounts.  433 

to  the  property,  and  with  actual  knowledge  that  it  had  been  shipped 
to  Shea  by  somebody  (for  defendant  himself  took  the  fruit  out  of  the 
car  in  which  it  had  been  transported  from  Nauvoo,  and  paid  the  rail- 
road freight),  the  defendant,  so  far  as  appears,  made  no  inquiry 
whatever  of  Shea  or  any  one  else  as  to  whose  property  it  was,  or 
whether  Shea  was  acting  for  himself  or  for  a  principal. 

The  court  found  that  defendant  had  no  knowledge  or  information 
of  any  claims  of  plaintiffs  in  or  to  the  property  until  after  the  settle- 
ment with  Shea.  This  may  be,  and  probably  is,  technically  and  liter- 
ally supported  by  the  evidence,  but,  as  will  be  seen  hereafter,  is 
wholly  insuflficient  to  entitle  the  defendant  to  offset  his  debt  against 
Shea  against  plaintiffs'  demands  for  the  price  of  their  property. 

It  is  not  important  that  the  purchaser  from  a  factor  did  not  know 
who  the  principal  was  if  he  knows,  or  is  chargeable  with  notice,  that 
the  property  belongs  to  a  principal,  and  not  to  the  factor.  It  is  well 
settled  by  an  almost  unbroken  line  of  authorities,  from  George  v. 
Clagett,  7  Term  R.  359,  down,  that  if  the  owner  of  goods  intrusts 
them  to  an  agent  with  authority  to  sell  in  his  own  name,  without 
disclosing  the  name  of  his  principal,  and  the  agent  sells  in  his  own 
name  to  one  who  knows  nothing  of  any  principal,  but  honestly  be- 
lieves that  the  agent  is  selling  on  his  own  account,  he  may  set  off 
any  demand  he  may  have  on  the  agent  against  the  demand  for  the 
goods  made  by  the  principal.  This  set-off  need  not  exist  at  the  time 
of  the  sale.  It  is  sufficient  if  it  arise  before  notice  of  the  real 
ownership  of  the  goods. 

As  applied  to  factors,  this  rule  might  seem  at  first  to  be  incon- 
sistent with  the  equally  well  settled  doctrine,  so  much  relied  on  by 
the  plaintiffs,  that  a  factor  or  commission  merchant  has  no  power  to 
pledge  his  principal's  goods  for  his  own  benefit ;  that  such  an  act  ia 
tortious  and  void  as  against  the  principal;  and  that,  too,  without 
regard  to  the  pledgee's  ignorance  of  the  fact  that  the  factor  was  not 
the  real  owner  of  the  property.    See  Wright  v.  Solomon,  19  Cal.  64. 

But  both  rules  are  equally  well  settled ;  and  we  apprehend  that  the 
distinguishing  feature  between  the  two  is  that  a  sale  of  the  priucipars 
goods  in  the  name  of  the  factor  is  within  the  implied  actual  authority 
of  the  latter,  while  a  pledge  is  not.  The  rule  referred  to  in  the  case 
of  sale  rests  upon  the  doctrine  of  equitable  estoppel,  and  is  merely 
an  application  of  the  familiar  principle  that,  where  one  of  two  inno- 
cent persons  must  suffer  by  the  fraud  of  a  third,  the  loss  should  fall 
upon  him  whose  act  or  negligence  enabled  the  third  person  to  commit 
the  fraud. 

But  this  rule  should  not  be  extended  beyond  the  reason  or  prin- 
ciple upon  which  it  is  founded.  It  was  never  intended  to  be  used 
as  a  shield,  so  as  to  make  every  right  of  the  real  owner  subordinate 
to  the  right  of  a  third  party,  dealing  with  the  agent,  to  gain  every 
possible  advantage  of  the  transaction.    Hence,  where  an  agent  sells  in 

28 


434  BAXTER   V.   SHEEMAN.  [CHAP.   X. 

his  own  name  for  an  undisclosed  principal,  and  the  principal  sues  the 
buyer  for  the  price,  the  buyer  cannot  set  off  a  debt  due  from  the  agent 
unless  in  making  the  purchase  he  was  induced  by  the  conduct  of  the 
principal  to  believe,  and  did  in  fact  believe,  that  the  agent  was  selling 
on  his  own  account.  The  rule  of  George  v.  Clagett  does  not  obtain 
where  the  purchaser  knows  that  the  agent  is  not  the  owner  of  the 
goods  or  when  circumstances  are  brought  to  his  knowledge  which 
ought  to  have  put  him  upon  inquiry,  and  by  investigating  which  he 
would  have  ascertained  that  the  agent  was  not  the  owner.  Where,  as 
in  this  case,  the  character  of  the  selling  is  equivocal,  and,  as  was 
known  to  the  defendant.  Shea  was  in  the  habit  of  selling,  sometimes 
on  his  OTvn  account,  and  sometimes  as  agent,  it  was  incumbent  on 
defendant,  if  he  desired  to  avail  himself  of  a  set-off,  to  inquire  in 
what  character  Shea  was  acting  in  that  particular  transaction,  and 
if  he  chose  to  make  no  inquiry,  and  it  turned  out,  as  it  did,  that  he 
bought  of  an  undisclosed  principal,  he  ought  not  to  be  allowed  the 
benefit  of  any  set-off. 

Defendant  had  sufficient  information  to  advise  him  that  it  was 
quite  as  likely  that  Shea  was  acting  as  factor  as'that  he  was  acting  for 
himself.  This  was  of  itself  enough  to  put  him  upon  inquiry,  not  as 
to  Shea's  authority  to  sell,  but  as  to  his  own  right  of  set-off  if  he 
desired  to  buy  with  a  view  of  covering  his  own  debt  or  availing  him- 
self of  a  set-off.  Presumably,  if  he  had  inquired  of  Shea,  he  would 
have  been  informed  that  Shea  was  acting  merely  as  agent  for  another. 
Should  Shea  have  refused  to  inform  him  whether  he  was  acting  for 
himself  or  for  a  principal,  defendant  could  have  declined  to  make  the 
purchase.  Knowing  what  he  did,  and  having  entered  into  the  trans- 
action without  inquiry,  defendant  could  have  had  no  honest  or  rea- 
sonable belief  one  way  or  the  other  as  to  the  ownership  of  the 
property;  and  under  these  circumstances  he  can  have  no  right,  as 
against  the  demand  of  the  plaintiffs,  to  insist  on  a  set-off  or  upon 
the  attempted  application  of  the  purchase  price  of  their  fruit  on 
his  claim  against  Shea. 

Without  attempting  to  cite  or  review  the  authorities  on  this  subject, 
we  merely  refer  to  the  notes  to  George  v.  Clagett,  2  Smith,  Lead. 
Cas.  1359,  where  most  of  the  authorities,  both  American  and  English, 
are  referred  to;  and  to  Cooke  v.  Eshelby,  12  App.  Cas.  271,  where 
the  subject  is  fully  discussed  and  all  the  English  cases  reviewed. 

Our  conclusion  is  that  the  findings  of  fact  were  not  sufficient  to 
justify  the  conclusions  of  law,  and  that  the  evidence  would  not  have 
justified  any  findings  which  would  have  entitled  the  defendant  to 
prevail. 

The  defendant  was  permitted,  under  the  objection  and  exception 
of  the  plaintiffs,  to  introduce  evidence  of  a  local  custom  in  Minne- 
apolis among  those  engaged  in  the  fruit  and  produce  business,  such 
as  Shea  and  defendant  were  engaged  in,  of  running  weekly  accounts 


CHAP.  X.]     same:  where  exclusive  credit  is  given.  435 

I 

on  cash  sales,  instead  of  paying  spot  cash  on  each  transaction,  and  then 
making  weekly  payments  and  settlements,  in  which  they  allowed 
and  offset  against  each  other  all  bills  accruing  during  the  past  week, 
and,  in  short,  having  a  sort  of  weekly  clearance  between  themselves, 
in  which  they  balanced  and  offset  all  outstanding  bills  between  them- 
selves, without  regard  to  whether  such  bills  were  due  to  or  from  them 
as  factors  or  principals. 

This  evidence  was  clearly  immaterial  and  incompetent  for  any  pur- 
pose. This  so-called  "  custom  "  was  an  arrangement  among  the  local 
dealers  solely  for  their  own  convenience,  which  they  acted  on  entirely 
in  reliance  upon  the  financial  responsibility  of  each  other.  If,  in  the 
absence  of  any  such  custom,  defendant  would  have  no  right  to  apply 
the  price  of  plaintiffs'  fruit  on  the  individual  debt  of  Shea,  the  cus- 
tom could  give  him  no  such  right;  for  the  effect  of  such  a  cu^om 
would  be  to  permit  an  agent  to  appropriate  his  principal's  property 
to  the  payment  of  his  own  debt,  which  would  be  contrary  to  well- 
established  principles  of  law  as  well  as  good  morals.  Therefore  such 
a  custom  would  be  void. 

Moreover,  no  evidence  was  introduced  or  offered  that  plaintiffs  had 
any  knowledge  of  the  alleged  custom;  and  nothing  is  better  settled 
than  that  a  local  custom,  even  if  valid,  is  operative  only  in  respect  to 
those  who  are  shown  to  have  knowledge  of  it;  and  there  can  be  no 
presumption  that  a  stranger  living  in  Illinois  had  any  knowledge 
of  a  local  custom  in  Minneapolis.  It  is  doubtless  true  that,  where 
the  owner  of  property  consigns  it  for  sale  to  a  factor,  it  is  within  the 
implied  or  apparent  authority  of  the  factor  to  conform  to  any  general 
and  uniform  custom  of  the  place  to  which  the  property  is  consigned 
as  to  the  terms  or  conditions  of  sale,  whether  the  consignor  knew  of 
the  custom  or  not ;  but  the  custom  here  sought  to  be  proved  does  not 
come  within  any  such  principle. 

Order  reversed,  and  a  new  trial  granted. 


8.    Same:  Exception  where  Exclusive  Credit  is  given  to  Agent 
WINCHESTEK   v.   HOWARD. 

97  Mass.  303.     1867. 

Contract  for  the  price  of  a  pair  of  oxen  alleged  to  have  been  pur- 
chased by  the  defendant  of  the  plaintiffs.  Judgment  for  plaintiffs. 
Defendant  alleged  exceptions. 

Defendant  offered  to  prove  that  one  Smith  claimed  to  be  the  owner 
of  the  oxen,  and  represented  that  plaintiffs  had  no  interest  in  them ; 
that  relying  upon  this  representation  defendant  purchased  the  oxen 


436  WINOHESTEE  V.   HOWARD.  [CHAP.    X. 

of  Smith,  and  that  as  soon  as  he  learned  that  the  representation  was 
false  he  returned  the  oxen  to  Smith,  who  refused  to  receive  them, 
and  offered  defendant  a  bill  of  sale  in  plaintiffs'  name,  which  offer 
defendant  declined;  that  defendant  would  not  willingly  have  any 
dealings  with  plaintiffs,  and  had  for  some  years  refused  to  deal  with 
them.  This  proof  the  court  ruled  would  not  constitute  a  defence, 
and  directed  a  verdict  for  plaintiffs. 

Chapman,  J.  The  court  are  of  the  opinion  that  it  should  have 
been  left  to  the  jury  in  this  case  to  determine  whether  the  minds 
of  the  parties  really  met  upon  any  contract,  and  if  so,  what  the 
contract  was. 

It  is  true  that  an  agent  may  sell  the  property  of  his  principal 
without  disclosing  the  fact  that  he  acts  as  an  agent,  or  that  the 
property  is  not  his  own;  and  the  principal  may  maintain  an  action 
in  his  own  name  to  recover  the  price.  If  the  purchaser  says  nothing 
on  the  subject,  he  is  liable  to  the  unknown  principal.  Huntington 
V.  Knox,  7  Cush.  371.  But  on  the  other  hand,  every  man  has  a  right 
to  elect  what  parties  he  will  deal  with.  As  was  remarked  by  Lord 
Denman  in  Humble  v.  Hunter,  3  Q.  B.  310,  "  You  have  a  right 
to  the  benefit  you  contemplate  from  the  character,  credit,  and  sub- 
stance of  the  person  with  whom  you  contract.''  There  may  be  good 
reasons  why  one  should  be  unwilling  to  buy  a  pair  of  oxen  that  has 
been  owned  or  used,  or  were  claimed  by  a  particular  person,  or  why 
he  should  be  unwilling  to  have  any  dealings  with  that  person ;  and  as 
a  man's  right  to  refuse  to  enter  into  a  contract  is  absolute,  he  is  not 
obliged  to  submit  the  validity  of  his  reasons  to  a  court  or  jury. 

In  this  case  it  appears  that  Smith,  the  plaintiffs'  agent,  told  the 
defendant  that  he  had  a  pair  of  oxen  for  sale  (referring  to  the  oxen 
in  question),  and  that  another  pair  belonging  to  one  Blanchard  were 
in  his  possession,  which  pair  he  was  authorized  to  sell.  A  jury  might 
properly  find  that  this  amounted  to  a  representation  that  the  oxen 
in  question  were  his  own.  The  defendant  then  made  inquiries,  in 
answer  to  which  Smith  affirmed  that  the  oxen  had  never  been  hurt; 
that  the  plaintiffs  had  no  mortgage  upon  them,  and  that  there  was  no 
claim  upon  them  except  the  claim  which  Smith  had.  A  jury  might 
properly  find  that  this  was,  in  substance,  a  representation  that  the 
title  to  the  oxen  was  exclusively  in  Smith,  and  that,  as  the  defendant 
was  unwilling  to  deal  with  the  plaintiffs,  he  made  proper  inquiries 
on  the  subject,  and  was  led  by  Smith  to  believe  he  was  not  dealing 
with  the'  plaintiffs.  The  defendant  took  the  cattle  home  with  an 
agreement  that  he  might  return  them  "  if  he  did  not  find  things  as 
Smith  had  told  him."  In  the  course  of  the  evening  he  was  informed 
that  the  cattle  belonged  to  the  plaintiffs,  and  being  unwilling  to  buy 
oxen  of  them,  he  returned  them  to  Smith  the  next  morning  before 
any  bill  of  sale  had  been  made.  The  jury  would  be  authorized  to 
find  that  he  returned  them  within  the  terms  of  the  condition  upon 


CHAP.   X.]  AS   TO   VAKYING   WRITTEN   INSTRUMENT.  437 

which  he  took  them,  because  he  did  not  find  things  as  Smith  had  told 
him.  It  is  thus  apparent  that  upon  the  whole  evidence  they  would  be 
justified  in  finding  a  verdict  for  the  defendant. 

Exceptions  sttstained. 


9.    Same:  Exception  as  to  Varying  Written  Instrument. 

HUMBLE   V.   HUNTEB. 
12  Q.  B.  310.     1848. 

Assumpsit  on  a  charter-party.  Judgment  for  plaintiff.  The  court 
granted  a  rule  nisi,  upon  a  motion  for  a  new  trial. 

The  charter-party  was  not  signed  by  plaintiff,  but  by  her  son, 
C.  J.  Humble,  and  contained  this  clause :  "  It  is  .  .  .  mutually 
agreed  between  C.  J.  Humble,  Esq.,  owner  of  the  good  ship  or  vessel 
called  The  Ann,  .  .  .  and  Jameson  Hunter,"  etc.  C.  J.  Humble 
was  offered  as  a  witness  to  prove  that  plaintiff  was  the  true  owner  of 
the  vessel,  and  that  he  had  signed  as  her  agent.  This  was  objected 
to  on  the  ground  that  one  who  has  expressly  signed  as  principal  can- 
not testify,  in  contradiction  to  the  written  instrument,  that  he  signed 
as  agent.    The  evidence  was  received,  and  this  was  alleged  as  error. 

Lord  Denman,  C.  J.  We  were  rather  inclined  at  first  to  thinic 
that  this  case  came  within  the  doctrine  that  a  principal  may  come 
in  and  take  the  benefit  of  a  contract  made  by  his  agent.  But  that 
doctrine  cannot  be  applied  where  the  agent  contracts  as  principal; 
and  he  has  done  so  here  by  describing  himself  as  "owner''  of  the 
ship.    The  language  of  Lord  Ellenborough  in  Lucas  v.  De  la  Cour, 

1  M.  &  S.  249,  "  If  one  partner  makes  a  contract  in  his  individual 
capacity,  and  the  other  partners  are  willing  to  take  the  benefit  of 
it,  they  must  be  content  to  do  so  according  to  the  mode  in  which  the 
contract  was  made,"  is  very  apposite  to  the  present  case. 

Patteson,  J.  The  question  in  this  case  tiims  on  the  form  of  the 
contract.  If  the  contract  had  been  made  in  the  son's  name  merely, 
without  more,  it  might  have  been  shown  that  he  was  the  agent  only, 
and  that  the  plaintiff  was  the  principal.  But,  as  the  document  itself 
represents  that  the  son  contracted  as  "  owner,"  Lucas  v.  De  la  Cour 
applies.  There  the  partner  who  made  the  contract  represented  that 
the  property  which  was  the  subject  of  it  belonged  to  him  alone.  The 
plaintiff  here  must  be  taken  to  have  allowed  her  son  to  contract  in 
this  form,  and  must  be  bound  by  his  act.    In  Robson  v.  Drummond, 

2  B.  &  Ad.  303,  where  Sharpe,  a  coach-maker,  with  whom  Robson 
was  a  dormant  partner,  had  agreed  to  furnish  the  defendant  with 
a  carriage  for  five  years  at  a  certain  yearly  sum,  and  had  retired  from 
the  business,  and  assigned  all  his  interest  in  it  to  C.  before  the  end 


438  ABBOTT   V.   ATLANTIC   REFINING    CO.  [CHAP.    X. 

oi  the  first  three  years,  it  was  held  that  an  action  could  not  be  main- 
tained by  the  two  partners  against  the  defendant,  who  returned  the 
carriage,  and  refused  to  make  the  last  two  yearly  payments.  In  this 
case  I  was  at  first  in  the  plaintiff's  favor,  on  account  of  the  general 
principle  referred  to  by  my  Lord ;  but  the  form  of  the  contract  takes 
the  case  out  of  that  principle. 

WiGHTMAN.  J.  I  thought  at  the  trial  that  this  case  was  governed 
by  Skinner  v.  Stocks,  4  B.  &  Aid.  437.  But  neither  in  that  nor  in 
any  case  of  the  kind  did  the  contracting  party  give  himself  any  special 
description,  or  make  any  assertion  of  title  to  the  subject-matter  of 
the  contract.  Here  the  plaintiff  describes  himself  expressly  as 
"  owner "  of  the  subject-matter.  This  brings  the  case  within  the 
principle  of  Lucas  v.  De  la  Cour,  and  the  American  authorities  cited. 

Lord  Denman,  C.  J.  Bobson  v.  Drummond,  2  B.  &  Ad.  303, 
which  my  Brother  Patteson  has  cited,  seems  the  same,  in  principle, 
with  the  present  case.  You  have  a  right  to  the  benefit  you  contem- 
plate from  the  character,  credit,  and  substance  of  the  party  with 
whom  you  contract. 

Coleridge,  J.,  having  heard  the  argument  for  the  defendant  only, 
gave  no  judgment.  Rule  absolute. 


ABBOTT   V.   ATLANTIC   REFINING    CO. 

4  Ont.  L.  Rep.  701.     1902. 

Action  on  the  following  guarantee  by  defendants  addressed  to 
George  A.  Abbott :  "  We  hereby  guarantee  that  your  roof,  completed 
under  instructions  from  us  by  Mr.  S.  D.  Eplett  of  your  town,  will 
remain  waterproof  for  a  period  of  five  years  from  date.  In  the  event 
of  said  roof  leaking  at  any  time  within  the  above  mentioned  time, 
we  hereby  agree  to  repair  same  at  our  expense." 

The  action  was  first  brought  by  George  A.  Abbott,  but  Mary  S. 
Abbott,  his  wife,  as  owner  of  the  building,  was  afterwards  joined  as 
co-plaintiff.  Judgment  was  given  for  both  plaintiffs  for  $200  with 
leave  to  divide  it  as  they  might  think  proper,  or,  if  they  could  not 
agree,  one-third  to  the  husband  and  two-thirds  to  the  wife.  George 
A.  Abbott  occupied  a  portion  of  the  building  as  tenant  of  his  wife 
for  a  barber  shop ;  she  occupied  another  portion  for  a  shop ;  and  both 
occupied  another  part  as  a  dwelling.  The  building,  and  goods  be- 
longing to  each  plaintiff,  were  damaged  by  water  from  the  defective 
roof.    Other  facts  appear  in  the  opinion. 

Street,  J.  Mrs.  Abbott  was  erecting  the  building  in  question 
upon  her  own  land  for  herself;  her  husband  was  acting  as  her  agent 
in  making  the  contracts  for  its  erection,  and  superintending  the  work 
done  on  her  behalf,  but  had  no  personal  interest  in  it. 


CHAP.  X.]  AS  TO  VARYING  WRITTEN   INSTRUMENT.  439 

The  defendants  became  aware  that  a  roof  was  to  be  put  on,  and 
wrote  the  husband  that  in  order  to  introduce  their  roofing  material 
into  "  your  town/'  they  would  put  on  "  your  roof  "  for  a  fixed  price. 
To  this  he  replied  in  his  own  name,  accepting  their  offer  to  put  on 
"  my  roof ; "  and  thereupon  they  gave  the  guarantee  now  sued  on,  in 
which  they  refer  to  the  roof  as  "  3'our  roof ; "  again,  as  it  happens, 
also  speaking  in  the  same  sentence,  of  "your  town." 

It  is  argued  that  to  permit  evidence  showing  that  the  husband  was 
acting  merely  as  agent  for  the  wife  would  be  to  allow  him  to  contra- 
dict the  writings  in  which  he  describes  the  roof  as  his. 

The  case  certainly  comes  very  near  to  the  decisions  of  Lucas  v. 
De  la  Cour  (1813),  1  M.  &  S.  249,  and  Humble  v.  Hunter,  12  Q.  B. 
310,  but  I  do  not  think  it  comes  within  them. 

In  Lucas  v.  De  la  Cour  there  was  an  absolute  statement  that  the 
goods  in  the  question  were  the  sole  property  of  one  partner,  and  that 
he  had  acquired  the  interest  of  his  co-partners  in  them,  and  it  was 
held  that  this  statement  prevented  them  from  asserting  a  joint 
ownership  as  against  the  other  party  to  the  contract. 

In  Humble  v.  Hunter  there  was  a  written  statement  on  the  face  of 
the  charter-party  that  the  plaintiff's  son  was  "  owner "  of  the  good 
ship  Ann,  and  it  was  held  that  the  plaintiff  could  not,  in  an  action 
for  freight  and  demurrage  under  the  charter-party,  give  evidence 
that  she,  and  not  her  son,  was  "owner"  of  the  vessel,  and  that  he 
had  only  entered  into  the  contract  as  her  agent. 

In  the  present  case,  which  is  brought  for  damages  upon  an  exe- 
cuted contract,  there  is  no  unambiguous  assertion  of  ownership  in 
the  husband.  The  roof  in  question  is  referred  to  by  the  defendants 
in  the  first  place  in  their  letter  to  him  as  "  your  roof,"  and  he  refers 
to  it  in  a  reply  as  "  my  roof ;  "  but  these  expressions  do  not  necessarily 
imply  the  representation  on  his  part  that  he  was  owner  of  the  roof 
or  of  the  building;  they  seem  to  be  used  merely  as  conveniently 
descriptive  of  the  subject-matter  under  discussion.  When  the  de- 
fendants in  the  next  line  of  the  correspondence  refer  to  the  town  in 
which  the  husband  lives  as  "  your  town,"  it  is  not  to  be  inferred  that 
they  meant  to  imply  that  he  was  the  owner  of  the  town ;  they  merely 
used  the  expression  as  meaning  the  town  with  which  he  was  at  the 
time  connected. 

He  was  managing  the  erection  of  this  building  for  his  wife  at  the 
time,  and  might,  without  being  taken  to  assert  ownership  in  it, 
adopt  the  defendants'  reference  to  the  roof  as  "  your  "  roof,  particu- 
larly as  the  defendants  in  the  same  letter  use  the  word  "  your "  in 
the  other  sense.  Therefore,  I  think  it  was  competent  for  the  wife 
to  show  that  her  husband  had  entered  into  the  contract  as  her  agent, 
and  to  recover  damages  from  the  defendants  for  the  breach  of  it. 

The  breach  seems  to  me  well  established:  the  roof  leaked  badly, 
and  in  the  end  became  practically  almost  useless,  in  spite  of  the 


440  ABBOTT  V.   ATLANTIC   REFINING   CO.  [OHAP.   X. 

defendants'  efforts  to  repair  it.  I  do  not  see  why  the  damages  should 
be  confined  to  the  cost  of  repairs  of  the  roof.  It  was  well  within  the 
contemplation  of  the  parties  that  if  the  roof  leaked  the  building  and 
its  walls  and  its  contents  would  suffer. 

No  one  but  a  party  or  privy  to  the  contract  could  recover  for  its 
breach ;  the  husband  was  neither  party  nor  privy ;  it  was  not  in  con- 
templation of  the  parties,  so  far  as  appears,  that  he  should  have  goods 
there,  and  he  cannot  recover,  and  the  action  against  him  should  be 
dismissed. 

The  wife  is  entitled  to  recover  for  the  loss  of  the  roof,  because  she 
will  have  to  replace  it,  and  to  the  damage  to  the  walls,  carpets,  etc. 
These  damages  will  easily  mount  up  to  the  sum  at  which  the  learned 
junior  judge  has  assessed  them,  namely,  $300. 

As  the  result  of  the  appeal,  there  will  therefore  be  judgment  for  the 
plaintiff  Mary  S.  Abbott  for  $200,  with  costs  from  the  time  she  was 
made  a  party;  and  the  action,  so  far  as  the  husband  is  concerned, 
will  be  dismissed  with  the  costs  of  the  defendants  as  against  him 
down  to,  but  not  inclusive  of,  notice  of  trial.  No  costs  of  the  appeal 
to  either  party. 

Falconbridge,  C.  J.    I  agree  in  the  result. 

Beitton^  J.,  concurred. 


CHAP.  XI.]      ADMISSIONS  AND  DECLABATIONS  OF  AGENT.  441 


CHAPTER   XL 

Admissions  and  Declaeations  of  Agent. 

GUNTEE   V.    STUAET. 
87  Ala.  196.     1888. 

Action  upon  stated  accounts  for  goods  sold  and  delivered  for  the 
use  of  defendants'  boats.  Plaintiff  produced  statements  of  accounts 
at  the  foot  of  each  of  which  was  written  "  This  statement  is  correct. 
J.  B.  McKee,  Clerk."  Defendants  offered  evidence  to  show  that 
McKee  had  quit  their  employment  before  these  statements  were 
signed  by  him,  and  asked  the  trial  court  to  charge  that  if  McKee 
was  not  in  their  employment  at  the  time  he  stated  the  accounts  they 
were  not  bound  thereby.  This  charge  was  refused  anJ  defendanta 
excepted. 

Stone,  C.  J.  Part  of  Stuart's  evidence,  on  which  he  relied  for 
recovery  against  the  steamboat  company,  the  appellants,  consisted  in 
certain  stated  accounts,  certified  to  be  correct  by  one  McKee,  styling 
himself  clerk.  These  certificates,  several  of  them  bear  date  in  Octo- 
ber, 1885,  and  some  of  the  items  appear  to  be  later  than  this.  There 
was  testimony  tending  to  show  that  McKee  ceased  to  be  clerk  or 
agent  of  the  appellants  about  June  1,  1885,  and  that  he  was  not  after- 
wards in  their  employment.  It  is  too  clear  to  admit  of  argument, 
that  after  McKee  ceased  to  be  clerk  and  agent  of  appellants,  he  could 
neither  do  any  act,  state  an  account,  or  make  an  admission  that 
would  bind  them.  While  the  relation  of  principal  and  agent  exists, 
the  agent  can  bind  his  principal  by  any  act  done  within  the  scope  of 
his  authority,  and  by  any  admission  made  contemporaneous  with,  and 
explanatory  of  the  act  of  agency  so  done.  3  Brick.  Dig.  25,  §§  107, 
108.  And  it  may  be  that,  acting  as  clerk  of  the  boat,  it  was  within 
the  purview  of  his  duties  to  make  purchases  for  the  boat,  and  to  state 
accounts.  All  these  powers,  however,  would  necessarily  terminate 
when  his  connection  with  the  boat  was  severed.  To  obtain,  after  that 
time,  any  information  he  might  possess,  he  must  needs  have  been 
made  a  witness.  Charges  2  and  3  asked  by  appellants  ought  to  have 
been  given.  Reversed  and  remanded.^ 

'  After  a  corporation  has  filed  an  answer  to  a  complaint,  the  power  of  the  presi- 
dent or  superintendent  to  make  any  further  admission  or  declaration  which  could 
bind  the  company  in  reference  to  the  cause  of  action  has  passed.  McEntyre  v.  Levi 
Cotton  Mills,  132  N.  C.  598. 


442  WHITE  V.   MILLER.  [CHAP.  XI. 


WHITE   V.   MILLER. 
71  N.  Y.  118.     1877. 

Action"  against  defendants  as  "trustees  of  the  mutual  society 
called  Shakers "  to  recover  damages  for  a  breach  of  a  contract  of 
"warranty  of  cabbage  seed.     Judgment  for  plaintiffs. 

Plaintiffs  bought  the  seed  as  "large  Bristol  cabbage  seed."  In 
fact  the  seed  were  impure  and  mixed,  and  did  not  answer  the 
description. 

Andkews,  J.  (after  deciding  that  there  was  a  warranty  arising 
from  the  sale  by  description).  The  remaining  questions  arise  upon 
exceptions  taken  by  the  defendants  to  the  admission  or  rejection  of 
evidence,  and  without  passing  upon  the  validity  of  the  other  excep- 
tions of  this  character,  we  are  of  opinion  that  the  referee  erred  in 
allowing  the  conversation  between  Chauncey  Miller  [one  of  the 
trustees]  and  the  plaintiff  White,  at  the  interview  between  them  in 
the  fall  of  1868,  to  be  given  in  evidence.  This  conversation  occurred 
nearly  eight  months  after  the  sale  of  the  seed,  and  the  making  of  the 
Avarranty  upon  which  the  action  is  brought.  If  the  declarations  of 
Miller  on  this  occasion  were  admissible  to  bind  the  society,  they  fur- 
nished very  material  evidence  to  sustain  the  plaintiffs'  case.  The 
plaintiffs  sought  to  establish,  among  other  things,  that  the  defect 
in  the  seed  was  owing  to  improper  and  negligent  cultivation,  thereby 
raising  an  implied  warranty,  in  addition  to  the  warranty  arising  out 
of  the  description  in  the  bill  of  parcels ;  and  it  was  also  an  essential 
part  of  their  case  to  establish  that  the  seed  sold  were  not  Bristol 
cabbage  seed;  and  this  they  sought  to  show  by  proving  by  gardeners 
and  other  persons  who  had  purchased  seed  of  the  defendants  of  the 
same  kind  as  that  sold  to  the  plaintiffs,  that  their  crops  had  also 
failed,  and  that  the  seed  did  not  produce  Bristol  cabbage.  The  admis- 
sions of  Miller,  in  the  conversation  proved,  tended  to  establish  both 
of  the  facts  referred  to,  viz. :  that  the  seed  was  inferior  and  mixed, 
owing  to  improper  cultivation,  and  that  it  would  not  produce  Bristol 
cabbage.  He  stated,  in  the  conversation,  that  the  impurity  of  the 
seed  was  owing  to  planting  the  Bristol  cabbage  stocks  in  the  vicinity 
of  stocks  of  the  red  cabbage,  and  that  the  society  had,  in  consequence 
of  the  defective  character  of  the  seed,  lost  their  own  crops  of  cabbage 
in  that  year.  The  proof  of  this  conversation  was  objected  to  on 
several  grounds;  and  among  others,  that  the  declarations  of  Miller, 
when  not  engaged  in  the  business  of  the  society,  were  not  admissible. 

The  general  rule  is,  that  what  one  person  says,  out  of  court,  is 
not  admissible  to  charge  or  bind  another.  The  exception  is  in  cases 
of  agency;  and  in  cases  of  agency,  the  declarations  of  the  agent  are 
not  competent  to  charge  the  principal,  upon  proof  merely  that  the 


CHAP.   XI.]       ADMISSIONS  AND  DECLARATIONS  OF  AGENT.  443 

relation  of  principal  and  agent  existed  when  the  declarations  were 
made.  It  must  further  appear  that  the  agent,  at  the  time  the  declara- 
tions were  made,  was  engaged  in  executing  the  authority  conferred 
upon  him,  and  that  the  declarations  related  to,  and  were  connected 
with,  the  business  then  depending,  so  that  they  constituted  a  part  of 
the  res  gestte.  In  Fairlie  v.  Hastings  (10  Ves.  Jr.  123),  Sir  William 
Grant  expressed,  with  great  clearness  and  accuracy,  the  doctrine  upon 
this  subject.  He  said :  "  ^Vliat  an  agent  has  said  may  be  what  con- 
stitutes the  agreement  of  the  principal ;  or  the  representations  or 
statements  made  may  be  the  foundation  of  or  the  inducement  to  the 
agreement.  Therefore,  if  a  writing  is  not  necessary  by  law,  the  evi- 
dence must  .be  admitted,  to  prove  the  agent  did  make  that  statement 
or  representation.  So,  with  regard  to  acts  done,  the  words  with 
which  these  acts  are  accompanied  frequently  tend  to  determine  their 
quality.  The  party,  therefore,  to  be  bound  by  the  act  must  be  affected 
by  the  words.  But,  except  in  one  or  the  other  of  these  ways,  I  do  not 
know  how  what  is  said  by  an  agent  can  be  evidence  against  the  prin- 
cipal. The  mere  assertion  of  a  fact  cannot  amount  to  proof  of  it, 
though  it  may  have  some  relation  to  the  business  in  which  the  person 
making  that  assertion  was  employed  as  agent."  See  also  Story  on 
Agency,  §§  134,  137;  Thallhimer  v.  Brinckerhoof,  4  Wend.  394; 
Hubbard  v.  Elmer,  7  Id.  446 ;  Luby  v.  H.  R.  R.  R.  Co.,  17  N".  Y.  131. 
The  rule  that  the  declarations  of  the  agent  are  inadmissible  to  bind 
the  principal,  unless  they  constitute  the  agreement  which  he  is  author- 
ized to  make,  or  relate  to  and  accompany  an  act  done  in  the  course  of 
the  agency,  is  applicable  in  all  cases,  whether  the  agent  is  a  general 
or  special  one,  or  the  principal  is  a  corporation  or  private  person. 
Angell  &  Ames  on  Cor.  §  309 ;   1  Gr.  Ev.,  §  114  a. 

The  conversation  with  Miller  was  inadmissible  within  the  rule 
stated.  It  was  not  a  part  of  any  contract  between  the  society  and  the 
plaintiffs,  nor  was  it  connected  with  any  business  which  Miller  was 
at  the  time  transacting' for  the  defendants.  The  plaintiffs  had  not 
then,  so  far  as  it  appears,  made  any  claim  that  the  defendants  were 
liable  on  the  warranty,  or  that  the  failure  of  the  crop  was  owing  to  a 
defect  in  the  seed.  The  plaintiff  White  states  that  up  to  the  time  of 
the  conversation,  he  had  not  been  able  to  account  for  the  failure. 
He  had  written  to  Miller  before  the  conversation,  and  requested  him 
to  look  at  the  crop,  and  to  explain,  if  he  could,  the  cause  of  the 
failure;  and,  not  receiving  an  answer,  he  went  to  see  Miller,  when 
the  conversation  referred  to  occurred.  Miller  at  this  time  made  no 
contract  or  arrangement  with  White  for  a  settlement  or  adjustment 
of  any  liability  incurred  by  the  society,  and  he  had  no  authority  to 
bind  the  society,  if  he  had  attempted  to  do  so,  to  pay  the  large  dam- 
ages subsequently  claimed  by  the  plaintiffs.  The  covenant  expressly 
declares  that  no  important  contract  made  by  the  trustees  shall  be 
considered  valid  without  the  previous  approbation  of  the  ministry 


444  LAWALL   V.   GROMAN.  [CHAP.   XI. 

and  elders.  An  agreement  to  pay  several  thousand  dollars  damages 
on  a  sale  of  thirty-six  dollars'  worth  of  seed,  would  be  an  important 
contract,  beyond  the  power  of  the  trustees  alone  to  make. 

For  these  reasons,  we  are  of  opinion  that  the  referee  erred  in  the 
admission  of  the  conversation  in  question. 

The  evidence  was  important,  and  we  cannot  say  that  it  did  not 
influence  the  result.  For  the  error  in  admitting  it,  the  judgment 
ehould  be  reversed  and  a  new  trial  granted.  Judgment  reversed. 


JONES   V.   HAKEELL. 
110  Gn.  373.     1900. 

Action  against  defendant  on  a  draft  claimed  to  have  been  signed 
by  her  husband  as  her  agent.    Judgment  for  plaintiff. 

Simmons,  C.  J.  .  .  .  The  plaintiff  was  allowed,  over  the  objection 
of  the  defendants,  to  testify  that  Jones,  the  husband,  had  told  him 
that  he  (Jones)  was  the  agent  of  his  wife.  It  is  a  well-settled  rule 
that  the  declarations  of  an  alleged  agent  are  not  admissible  to  prove 
his  agency.  The  agency  should  be  first  proved ;  then  the  declarations, 
if  made  as  to  matters  within  the  scope  of  the  agency,  would  be  ad- 
missible to  show  that  the  agent  was  acting  as  agent  and  for  the  prin- 
cipal. "  The  agent  certainly  can  not  confer  authority  upon  himself. 
Evidence  of  his  own  statements  or  admissions,  therefore,  is  not  ad- 
missible against  his  principal  for  the  purpose  of  establishing,  en- 
larging, or  renewing  his  authority ;  nor  can  his  authority  be  estab- 
lished by  showing  that  he  acted  as  agent  or  that  he  claimed  to  have 
the  powers  which  he  assumed  to  exercise."  Mechem,  Agency,  §  100. 
See  also  Small  v.  Williams,  87  Ga.  681 ;  Johnson  v.  R.  Co.,  90  Ga. 
810;  Abel  v.  Jarratt,  100  Ga.  732.  .  .  . 

(Judgment  reversed  because  of  error  in  the  admission  of  the  above 
testimony,  and  because  of  other  errors  not  material  here.) 


LAWALL   V.    GROMAN. 

180  Pa.  St.  532.     1897. 

Action  against  attorney  for  damages  for  negligence.    Nonsuit 

Edgar  J.  Lawall,  a  witness  for  plaintiff,  in  his  examination  in 
chief  was  asked  the  question : 

"  Were  you  authorized  by  your  sister  to  pay  it  (the  money)  over 
without  your  sister's  consent?'* 

Objected  to. 


CHAP.  XI.]      ADMISSIONS  AND  DECLARATIONS  OP  AGENT.  445 

By  the  Trial  Court :  The  objection  will  have  to  be  sustained,  his  au- 
thority will  have  to  be  found  from  what  was  said ;  his  opinion  cannot 
be  given  by  plaintiff  while  he  is  being  examined  in  chief. 

Plaintiff  excepts  and  bill  sealed.    [4] 

Opinion  by  Mr.  Justice  Mitchell. 

.  .  .  The  fourth  assignment  however  must  be  sustained.  The 
authority  of  Edgar  Lawall  from  his  sister  to  pay  over  the  money  was 
a  fact  to  which  he  could  testify.  Though  agency  cannot  be  proved 
by  declarations  of  the  alleged  agent  yet  he  is  a  competent  witness 
to  prove  it,  and  his  testimony  cannot  be  restricted  to  the  mere  words 
used  by  the  principal,  but  is  admissible  generally  on  the  whole  subject. 
Judgment  reversed  and  precedendo  awarded. 


WICKTORWITZ  V.   FARMERS'  INSURANCE  CO. 

31  Or.  569.     1897. 

Action  on  insurance  policy.  Judgment  for  plaintiff.  Defendant 
appeals,  contending  that  there  was  no  legal  evidence  that  notice  of  the 
fire  or  proof  of  loss  had  been  given  to  the  defendant,  as  required  by 
the  terms  of  the  policy. 

Bean,  J.  The  evidence  is  that,  after  the  fire,  Lewis  was  notified 
thereof,  and  proceeded  to  effect  an  adjustment  of  the  loss,  proof  of 
which  was  furnished  to  him  within  the  time  required  by  the  policy. 
The  objections  to  the  admission  of  the  testimony,  as  well  as  the 
motion  for  a  nonsuit  on  this  branch  of  the  case,  are  all  based  upon 
the  hypothesis  that  there  was  no  competent  evidence  to  show  that 
Lewis  was  in  fact  an  agent  of  the  company,  with  authority  to  settle 
and  adjust  losses,  and  receive  notice  and  proof  thereof,  at  the  time 
of  the  fire.  The  only  testimony  bearing  on  the  question  of  his  agency 
and  authority  in  this  regard,  aside  from  his  assuming  to  act  for  the 
company,  is  that  of  himself  and  Judge  Hewitt.  Lewis,  whose  evi- 
dence was  taken  by  deposition  in  New  York,  testified  that  for  some 
time  prior  to  October  22,  1889,  he  had  been  in  the  habit  of  procur- 
ing policies  of  insurance  from  the  defendant  company  by  corres- 
pondence, and  that  the  policy  in  suit  was  so  procured,  but  that,  on 
the  day  named,  he  entered  into  a  written  agreement  to  represent  the 
defendant  as  its  agent  in  issuing  policies,  collecting  premiums,  ad- 
justing losses,  and  otherwise  representing  it,  east  of  the  Rocky  Moun- 
tains, and  that  he  acted  under  this  authority  in  adjusting  the  loss 
and  receiving  and  forwarding  notice  and  proof  thereof.  Being  asked 
to  produce  and  deliver  his  commission  to  the  officer  taking  his  deposi- 
tion, so  that  it  could  be  made  a  part  thereof,  he  refused  to  part  with 
the  original,  but  delivered  a  copy,  which  was  attached  to  and  made  a 


446  WICKTORWITZ   V.    FAEMERS'   INS.    CO.  [CHAP.   XI. 

part  of  his  deposition.  TJpon  the  objection  of  the  defendant,  how- 
ever, the  court  refused  to  permit  this  copy  to  be  read  in  evidence,  on 
the  ground  that  it  was  incompetent.  Judge  Hewitt  testified  that  he 
was  one  of  the  attorneys  who  commenced  this  action;  that  after  its 
commencement,  in  the  course  of  a  general  conversation  with  Mr. 
Elderkin,  the  secretary  and  general  manager  of  the  defendant  com- 
pany, in  the  city  of  Albany,  Elderkin  said  that  Lewis  was  the  agent 
of  the  defendant  in  the  city  of  New  York,  and  that  a  certain  paper 
which  the  witness  then  exhibited  to  him  was  a  copy  of  his  commis- 
sion. This  paper  was  offered  and  received  in  evidence,  over  the  ob- 
jection of  the  defendant  that  it  was  incompetent,  and  not  the  best 
evidence,  and  that  no  proper  foundation  had  been  laid  for  the  in- 
troduction of  secondary  evidence  of  the  contents  of  the  original 
commission. 

The  objection  urged  to  the  testimony  of  Lewis  is  based  upon  the 
well-established  rule  that  the  mere  declarations  of  an  agent  are  not 
competent  testimony  to  prove  the  fact  of  agency.  But  this  rale  does 
not  prevent  him  from  testifying  in  court  upon  the  subject,  It  has 
reference  only  to  proof  of  the  declarations  of  an  alleged  agent,  made 
out  of  court,  and  not  to  such  as  he  may  make  under  oath  as  a 
witness.^  The  testimony  of  an  agent  as  to  the  nature  and  extent  of 
his  authority,  when  it  rests  in  parol,  is  as  competent  as  the  testimony 
of  any  other  witness  who  may  have  knowledge  on  the  subject.  "  It 
is  competent  to  prove  a*parol  agency,  and  its  nature  and  scope,"  says 
Mr.  Justice  Valextixe  in  Machine  Co.  v.  Clark,  15  Kan.  494,  "  by 
the  testimony  of  the  person  who  claims  to  be  the  agent.  It  is  com- 
petent to  prove  a  parol  authority  of  any  person  to  act  for  another, 
and  generally  to  prove  any  parol  authority  of  any  kind,  by  the  tes- 
timony of  the  person  who  claims  to  possess  such  authority.  But  it 
is  not  competent  to  prove  the  supposed  authority  of  an  agent,  for  the 
purpose  of  binding  his  principal,  by  proving  what  the  supposed  agent 
has  said  at  some  previous  time.  Nor  is  it  competent  to  prove  a  sup- 
posed authority  of  any  kind,  as  against  the  person  from  whom  such 
authority  is  claimed  to  have  been  received,  by  proving  the  previous 
statements  of  the  person  who  it  is  claimed  had  attained  such  author- 
ity." It  is  clear,  therefore,  that  Lewis  was  a  competent  witness ;  but, 
as  it  appears  and  is  admitted  that  his  authority  at  the  time  of  the 
fire  was  conferred  by  a  written  instrument,  the  writing  is,  of  course, 
the  best  evidence  of  the  nature  and  extent  of  his  agency,  and,  in 
accordance  with  the  familiar  rules  of  evidence,  must  be  produced,  or, 
if  not,  its  absence  must  be  satisfactorily  accounted  for,  before  parol 
evidence  of  its  contents  is  admissible;  and  hence  his  oral  testimony 
as  to  the  nature  and  extent  of  his  authority  was  incompetent.  It 
might  be  suggested,  however,  in  this  connection,  that  his  refusal  to 
permit  his  original  commission  to  be  made  a  part  of  his  deposition 

>  Van  sickle  v.  Keith,  88  Iowa,  9. 


CHAP.   XI.]      ADMISSIONS  AND  DECLARATIONS  OF  AGENT.  447 

is  a  sufficient  showing  of  diligence  on  the  part  of  the  plaintiffs  for 
the  admission  of  secondary  evidence  of  its  contents.  But  that  ques- 
tion is  not  before  us,  because  the  court  below  ruled  out  the  copy 
annexed  to  the  deposition,  and  it  is  not  a  part  of  the  record  here. 

The  paper  introduced  in  evidence  as  a  copy  of  his  commission  was 
not  8ho\Yn  to  be  such  except  by  the  admissions  of  Elderkin,  the 
general  manager  of  the  company,  made  to  Judge  Hewitt,  and  such 
admissions  were  incompetent  as  evidence  to  bind  the  defendant. 
The  rule  is  well  settled  that  the  admissions  of  an  agent  to  bind  his 
principal  must  be  made  at  the  time  and  as  a  part  of  some  act  in  the 
execution  of  his  authority.  1  Greenl.  Ev.  §  113;  Cunningham  v.' 
Cochran,  52  Am.  Dec.  230,  and  note.  There  is  no  evidence  that 
Elderkin  was  doing  any  act  within  the  scope  of  his  authority  at  the 
time  he  made  the  alleged  admissions.  They  were  made  in  the  course 
of  a  general  conversation  with  Judge  Hewitt  about  the  agencies  of 
the  company,  and  we  know  of  no  rule  of  law  that  will  justify  the 
admission  in  evidence  of  the  declarations  or  admissions  of  the  general 
manager  of  a  corporation  to  charge  the  company  simply  because  he 
is  such.  If,  in  the  performance  of  some  act  within  the  scope  of  his 
authority,  he  makes  an  admission  which  is  part  of  the  res  gestce,  such 
admission  is  admissible  in  evidence  against  his  principal,  because  it 
is  a  part  of  the  act;  and  it  is  only  when  the  acts  of  an  agent  will 
bind  his  principal  that  his  representations,  declarations,  and  admis- 
sions respecting  the  subject-matter  become  competent  evidence  for 
that  purpose.  North  Pac.  Lumber  Co.  v.  Willamette  Steam  Mill 
Lumbering  &  Manufg  Co.,  29  Or.  219,  44  Pac.  286.  Eliminating 
from  this  case  the  oral  testimony  of  Lewis  as  to  the  nature  and  ex- 
tent of  his  agency,  and  what  purports  to  be  a  copy  of  his  commission, 
introduced  in  evidence,  all  of  which,  as  we  have  said,  is  incompetent, 
there  remains  no  evidence  whatever  showing  or  tending  to  show  that 
Lewis  had  authority  to  adjudicate  losses  or  accept  notice  and  proof 
thereof;  and  for  this  reason  the  judgment  of  the  court  below  must 
be  reversed,  and  the  cause  remanded  for  a  new  trial. 

WoLVERTON,  J.,  being  interested  in  the  result,  took  no  part  in  this 
decision.  Reversed. 


BLACKMAN   V.   WEST   JERSEY   AND    SEASHORE 
RAILROAD    CO. 

68  N.  J.  L.  1.     1902. 

On  rule  to  show  cause  why  verdict  for  plaintiff  should  not  be  set 
aside. 

Before  Gummere,  Chief  Justice,  and  Justices  Van  Stckel,  Gar- 
rison, and  Garretson. 


448  BLACKMAN  V.  WEST  JERSEY,  ETC.,  RR.  CO.        [OHAP.   XI. 

The  opinion  of  the  court  was  delivered  by 

GuMMERE,  Chief  Justice.  The  plaintiff  was  injured  by  a  fall 
received  by  her  while  alighting  from  a  trolley  car  of  the  defendant 
company.  At  the  trial  she  offered  herself  as  a  witness  in  her  own 
behalf,  and  having  stated  that  her  fall  was  caused  by  the  sudden 
starting  of  the  car  while  she  was  on  the  running-board,  and  that  it 
was  stopped  again  as  soon  as  possible  after  she  was  thrown,  and  that 
the  conductor  then  came  to  her  and  helped  her  up,  was  then  asked 
what  the  conductor  said  to  her,  if  anything.  The  question  was  for- 
mally objected  to  but  was  permitted,  upon  the  ground  that  what  the 
conductor  said  was  part  of  the  res  gestw.  The  answer  was :  "  '  It  is 
too  bad,'  he  says ;  *  are  you  hurt  ? '  I  said  to  him,  '  I  signaled  you  to 
let  me  off  and  you  answered  me.'  He  said,  '  I  know  I  did,  but  I  for- 
got you.    It  is  entirely  my  fault.'  " 

The  rule,  with  relation  to  the  admission  of  declarations  upon  this 
ground,  is  that  where  the  declaration  is  concomitant  with  the  main 
fact  under  consideration  and  is  so  connected  with  it  as  to  illustrate 
its  character,  it  may  be  proved  as  part  of  the  res  gestce;  but  where 
it  is  merely  narrative  of  past  occurrence  it  cannot  be  received  as  proof 
of  the  character  of  that  occurrence.  Greenl.  Evid.  §  108 ;  Castner  v. 
Sliker,  4  Vroom,  95,  97.  Tested  by  this  rule  we  think  the  question 
should  have  been  excluded.  If  the  words  attributed  to  the  con- 
ductor had  been  exclamatory  and  coincident  with  the  happening  of 
the  accident,  they  would  undoubtedly  have  been  illustrative  of  its 
character,  and  proof  of  them  would  have  been  admissible.  They 
were,  however,  not  spoken  until  after  the  accident  had  occurred,  and, 
although  the  time  which  had  elapsed  between  the  happening  of  the 
accident  and  the  making  of  the  declaration  was  verj'  short,  still  the 
words  were  merely  narrative  of  the  conditions  which  had  brought 
it  about. 

It  is  suggested  that  the  testimony  was  competent,  as  the  admission 
of  an  agent  of  the  defendant  company,  which  bound  the  principal. 
The  allowance  of  the  question  cannot  be  supported  on  this  ground. 
It  is  only  words  which  are  spoken,  or  acts  which  are  done,  by  an 
agent  in  the  execution  of  his  agency  which  are  admissible  in  evidence 
against  the  principal.  Ashmore  v.  Pennsylvania  Steam  Towing  Co., 
9  Vroom,  13.  The  admission  of  the  conductor  was,  manifestly,  not 
made  in  pursuance  of  his  duty  to  his  employer,  and  cannot  bind  the 
latter. 

The  admission  of  this  testimony  was  error.  .  .  , 

The  rule  to  show  cause  wiU  be  made  absolute. 


CHAP.   XI.]       ADMISSIONS  AND  DECLARATIONS  OF  AGENT,  449- 

WILLIAMSON  V.  CAMBRIDGE  RAILEOAD  COMPANY. 

144  Mass.  148.     1887. 

Tort  for  personal  injuries.  Judgment  for  defendant.  Plaintiff 
alleges  exceptions. 

Plaintiff  was  thrown  from  defendant's  horse-car  while  attempting 
to  alight.  She  was  unconscious  for  a  moment  on  striking  the  pave- 
ment ;  the  conductor  hastened  to  her  assistance,  and  said,  "  I  am 
very  sorry,  madam,  that  was  my  fault."  The  trial  judge  excluded 
evidence  of  this  remark. 

W.  Allen,  J.  This  case  cannot  be  distinguished  from  Lane  v. 
Bryant,  9  Gray,  245.  That  was  an  action  for  injury  to  the  plaintiff'"* 
carriage  by  collision  with  the  defendant's  wagon  driven  by  his  servant. 
A  witness  was  asked  "  what  the  servant  said  to  the  plaintiff  at  the 
time  of  the  accident,  and  while  the  plaintiff  was  being  extricated  from 
his  carriage,  and  while  the  crowd  was  about."  The  reply,  that  the 
servant  said  the  plaintiff  was  not  to  blame,  was  admitted,  and  an 
exception  to  its  admission  was  sustained.  Mr.  Justice  Bigelow,  in 
delivering  the  opinion  of  the  court,  said,  in  language  which  well 
applies  to  the  case  at  bar :  "  The  declaration  of  the  defendant's  ser- 
vant was  incompetent,  and  should  have  been  rejected.  It  was  made 
after  the  accident  occurred,  and  the  injury  to  the  plaintift''s  carriage 
had  been  done.  It  did  not  accompany  the  principal  act,  ...  or 
tend  in  any  way  to  elucidate  it.  It  was  only  the  expression  of  an 
opinion  about  a  past  occurrence,  and  not  part  of  the  res  gestae.  It  is 
no  more  competent  because  made  immediately  after  the  accident 
than  if  made  a  week  or  a  month  afterwards." 

In  the  case  under  consideration,  the  plaintiff  relied  upon  the  act 
of  the  conductor  in  ringing  the  bell  and  starting  the  car  while  the 
plaintiff  was  leaving  it,  to  prove  negligence  in  the  defendant.     The 
words  of  the  conductor  did  not  form  part  of  that  transaction,  or  in 
any  manner  qualify  his  act,  or  any  act  of  the  plaintiff.    They  were 
in  form  and  substance  narrative,  and  expressed  an  opinion  upon  a 
past  transaction.     The  words,  if  competent  as  an  admission,  might 
have  been  evidence  to  show  what  the  character  of  the  transaction  was, 
but  they  did  not  enter  into  it  and  give  it  character,  any  more  than 
would  the  declaration  of  the  conductor  that  he  bad  not  been  in  fault, 
or  that  the  plaintiff  had  been.    In  the  opinion  of  a  majority  of  the 
court,  the  evidence  was  properly  excluded. 

•  •••••• 

Exceptions  overruled. 


450  ELLEDQE  V.   RAILWAY  CO.  [CHAP.  XI. 

ELLEDGE   v.   EAILWAY   COMPANY. 

100  Cal.  282.     1893. 

{Action  for  damages  for  personal  injuries.  Judgment  for  plaintiff. 
Defendant  appeals. 

Plaintiff  was  a  workman  engaged  in  loading  rock  from  a  bank  or 
cliff  from  ten  to  sixteen  feet  high,  under  the  direction  of  defendant's 
roadmaster.  There  was  a  seam  or  crack  behind  the  bank,  known  to 
the  roadmaster  but  unknown  to  plaintiff,  which  rendered  the  place 
unsafe  for  work.  A  portion  of  the  rocks  and  earth  slid  down  and 
injured  plaintiff.  When  the  roadmaster  saw  what  had  happened,  he 
exclaimed :  "  My  God,  I  expected  that !  " 

Temple,  C.  (after  disposing  of  other  matters).  Appellant  also 
alleges  some  errors  of  law  at  the  trial. 

He  contends  that  it  was  error  to  permit  the  witness  to  state,  against 
his  objection,  the  exclamation  of  O'Connell  (the  roadmaster),  when 
the  cliff  came  down.  This  is  plainly  part  of  the  res  gestce.  It  was 
unpremeditated  and  could  hardly  have  been  made  if  O'Connell  had 
not  feared  that  it  might  come  down.  It  does  not  depend  for  its 
probative  force  upon  O'Connell's  veracity,  and  therein  is  entirely 
unlike  a  deliberate  admission  made  after  the  event.  .  .  . 

Judgment  affirmed.^ 

•  Yordy  v.  Marshall  County,  86  Iowa,  340  (1892)  :  In  an  action  for  damages  for 
the  breaking  down  of  a  county  bridge,  the  court  admitted  evidence  that  a  member  of 
the  board  of  supervisors,  after  the  accident,  declared  that  the  bridge  had  been  con- 
demned by  the  board  as  unsafe,  and  notices  to  that  effect  ordered  posted.  Held: 
"  It  appears  that  the  alleged  declarations  of  Benedict  were  made  after  the  accident, 
and  it  does  not  appear  that  when  he  made  the  declarations  he  was  engaged  in  any 
official  work  or  employment  for  the  county.  Under  these  circumstances,  the  testi- 
mony as  to  his  declarations  was  not  competent  evidence.  He  was  an  agent  of  the 
county,  and  his  declaration  was  in  no  way  connected  with,  nor  a  part  of,  the  res 
gestw." 

Vicksburg,  &c.,  R.  v.  O'Brien,  119  U.  S.  99  (1886)  :  An  engineer  ten  to  thirty 
minutes  after  an  accident  declared  that  at  the  time  of  the  accident  the  train  was 
running  at  the  rate  of  eighteen  miles  an  hour.  Held:  Incompetent.  "The  occur- 
rence had  ended  when  the  declaration  in  question  was  made,  and  the  engineer  was 
not  in  the  act  of  doing  anything  that  could  possibly  affect  it.  If  his  declaration  had 
been  made  the  next  day  after  the  accident,  it  would  scarcely  be  claimed  that  it  was 
admissible  evidence  against  the  company.  And  yet  the  circumstance  that  It  was 
made  between  ten  and  thirty  minutes  —  an  appreciable  period  of  time  —  after  the 
accident,  cannot,  upon  principle,  make  this  case  an  exception  to  the  general  rule. 
If  the  contrary  view  shall  be  maintained,  it  would  follow  that  the  declarations  of 
the  engineer,  it  favorable  to  the  company,  would  be  admissible  in  its  behalf  as  part 
of  the  res  gestw,  without  calling  him  as  a  witness — a  proposition  that  will  find  no 
support  in  the  law  of  evidence.  The  cases  have  gone  far  enough  in  the  admission  of 
the  subsequent  declarations  of  agents  as  evidence  against  their  principals." 


CHAP.  XII.]  NOTICE  TO  AGENT.  451 


CHAPTEK   XII. 

Notice  to  Agent. 

CONGAB  V.   CHICAGO    AND    NOETHWESTEEN    EY.   CO. 

24  Wis.  157.     1869. 

The  plaintiff  shipped,  by  defendant's  road,  trees  and  other  nur- 
sery stock  from  Whitewater,  in  this  state,  directed  to  "  luka,  Iowa/' 
the  consignees  being  resident  in  a  village  of  that  name  in  Tama 
County,  Iowa.  At  Chicago,  the  goods  were  shipped  by  defendant's 
agents,  by  the  Chicago,  Burlington  and  Quincy  Eailroad  Company, 
and,  at  Quincy,  were  transferred  to  the  Quincy  and  Missouri  Eail- 
way,  by  which  they  were  transported  to  luka,  in  Keokuk  County, 
Iowa.  In  consequence  of  this  mistake,  they  are  alleged  to .  have 
become  worthless,  and  this  action  was  brought  to  recover  damages. 
Certain  averments  of  the  complaint  and  answer  will  be  found  recited 
in  the  second  paragraph  of  the  opinion,  infra.  A  demurrer  to  the 
answer  was  sustained,  and  defendant  appealed. 

Dixon,  Ch.  J.  The  decision  of  the  court  below,  as  shown  by  the 
written  opinion  of  the  learned  judge  found  in  the  printed  case,  turned 
upon  the  point  that,  for  the  purpose  of  charging  the  company  with 
negligence  in  shipping  the  goods  over  the  wrong  road,  notice  to  any 
of  its  agents  was  notice  to  the  company.  In  other  words,  the  court 
held,  that  the  knowledge  of  the  agents  residing  in  the  state  of  Iowa, 
and  transacting  the  business  of  the  company  there,  of  a  place  in  that 
state  named  luka,  and  that  goods  destined  for  that  place  were  to  be 
deposited  at  the  nearest  station  on  the  line  of  the  company's  road, 
called  Toledo,  was  the  knowledge  of  the  company,  so  as  to  make 
the  company  responsible  for  any  injury  resulting  from  the  mistake 
of  its  agents  residing  and  transacting  its  business  at  the  city  of 
Chicago,  in  the  state  of  Illinois,  in  forwarding  the  goods  from  the 
latter  place  by  another  railroad,  instead  of  over  the  company's  own 
road,  although  such  mistake  occurred  without  any  negligence  what- 
ever on  the  part  of  the  agents  making  it;  but,  after  they  had  taken 
reasonable  and  proper  care  to  ascertain  the  route  by  which  the  goods 
should  be  forwarded,  and  had  forwarded  them  in  accordance  with 
the  information  so  obtained.  This,  we  think,  was  an  erroneous 
application  of  the  doctrine  that  notice  to  the  agent  is  notice  to  the 


452  CONGAR   V.    CHICAGO   AND   N.    W.   RY.    CO.       [CHAP.   XII. 

principal.  Such  notice,  to  be  binding  upon  the  principal,  must  be 
notice  to  the  agent  when  acting  within  the  scope  of  his  agency,  and 
must  relate  to  that  business,  or,  as  most  of  the  authorities  have  it, 
the  very  business,  in  which  he  is  engaged,  or  is  represented  as  being 
engaged,  by  authority  of  his  principal.  It  must  be  the  knowledge 
of  the  agent  coming  to  him  while  he  is  concerned  for  the  principal, 
and  in  the  course  of  the  very  transaction  which  is  the  subject  of  the 
suit,  or  so  near  before  it  that  the  agent  must  be  presumed  to  recollect 
it.  Story  on  Agency,  §  40,  and  2  Kent's  Com.  630,  and  note,  and 
cases  cited.  Notice,  therefore,  to  the  agent  in  Iowa,  distant  some 
two  or  three  hundred  miles  from  the  city  of  Chicago,  who  had  distinct 
duties  to  perform,  and  were  not  at  all  concerned  in  the  business  of 
forwarding  the  goods  from  Chicago,  was  not  such  notice  as  will  bind 
the  company  in  relation  to  that  business,  the  same  having  been  trans- 
acted by  other  agents,  who  had  no  such  notice.  This  seems  very 
clear,  when  we  consider  the  reason  and  ground  upon  which  this 
doctrine  of  constructive  notice  rests.  The  principal  is  chargeable 
with  the  knowledge  of  his  agent,  because  the  agent  is  substituted  in 
his  place,  and  represents  him  in  the  particular  transaction;  and  it 
would  seem  to  be  an  obvious  perversion  of  the  doctrine,  and  to  lead 
to  most  injurious  results,  if,  in  the  same  transaction,  the  principal 
were  likewise  to  be  charged  with  the  knowledge  of  other  agents,  not 
engaged  in  it,  and  to  whom  he  had  delegated  no  authority  with 
respect  to  it,  but  who  are  employed  by  him  in  other  and  wholly 
different  departments  of  his  business. 

The  complaint  charges  that  the  place  called  luka,  in  Tama  County, 
Iowa,  to  which  the  goods  were  intended  to  be  sent,  was  known  to  the 
agents  of  the  company  residing  and  doing  business  along  the  line 
of  its  road  in  the  state  of  Iowa,  and  that  the  station  where  the  goods 
were  to  be  deposited  was  Toledo.  The  answer  alleges  that  the  same 
place  was  unknown  to  the  officers  and  agents  of  the  company  at 
Chicago;  that  they  were  informed  that  said  luka  was  situated  in 
Keokuk  County,  in  the  state  of  Iowa,  and  near  the  line  of  the  Bur- 
lington and  Missouri  Railroad;  that  they  examined  a  map  of  Iowa 
used  by  shippers,  and  kept  in  the  oflBce  of  defendant,  for  the  pur- 
pose of  ascertaining  where  said  luka  was  situated;  and  that  said 
map  represented  said  luka  as  being  in  Keokuk  County  aforesaid. 
The  answer  further  alleges  that  the  goods  were  directed  to  "  C.  E. 
Cox,  luka,  Iowa,"  without  giving  the  name  of  the  county,  or  other 
directions  to  indicate  to  what  part  of  the  state,  or  to  what  railroad 
station  in  the  state,  the  same  were  consigned,  or  by  what  line  of 
railroad  the  same  were  to  be  forwarded.  It  appears  to  this  court, 
therefore,  upon  the  pleadings,  that  no  cause  of  action  for  negligence 
is  stated  against  the  company,  but  that,  if  there  was  negligence  on 
the  part  of  any  one,  it  was  upon  the  part  of  the  plaintiff  in  not  having 
marked  the  goods  with  the  name  of  the  county,  or  otherwise  with  that 


CHAP.   XII.]  NOTICE   TO   AGENT.  453 

of  the  railway  station,  or  with  the  line  of  road  by  which  they  were 
to  be  sent.    The  demurrer  to  the  answer  should,  therefore,  have  been 
overruled;  and  the  order  sustaining  it  must  be  reversed,  and  the 
cause  remanded  for  further  proceedings  according  to  law. 
By  the  Codkt.    So  ordered. 


THE    DISTILLED   SPIEITS. 
11  Wall.  (U.  S.)  356.     1870. 

Information  filed  by  the  United  States  upon  the  seizure  of  278 
barrels  of  distilled  spirits  for  violation  of  the  revenue  laws.  Appear- 
ance and  claim  of  ownership  by  one  Harrington  and  one  Boyden. 
Decree  against  50  barrels  claimed  by  Harrington  and  all  those 
claimed  by  Boyden.    Appeal  by  claimants. 

The  spirits  were  withdrawn  from  bond  by  false  and  fraudulent 
representations,  and  upon  false  and  fraudulent  bonds.  Defendants 
claimed  to  have  purchased  in  open  market  without  notice  of  this 
fraud,  Harrington  having  purchased  through  Boyden  as  his  agent. 
The  court  charged  that  if  Boyden  was  cognizant  of  the  fraud, 
Harrington  would  be  bound  by  Boyden's  knowledge. 

Mr.  Justice  Bradley.  .  .  .  The  substance  of  the  third  instruction 
prayed  for  was,  that  if  the  spirits  were  removed  from  the  warehouse 
according  to  the  forms  of  law,  and  the  claimants  bought  them  with- 
out knowledge  of  the  fraud,  they  were  not  liable  to  forfeiture.  The 
court  charged  in  accordance  with  this  prayer  with  this  qualification, 
that  if  Boyden  bought  the  spirits  as  agent  for  Harrington,  and  was 
cognizant  of  the  fraud,  Harrington  would  be  bound  by  his  knowledge. 
The  claimants  insist  that  this  is  not  law.  4, 

The  question  how  far  a  purchaser  is  affected  with  notice  of  prior 
liens,  trusts,  or  frauds,  by  the  knowledge  of  his  agent  who  effects 
the  purchase,  is  one  that  has  been  much  mooted  in  England  and  this 
country.  That  he  is  bound  and  affected  by  such  knowledge  or  notice 
as  his  agent  obtains  in  negotiating  the  particular  transaction,  is 
everywhere  conceded.  But  Lord  Hardwicke  thought  that  the  rule 
could  not  be  extended  so  far  as  to  affect  the  principal  by  knowledge 
of  the  agent  acquired  previously  in  a  different  transaction.  Warrick 
V.  Warrick,  3  Atkyns,  291.  Supposing  it  to  be  clear,  that  the  agent 
still  retained  the  knowledge  so  formerly  acquired,  it  was  certainly 
making  a  very  nice  and  thin  distinction.  Lord  Eldon  did  not  ap- 
prove of  it.  In  Mountford  v.  Scott,  1  Turner  &  Russel,  274,  he  says: 
"  It  may  fall  to  be  considered  whether  one  transaction  might  not 
iollow  so  close  upon  the  other  as  to  render  it  impossible  to  give  a 
man  credit  for  having  forgotten  it.    I  should  be  unwilling  to  go  so 


454  THE  DISTILLED  SPIRITS.  [CTIAP.    XII. 

far  as  to  say,  that  if  an  attorney  has  notice  of  a  transaction  in  the 
morning,  he  shall  be  held  in  a  court  of  equity  to  have  forgotten  it 
in  the  evening;  it  must  in  all  cases  depend  upon  the  circumstances." 
The  distinction  taken  by  Lord  Hardwicke  has  since  been  entirely 
.  overruled  by  the  Court  of  Exchequer  Chamber  in  the  case  of  Dresser 
t'.  Norwood,  17  Common  Bench,  N.  S.  466.  So  that  in  England  the 
doctrine  now  seems  to  be  established,  that  if  the  agent  at  the  time 
of  effecting  a  purchase,  has  knowledge  of  any  prior  lien,  trust,  or 
fraud,  affecting  the  property,  no  matter  when  he  acquired  such 
knowledge,  his  principal  is  affected  thereby.  If  he  acquire  the  knowl- 
edge when  he  effects  the  purchase,  no  question  can  arise  as  to  his 
having  it  at  that  time;  if  he  acquired  it  previous  to  the  purchase,  the 
presumption  that  he  still  retains  it,  and  has  it  present  to  his  mind, 
will  depend  on  the  lapse  of  time  and  other  circumstances.  Knowl- 
edge communicated  to  the  principal  himself  he  is  bound  to  recollect, 
but  he  is  not  bound  by  knowledge  communicated  to  his  agent,  unless 
it  is  present  to  the  agent's  mind  at  the  time  of  effecting  the  purchase. 
Clear  and  satisfactory  proof  that  it  was  so  present  seems  to  be  the 
only  restriction  required  by  the  English  rule  as  now  understood. 
With  the  qualification  that  the  agent  is  at  liberty  to  communicate 
his  knowledge  to  his  principal,  it  appears  to  us  to  be  a  sound  view 
of  the  subject.  The  general  rule  that  a  principal  is  bound  by  the 
knowledge  of  his  agent  is  based  on  the  principle  of  law,  that  it  is 
the  agent's  duty  to  communicate  to  his  principal  the  knowledge 
which  he  has  respecting  the  subject-matter  of  negotiation,  and  the 
presumption  that  he  will  perform  that  duty.  When  it  is  not  the 
agent's  duty  to  communicate  such  knowledge,  when  it  would  be 
unlawful  for  him  to  do  so,  as,  for  example,  when  it  has  been  acquired 
confidentially  as  attorney  for  a  former  client  in  a  prior  transaction, 
the  reason  of  the  rule  ceases,  and  in  such  a  case  an  agent  would  not 
be  expected  to  do  that  which  would  involve  the  betrayal  of  profes- 
sional confidence,  and  his  principal  ought  not  to  be  bound  by  his 
agent's  secret  and  confidential  information.  This  often  happened 
in  the  case  of  large  estates  in  England,  where  men  of  great  profes- 
sional eminence  were  frequently  consulted.  They  thus  became 
possessed,  in  a  confidential  manner,  of  secret  trusts,  or  other  defects 
of  title,  which  they  could  not  honorably,  if  they  could  legally,  com- 
municate to  subsequent  clients.  This  difficulty  presented  itself  to 
Lord  Hardwicke's  mind,  and  undoubtely  lay  at  the  bottom  of  the 
distinction  which  he  established.  Had  he  confined  it  to  such  cases, 
it  would  have  been  entirely  unexceptionable. 

The  general  tendency  of  decisions  in  this  countrj'  has  been  to 
adopt  the  distinction  of  Lord  Hardwicke,  but  it  has  several  times 
been  held,  in  consonance  with  Lord  Eldon's  suggestion,  that  if  the 
agent  acquired  his  information  so  recently  as  to  make  it  incredible 
that  he  should  have  forgotten  it,  his  principal  will  be  bound.    This  i3 


CHAP.   XII.] 


NOTICE  TO   AGENT. 


455 


really  an  abandonment  of  the  principle  on  which  the  distinction  is 
founded,  Story  on  Agency,  §  140;  Hovey  v.  Blanchard,  13  N".  H. 
145 ;  Patten  v.  Insurance  Co.,  40  Id.  375 ;  Hart  v.  Farmers'  &  Me- 
cjianics'  Bank,  33  Vt.  252.  The  case  of  Hart  v.  Farmers'  &  Me- 
chanics' Bank,  33  Vt.  252,  adopts  the  rule  established  by  the  case  of 
Dresser  v.  Norwood.  Other  cases,  as  that  of  Bank  of  United  States 
V.  Davis,  2  Hill,  452 ;  New  York  Central  Insurance  Co.  v.  National 
Protection  Co.,  20  Barb.  468,  adhere  to  the  more  rigid  views.  See 
cases  collected  in  note  to  American  edition  of  17  Common  Bench, 
N.  S.  482,  and  Mr.  Justice  Clifford's  opinion  in  the  Circuit  Court 
in  the  present  case. 

On  the  whole,  however,  we  think  that  the  rule  as  finally  settled  by 
the  English  courts,  with  the  qualification  above  mentioned,  is  the  true 
one,  and  is  deduced  from  the  best  consideration  of  the  reasons  on 
which  it  is  founded.  Applying  it  to  the  case  in  hand,  we  think  that 
the  charge  was  substantially  correct.  The  fair  construction  of  the 
charge  is,  that  if  the  jury  believed  that  Boyden,  the  agent,  was  cogni- 
zant of  the  fraud  at  the  time  of  the  purchase,  Harrington,  the  prin- 
cipal, was  bound  by  this  knowledge.  The  precise  words  were,  "  that 
if  Boyden  bought  the  spirits  as  agent  for  Harrington,  and  Boyden 
was  cognizant  of  the  fraud,  Harrington  would  be  bound  by  his  knowl- 
edge." The  plain  and  natural  sense  of  these  words,  and  that  in  which 
the  jury  would  understand  them,  we  think,  is  that  they  refer  to  Boy- 
den's  knowledge  at  the  time  of  making  the  purchase.  Thus  construed, 
the  charge  is  strictly  in  accordance  with  the  law  as  above  explained. 
There  was  no  pretence  that  Boyden  acquired  his  knowledge  in  a 
fiduciary  character. 

Judgment  affirmed. 


HOUSEMAN   V.   GIRARD   MUTUAL   BUILDING   AND 
LOAN   ASS'N. 

81  Pa.  St.  256.     1876. 


The  association  intending  to  loan  money  to  one  Leslie  upon  his 
property  authorized  Leslie  to  procure  from  Houseman,  Recorder  of 
Deeds,  a  search  of  the  property.  Houseman  negligently  certified  that 
there  were  no  incumbrances.  The  association  thereupon  made  the 
loan  to  Leslie,  and  afterward  discovered  that  at  the  time  of  the 
search  there  were  outstanding  recorded  mortgages  from  Leslie  to 
other  parties.  The  association  sues  Houseman  for  the  loss  occasioned 
by  the  false  certificate.  The  trial  judge  refused  Houseman's  request 
to  charge  as  follows: 


456  HOUSEMAN  V.  GIBAHD  M.  B.  AND  L.  ASS.        [CHAP.    XII. 

"  If  C.  M.  S.  Leslie  was  employed  by  the  plaintiffs  to  procure 
certificates  of  search,  and  did  so  procure  them  for  the  plaintiffs,  then 
the  knowledge  of  Leslie  of  the  existence  of  the  uncertified  mortgages 
was  imputed  to  the  plaintiffs  and  is  their  knowledge." 

The  trial  judge  directed  a  verdict  for  the  association.  Houseman 
appeals. 

Mr.  Justice  Sharswood  delivered  the  opinion  of  the  court. 

This  was  an  action  instituted  in  the  court  below  by  the  defendants 
in  error  to  recover  from  the  plaintiff  in  error,  who  was  formerly 
recorder  of  deeds  for  the  county  of  Philadelphia,  damages  for  a  false 
certificate  of  search  issued  by  him,  or  by  his  authority.  That  such 
a  certificate  was  issued  false  in  fact ;  that  it  was  ordered  and  paid  for 
by  the  defendants,  and  that  in  consequence  they  suffered  damages, 
were  points  not  in  dispute.  That  the  recorder  is  prima  facie  liable 
to  respond  in  damages  for  such  false  search,  has  been  settled  in 
McCaraher  v.  Commonwealth,  5  W.  &  S.  21,  and  is  no  longer  an 
open  question. 

It  was  decided  by  the  present  Chief  Justice  at  nisi  prius,  in  Com- 
monwealth V.  Kellogg,  6  Phila.  E.  90,  that  this  liability  is  to  the 
party  who  asks  and  pays  for  the  search,  and  does  not  extend  to  his 
assigns  or  alienee. 

The  contention  here  all  grows  out  of  the  fact  that  the  search  in 
this  case,  by  the  request  of  the  conveyancer  of  the  defendants,  was 
ordered  and  paid  for  by  the  owner  of  the  premises,  in  order  that  he 
might  obtain  a  loan  of  money  on  mortgage  from  the  defendants, 
and  the  certificate  was  so  used,  and  the  money  so  obtained. 

It  is  urged,  that  by  the  employment  of  the  owner  as  the  agent  for 
this  purpose,  the  defendants  are  affected  with  this  knowledge  of  the 
existence  of  the  mortgage,  which  was  omitted  in  the  certificate. 
This  is  a  very  familiar  principle  and  well  settled.  But  it  is  equally 
well  settled  that  the  principal  is  only  to  be  affected  by  knowledge 
acquired  in  the  course  of  the  business  in  which  the  agent  was  em- 
ployed. This  limitation  of  the  rule  is  perfectly  well  established  by 
our  own  cases,  and  it  was  not  necessary  to  look  further:  Hood  v. 
Fahnestock,  8  Watts,  489;  Bracken  v.  Miller,  4  W.  &  S.  110;  Martin 
V.  Jackson,  3  Casey,  508.  It  is  a  mistake  to  suppose  that  it  depends 
upon  the  reason  that  no  man  can  be  supposed  to  always  carry  in  his 
mind  a  recollection  of  former  occurrences,  and  that  if  it  be  proved 
that  he  actually  had  it  in  his  mkid  at  the  time,  the  rule  is  different. 
It  may  support  the  reasonableness  of  the  rule  to  consider  that  the 
memory  of  men  is  fallible  in  the  very  best,  and  varies  in  different 
men.  But  the  true  reason  of  the  limitation  is  a  technical  one,  that 
it  is  only  during  the  agency  that  the  agent  represents,  and  stands  in 
the  shoes  of  his  principal.  Notice  to  him  is  then  notice  to  his  prin- 
cipal. Notice  to  him  twenty-four  hours  before  the  relation  com- 
menced is  no  more  notice  than  twenty-four  hours  after  it  had  ceased 


CHAP.   XII.]  NOTICE  TO  AGENT.  457 

would  be.  Knowledge  can  be  no  better  than  direct  actual  notice. 
It  was  incumbent  on  the  plaintiff  to  show  that  the  knowledge  of  the 
agent,  to  use  the  accurate  language  of  one  of  our  cases,  "  was  gained 
in  the  transaction  in  which  he  was  employed."  There  was  not  only 
no  evidence  of  this  offer  by  the  plaintiff,  but  it  was  plain  that  it  had 
been  gained  before,  and  in  an  entirely  different  transaction.  It  is  not 
necessary  to  consider  in  this  view  of  the  matter  whether  the  alleged 
agent  was  really  such,  or  only  the  servant  or  clerk  of  the  conveyancer. 

It  is  urged  that  the  conveyancer  of  the  defendants,  in  the  employ- 
ment of  the  owner,  who  was  the  applicant  for  the  loan,  and  interested, 
therefore,  to  obtain  clear  searches,  was  guilty  of  negligence,  which 
is  imputable  to  his  constituents,  and  will,  therefore,  bar  their  recov- 
ery. But  this  is  to  maintain  that  a  man  is  to  presume  fraud  or 
forgery  in  one,  whose  character  is  good,  and  that  if  he  does  not  he 
is  prima  facie  negligent.  "When  the  scrivener  received  a  clear  certi- 
ficate under  the  undoubted  oflBcial  seal  of  the  recorder,  he  surely  was 
not  bound  to  presume  that  a  fraud  had  been  committed  on  the 
recorder  or  his  clerk,  nor  was  there  any  evidence  from  which  such 
fraud  could  be  inferred.  If  there  was  no  such  presumption,  neither 
would  there  arise  any  presumption  beforehand,  that  the  owner  would 
succeed  in  corrupting  or  deceiving  the  clerk  or  servant  of  the  plain- 
tiff. Without  some  such  presumption,  how  can  it  be  said  that  it  was 
prima  facie  evidence  of  negligence?  that  the  owner  was  employed 
in  the  mere  ministerial  service  of  ordinary  paying  for  and  procuring 
the  certificate? 

We  are  of  opinion  that  the  learned  judge  was  right  in  directing 
a  verdict  for  the  plaintiffs  below.  Judgment  affirmed. 


McCOEMICK   V.   JOSEPH. 
83  Ala.  401.     1887. 

Action  to  recover  possession  of  goods.  Intervention  by  claimants. 
Judgment  for  plaintiffs.     Claimants  appeal. 

Plaintiffs  sold  the  goods  to  one  Manasses.  Manasses  turned  over 
a  part  of  the  goods  to  claimants  in  payment  of  a  debt.  Plaintiffs 
claim  the  right  to  rescind  the  contract  of  sale  on  the  ground  that 
Manasses  fraudulently  obtained  the  goods  while  insolvent  and  having 
no  expectation  of  paying  for  them,  and  that  claimants  had  notice 
of  Manasses'  insolvency.  The  evidence  to  sustain  the  contention  that 
claimants  had  notice  was  this :  One  White,  who  was  claimants'  attor- 
ney in  securing  the  goods  in  payment  of  the  debt,  had  a  few  days 
earlier  drawn  a  mortgage  upon  Manasses'  stock  of  merchandise  in 
favor  of  E.,  and  had  aided  in  a  transfer  of  the  rest  of  the  stock  to 


458  CONSTANT  V.   UNIVERSITY  OF   ROCHESTER.       [CHAP.   XU, 

Manasses'  wife;  White  testified  that  while  performing  these  services 
he  ascertained  that  Manasses  was  insolvent.  The  court  charged  in 
substance  that  claimants  were  chargeable  in  law  with  notice  of  the 
facts  ascertained  by  White  in  the  course  of  the  previous  transactions 
between  Manasses  and  E.  and  Manasses  and  wife. 

Stone,  C.  J.  It  was  early  settled  in  this  state,  and  has  been  since 
followed,  that  notice,  or  knowledge  by  an  attorney,  to  carry  home 
constructive  notice  to  the  client,  must  be  shown  to  have  been  given 
or  acquired  after  the  relation  of  attorney  and  client  was  formed.  It 
is  not  enough  that  the  notice  is  first,  and  the  retainer  afterwards, 
Lucas  V.  Bank  of  Darien,  2  Stew.  280;  Terrell  v.  Br.  Bank,  12  Ala. 
502 ;  Freukel  v.  Hudson,  82  Ala.  158 ;  Story  on  Agency,  §  140.  The 
case  of  City  Nat.  Bank  v.  Jeffries,  73  Ala.  183,  is  not  opposed  to  this 
view.  In  that  case,  the  information  was  obtained  while  the  relation 
of  attorney  and  client  existed. 

This  must  work  a  reversal  of  this  case. 


COJ^STAXT   V.   UNIVERSITY   OF   EOCHESTER. 

Ill  K  Y.  604.     1889. 

Action  to  foreclose  a  mortgage  dated  February  17,  1883,  given 
by  A.  &  B.  to  plaintiff's  testator.  Defendant  sets  up  title  under  fore- 
closure proceedings  upon  a  mortgage  dated  January  10,  1884,  given 
by  A.  &  B.  to  defendant.  At  the  time  defendant  purchased  under  the 
foreclosure  sale  plaintiff's  mortgage  had  not  been  recorded,  and  de- 
fendant denies  any  notice  or  knowledge  of  it.  One  Deane  acted  as 
attorney  and  agent  of  plaintiff  in  taking  the  first  mortgage,  and  of 
defendant  in  taking  the  second.  Judgment  for  plaintiff.  Defendant 
appeals. 

Peckham,  J.  (after  discussing  the  evidence  and  the  authorities 
upon  the  subject  of  notice).  From  all  these  various  cases  it  will  be 
seen  that  the  farthest  that  has  been  gone  in  the  way  of  holding  a 
principal  chargeable  with  knowledge  of  facts  communicated  to  his 
agent,  where  the  notice  was  not  received,  or  the  knowledge  obtained, 
in  the  very  transaction  in  question,  has  been  to  hold  the  principal 
chargeable  upon  clear  proof  that  the  knowledge  which  the  agent  once 
had,  and  which  he  had  obtained  in  another  transaction,  at  another 
time,  and  for  another  principal,  was  present  to  his  mind  at  the  very 
time  of  the  transaction  in  question.  .  .  .  But  the  burden  is  upon  the 
plaintiff  to  prove,  clearly  and  beyond  question,  that  he  [the  agent] 
did,  and  it  is  not  upon  the  defendant  to  show  that  he  did  not,  have 
•such  recollection.  And  we  think  that  there  is  a  total  lack  of  evidence 
in  the  case  which  would  sustain  the  finding  that  Deane  had  the  least 


CHAP.   XII.]  NOTICE  TO   AGENT.  459 

recollection  on  the  subject  at  the  time  of  the  execution  of  the  univer- 
sity mortgage.  Under  such  circumstances  we  think  it  impossible  to 
impute  notice  to  the  university,  or  knowledge  in  regard  to  a  fact 
which  is  not  proved  to  have  been  possessed  by  its  agent.  If  such 
knowledge  did  not  exist  in  Deane  at  the  time  of  his  taking  the  mort- 
gage to  the  university,  then  the  latter  is  a  hoiia  fide  mortgagee  for 
value,  and  its  mortgage  should  be  regarded  as  a  prior  lien  to  that 
of  the  unrecorded  mortgage  of  Constant,  which  is  prior  in  point  of 
date.  The  plaintiff  is  bound  to  show,  by  clear  and  satisfactory  evi- 
dence, that  when  this  mortgage  to  the  university  was  taken  by  Deane, 
he  then  had  knowledge,  and  the  fact  was  then  present  in  his  mind, 
not  only  that  he  had  taken  a  mortgage  to  Constant  eleven  months 
prior  thereto  on  the  same  premises,  which  had  not  been  recorded, 
but  that  such  mortgage  was  an  existing  and  valid  lien  upon  the 
premises,  which  had  not  been  in  any  manner  satisfied.  If  he  recol- 
lected that  there  had  been  such  a  mortgage,  but  honestly  believed  that 
it  was  or  had  been  satisfied,  then,  although  mistaken  upon  that  point, 
the  university  could  not  be  charged  with  knowledge  of  the  existence 
of  such  mortgage.  ... 

One  other  question  has  been  argued  before  us  which  has  been  the 
subject  of  a  good  deal  of  thought.  It  is  this :  Assuming  that  Deane 
had  knowledge  of  the  existence  of  the  Constant  mortgage  at  the  time 
of  the  execution  of  the  mortgage  to  the  university,  is  his  knowledge 
to  be  imputed  to  the  university,  considering  the  position  Deane 
occupied  to  both  mortgagees? 

While  acting  as  the  agent  of  Constant  in  taking  the  mortgage  in 
question  as  security  for  the  funds  which  he  was  investing  for  him, 
it  was  the  duty  of  Deane  to  see  tliat  the  moneys  were  safely  and 
securely  invested.  The  value  of  the  property  was  between  eleven  and 
twelve  thousand  dollars;  and  it  was  obviously  the  duty  of  Deane  to 
see  that  the  mortgage  which  he  took  upon  such  property  as  a  security 
for  a  loan  of  $6,000  for  Constant  should  be  a  first  lien  thereon. 
Whitney  v.  Martine,  88  N.  Y.  535.  In  order  to  become  such  first  lien 
it  was  the  duty  of  Deane  to  see  to  it  that  the  Constant  mortgage  was 
first  recorded.  In  Januar}',  1884,  when  acting  as  agent  for  the  uni- 
versity to  invest  its  moneys,  he  owed  the  same  duty  to  the  university 
that  he  did  to  Constant,  and  it  was  his  business  to  see  to  it  that  the 
security  which  he  took  was  a  safe  and  secure  one.  Neither  mortgage 
was  safe  or  secure  if  it  were  a  subsequent  lien  to  the  other  upon  this 
property.  This  duty  he  continued  to  owe  to  Constant  at  the  time 
he  took  the  mortgage  to  the  university. 

At  the  time  of  the  execution  of  the  latter  mortgage,  therefore,  he 
owed  conflicting  duties  to  Constant  and  to  the  university,  the  duty 
in  each  case  being  to  make  the  mortgage  to  each  principal  a  first  lien 
on  the  property.  Owing  these  conflicting  duties  to  two  different  prin- 
cipals, in  two  separate  transactions,  can  it  be  properly  said  that  any 


460  CONSTANT   V.   UNIVEBSITY   OF   EOCHESTEB.       [CHAP;   XII. 

knowledge  coining  to  him  in  the  course  of  either  transaction  should 
be  imputed  to  his  principal  ?  Can  any  agent  occupying  such  a  posi- 
tion bind  either  principal  by  constructive  notice  ?  It  has  been  stated 
that  in  such  a  case  where  an  agent  thus  owes  conflicting  duties,  the 
security  which  is  taken  or  the  act  which  is  performed  by  the  agent 
may  be  repudiated  by  his  principal  when  he  becomes  aware  of  the 
position  occupied  by  such  agent.    Story  on  Agency,  §  210. 

The  reason  for  this  rule  is,  that  the  principal  has  the  right  to  the 
best  efforts  of  his  agent  in  the  transaction  of  the  business  connected 
with  his  agency,  and  where  the  agent  owes  conflicting  duties  he  can- 
not give  that  which  the  principal  has  the  right  to  demand,  and  which 
lie  has  impliedly  contracted  to  give.  Ought  the  university  to  be 
charged  with  notice  of  the  existence  of  this  prior  mortgage  when  it 
was  the  duty  of  its  agent  to  procure  for  it  a  first  lien,  while,  at  the 
same  time,  in  his  capacity  as  agent  for  Constant,  it  was  equally  liis 
duty  to  give  to  him  the  prior  lien  ?  Which  principal  should  he  serve  ? 
There  have  been  cases  where,  in  the  sale  and  purchase  of  the  same 
real  estate,  both  parties  have  employed  the  same  agent,  and  it  has 
been  held  under  such  circumstances  that  the  knowledge  of  the  agent 
was  to  be  imputed  to  both  of  his  principals.  If,  with  a  full  knowl- 
edge of  the  facts  that  his  own  agent  was  the  agent  of  the  other,  each 
principal  retained  him  in  his  employment,  we  can  see  that  there 
would  be  propriety  in  so  holding;  for  each  then  notes  the  position 
which  the  agent  has  with  regard  to  the  other,  and  each  takes  the  risk 
of  having  imputed  to  him  whatever  knowledge  the  agent  may  have 
on  the  subject.  See  Le  Neve  v.  Lie  Neve,  1  Ambler's  Reports,  436, 
Hardwicke,  Chancellor,  decided  in  1747;  Toulmin  v.  Steere,  3  Meri- 
vale,  209,  decided  in  1817,  by  Sir  Walter  Grant,  Master  of  the  Eolls. 
The  case  of  Nixon  v.  Hamilton,  already  referred  to,  decided  by  Lord 
Plunkett,  Lord  Chancellor  in  the  Irish  Court  of  Chancery,  in  1838 
(2  Drury  &  Walsh,  364),  is  a  case  in  many  respects  somewhat  like  the 
one  at  bar,  so  far  as  this  principle  is  concerned,  if  it  be  assumed  that 
Deane  really  had  the  knowledge  of  the  prior  mortgage  as  an  existing 
lien.  It  will  be  observed,  however,  upon  examination  of  it,  that  the 
question,  whether  the  knowledge  of  the  common  agent  in  two  different 
transactions  with  two  different  principals  was  notice  to  the  second 
principal,  was  not  raised  with  reference  to  this  particular  ground. 
The  whole  discussion  was  upon  the  subject  of  imputing  the  knowledge 
of  the  agent  to  the  second  mortgagee,  of  the  existence  of  the  prior 
mortgage,  which  knowledge  was  not  obtained  in  the  last  transaction. 
AVhether  such  knowledge  should  or  should  not  be  imputed  to  the 
second  mortgagee,  because  of  the  conflicting  duties  owed  by  the  com- 
mon agent,  was  not  raised.  The  only  defence  set  up  was,  that  the 
information  did  not  come  to  the  agent  of  the  second  mortgagee  in 
the  course  of  transacting  the  business  of  the  second  mortgagee,  and 
the  question  was  simply  whether  such  knowledge  could  be  imputed 


CHAP.    XII.]  NOTICE  TO   AGENT.  *  461 

to  the  second  mortgagee,  because  of  the  knowledge  acquired  by  his 
agent  at  another  time,  in  another  transaction,  with  another  principal. 
The  court  held,  that  where  it  appeared,  as  in  this  case  it  did  appear, 
fully  and  plainly,  that  the  matter  was  fresh  in  the  recollection,  and 
fully  within  the  knowledge  of  the  agent,  and  under  such  circum- 
t-tances,  that  it  was  a  gross  fraud  on  the  part  of  the  agent,  in  the 
first  place  in  keeping  a  prior  mortgage  off  the  record,  and  in  the 
second  place,  in  not  communicating  the  knowledge  which  he  had  to 
his  principal,  the  second  mortgagee,  that  in  such  case  the  second 
mortgagee  was  charged  with  the  knowledge  of  his  agent. 

WTiether  the  same  result  would  have  been  reached  if  the  other 
ground  had  been  argued  we  cannot  of  course  assume  to  decide.  I 
have  found  no  case  precisely  in  point  where  the  subject  has  been 
discussed  and  decided  either  way.  I  have  very  grave  doubts  as  to 
the  propriety  of  holding  in  the  case  of  an  agent,  situated  as  I  have 
stated,  that  his  principal  in  the  second  mortgage  should  be  charged 
with  knowledge  which  such  agent  acquired  in  another  transaction, 
at  a  different  time,  while  in  the  employment  of  a  different  principal, 
and  where  his  duties  to  such  principal  still  existed  and  conflicted  with 
his  duty  to  his  second  principal.  We  do  not  deem  it,  however, 
necessary  to  decide  the  question  in  this  case.^ 

For  the  reasons  already  given  the  judgment  should  be  reversed 
and  a  new  trial  ordered,  with  costs  to  abide  the  event. 

Gbay  and  Andrews^  JJ.,  dissent.  Judgment  reversed. 


CKAFT   V.    SOUTH   BOSTON   RAILROAD    COMPANY. 
150  Mass.  200.     1889. 

Action  to  recover  damages  for  refusal  of  defendant  company  to 
recognize  as  valid  certain  shares  of  stock  held  by  plaintiff.  Judg- 
ment for  defendant. 

Field,  J.  ...  In  the  second  case,*  the  plaintiff  was  a  stockholder 
of  the  defendant,  and,  having  money  to  invest,  in  January,  1882, 
applied  to  Reed  as  a  broker  to  buy  for  her  eight  additional  shares  of 
the  stock  of  the  defendant.  Reed  informed  the  plaintiff  that  he  had 
bought  the  shares  for  her,  and  she  in  good  faith  paid  him  for  them, 
and  received  from  him  a  certificate  in  her  name  of  eight  shares  of 
stock  in  the  usual  form,  under  the  seal  of  the  corporation,  signed 
by  its  president  and  by  Reed  as  its  treasurer.  He  obtained  the  certi- 
ficate by  filling  up  one  of  the  blanks  which  the  president  had  signed 

'  If  it  would  be  a  breach  of  duty  for  the  agent  to  disclose,  tlie  doctrine  of  con- 
structive notice  is  not  applicable.    Melvin  v.  Pabst  Brewing  Co.,  93  Wis.  153. 

*  The  other  case  entitled  Allen  v.  South  Boston  Railroad,  and  included  In  the 
■ame  opinion,  is  omitted. 


462  CRAFT  V.   SOUTH  BOSTON  B.  E.  CO.     [CHAP.  XII. 

and  left  with  him.  Before  doing  this,  he  entered  on  the  transfer- 
book  of  the  defendant  a  transfer  of  eight  shares  to  the  plaintiff  from 
himself  as  agent;  but  he  in  fact  had  no  stock  as  agent  or  otherwise, 
and  he  bought  no  stock  for  the  plaintiff,  and  the  corporation  had 
already  issued  all  its  capital  stock.  The  plaintiff's  name  as  holder 
of  these  shares  was  entered  on  the  dividend  sheets  of  the  company, 
and  semi-annual  dividends  were  paid  to  her,  and  her  name  was  also 
regularly  entered  as  owner  of  these  eight  shares  in  the  annual  returns 
made  by  the  commissioner  of  corporations  until  1886,  when  this  and 
many  other  frauds  of  Keed  were  discovered. 

The  agreed  facts  in  both  cases  show  gross  carelessness  on  the  part 
of  the  president  in  signing  certificates  in  blank,  and  negligence  on  the 
part  of  the  directors  in  not  examining  the  books  and  discovering  the 
fictitious  transfers  of  stock  made  by  Keed.  In  both  cases,  after 
the  frauds  were  discovered,  the  defendant  refused  to  recognize  the 
certificates  of  stock  as  valid,  and  refused  to  allow  them  to  be 
transferred,  or  to  issue  new  certificates.  .  .  . 

In  the  second  case,  the  plaintiff  received  from  Reed,  as  broker, 
a  certificate,  in  her  name,  of  the  stock  which  he  said  he  had  bought 
for  her,  and  there  is  nothing  to  show  that  this  was  not  the  usual  way 
in  which  brokers  transacted  such  business.  Apparently  Mrs.  Craft 
acted  as  a  purchaser  though  a  broker  usually  acted,  and  we  see  no 
want  of  due  care  on  her  part. 

Another  question  arises  in  her  case  from  the  fact  that  Reed,  who 
committed  the  fraud  upon  the  defendant,  was  also  her  agent  in  the 
transaction.  If  he  be  regarded  as  acting  in  two  capacities,  and  as 
having  committed  the  fraud  in  his  capacity  as  treasurer,  he  yet  as 
her  agent  knew  of  and  participated  in  it.  Is  this  knowledge  to  be 
imputed  to  her  in  determining  her  rights  against  the  defendant  ? 

The  general  rule  is,  that  notice  to  an  agent,  while  acting  for  his 
principal,  of  facts  affecting  the  character  of  the  transaction,  is  con- 
structive notice  to  the  principal.  Suit  v.  Woodhall,  113  Mass.  391 ; 
National  Security  Bank  v.  Cushman,  121  Mass.  490;  Sartwell  v. 
North,  144  Mass.  188 ;  The  Distilled  Spirits,  11  Wall.  356.  There 
is  an  exception  to  this  rule  when  the  agent  is  engaged  in  committing 
an  independent  fraudulent  act  on  his  account,  and  the  facts  to  be 
imputed  relate  to  this  fraudulent  act.  It  is  sometimes  said  that  it 
cannot  be  presumed  that  an  agent  will  communicate  to  his  principal 
acts  of  fraud  which  he  has  committed  on  his  own  account  in  trans- 
acting the  business  of  his  principal,  and  that  the  doctrine  of  imputed 
knowledge  rests  upon  a  presumption  that  an  agent  will  communicate 
to  his  principal  whatever  he  knows  concerning  the  business  he  is 
engaged  in  transacting  as  agent.  It  may  be  doubted  whether  the  rule 
and  the  exception  rest  on  any  such  reasons.  It  has  been  suggested 
that  the  true  reason  for  the  exception  is  that  an  independent  fraud 
committed  by  an  agent  on  his  own  account  is  beyond  the  scope  of 


CHAP.  XII,]  NOTICE  TO  AGENT,  463 

his  employment,  and  therefore  knowledge  of  it,  as  matter  of  law, 
cannot  be  imputed  to  the  principal,  and  the  principal  cannot  be  held 
responsible  for  it.  On  this  view,  such  a  fraud  bears  some  analogy 
to  a  tort  wilfully  committed  by  a  servant  for  his  own  purposes,  and 
not  as  a  means  of  performing  the  business  intrusted  to  him  by  his 
master.  Whatever  the  reason  may  be,  the  exception  is  well  estab- 
lished. Kennedy  v.  Green,  3  Myl.  &  K.  699;  Espin  v.  Pemberton, 
3  De  G.  &  J.  547;  Eolland  v.  Hart,  L.  E.  6  Ch.  678;  In  re  European 
Bank,  L.  R.  5  Ch.  358 ;  Cave  v.  Cave,  15  Ch.  D.  639 ;  Kettlewell  v. 
AVatson,  21  Ch.  D.  685,  707;  Innerarity  v.  Merchants'  National  Bank, 
139  Mass.  332 ;  Dillaway  v.  Butler,  135  Mass.  479 ;  Atlantic  Cotton 
Mills  V.  Indian  Orchard  Mills,  147  Mass.  268;  Howe  v.  Newmarch, 
12  Allen,  49. 

This  case  seems  to  us  to  fall  within  this  exception.  Although  the 
fraudulent  act  of  Reed  may  not  have  been  committed  with  the  inten- 
tion of  cheating  the  plaintiff,  yet  that  was  its  legal  effect,  and  it  was 
a  fraudulent  act  committed  by  him  for  his  own  benefit,  the  actual 
effect  of  which  wouW  have  been  wholly  to  avoid  the  transaction  if 
the  plaintiff  had  known  of  it. 

The  present  cases,  we  think,  fall  within  the  principle,  that,  where 
one  of  two  innocent  persons  must  suffer  a  loss  from  the  fraud  of  the 
third,  the  loss  must  be  borne  by  him  whose  negligence  enabled  the 
third  person  to  commit  the  fraud. 

The  defendant  cannot  be  compelled  to  issue  new  certificates,  or  to 
recognize  the  old  ones  as  valid,  because  to  do  so  would  cause  an  over- 
issue of  its  capital  stock,  but  it  is  liable  in  damages.  In  assessing 
damages  the  superior  court  has  taken  the  value  of  the  stock  to  be  its 
market  value  at  the  time  when  the  defendant  first  refused  to  recog- 
nize the  stock  as  valid  and  to  permit  a  transfer  of  it.  This  would 
be  the  rule  of  damages  if  the  certificates  were  valid.  Sargent  v. 
Franklin  Ins.  Co.,  8  Pick.  90;  Wyman  v.  American  Powder  Co., 
8  Cush.  168.  We  think  that  the  same  rule  of  damages  applies  to 
these  certificates.  In  re  Bahia  &  San  Francisco  Railway,  L.  R. 
3  Q.  B.  584. 

The  cases  having  been  submitted  on  agreed  statements  of  fact,  no 
question  arises  as  to  the  form  of  actions.  Upon  the  plaintiffs 
severally  filing  in  the  superior  court  the  certificates  properly  assigned 
to  the  defendant,  judgments  may  be  entered  for  the  plaintiffs. 

So  ordered.^ 

>  In  Brookhouse  v.  Union  Pub.  Co.,  73  N.  H.  368,  at  pages  374,  375.  the  court 
said :  "  The  plaintiff  further  says  that  the  defendants  had  notice  of  the  fraud 
through  Moore  himself,  their  treasurer  and  general  manager.  It  is  true  that  a 
principal  is  ordinarily  chargeable  with  the  knowledge  acquired  by  his  agent  in  exe- 
cuting the  agency,  and  Is  subject  to  the  liabilities  which  such  knowledge  Imposes. 
But  there  is  a  well-established  exception  to  this  rule,  by  which  the  principal  is  not 
charged  with  the  knowledge  of  his  agent  when  the  latter  is  engaged  in  '  committing 
an  Independent,  fraudulent  act  on  his  own  account,  and  the  facts  to  be  Imputed 
relate  to   this  fraudulent   act.'     Allen  v.   Railroad,    150   Mass.   200;    Indian   Head 


464  CABPENTEB  V.  OEB.  AM.   INS.   CO.  [CHAP.  IH. 

CARPENTER   v.    GERMAN    AMERICAN    INSURANCE    CO. 

135  N.  Y.  298.     1892. 

Action  upon  a  policy  of  fire  insurance.    Judgment  for  plaintiff. 

One  Mandeville  was  agent  of  defendant.  He  employed  a  sub- 
agent,  Andrews,  to  solicit  insurance.  Andrews  inspected  the  premises 
and  knew  before  the  policy  was  issued  that  the  plaintiff  was  not  the 
absolute  owner.  Defendant  contends  that  it  is  not  chargeable  with 
such  notice  and  that  the  policy  is  avoided  by  breach  of  the  term 
by  which  plaintiff  undertakes  that  he  is  the  "  sole,  absolute,  and 
unconditional  owner." 

Andrews,  J.  It  must  be  assumed  in  disposing  of  this  appeal  that 
Andrews,  the  sub-agent  of  Mandeville,  before  the  original  policy 
was  issued  of  which  the  policy  upon  which  this  action  is  brought  is 
a  renewal,  was  sent  by  Mandeville  to  inspect  the  premises  and  arrange 
the  insurance,  and  that  he  was  then  informed  by  the  plaintiff  that 
the  property  upon  which  the  insured  building  was  erected  was  held 
under  a  contract  of  purchase  from  the  State  Bank  of  Elizabeth,  New 
jersey.  If  this  constituted  notice  to  the  defendant,  then,  within  our 
decisions,  the  policy  was  not  avoided  by  the  printed  condition  that 

Nat'l  Bank  v.  Clark,  166  Mass.  27;  Produce,  etc.,  Co.  v.  Bieberbach,'l76  Mass.  577, 
588  ;  Camden,  etc.,  Co.  v.  Lord,  67  N.  J.  Eq.  489 ;  58  Atl.  Rep.  607  ;  Gunster  v. 
Company,  181  Pa.  St.  327  ;  Frenkel  v.  Hudson,  82  Ala.  158 ;  American  Surety  Co. 
V.  Pauly,  170  U.  S.  133;  2  Pom.  Eq.  Jur.  (3d  ed.),  s.  675,  and  authorities  cited  in 
notes;  1  Am.  &  Eng.  Enc.  Law  (2d  ed.),  1145,  and  authorities  cited  in  notes.  This 
exception  was  recognized  in  this  state  in  Clark  v.  Marshall,  62  N.  H.  498,  500.  Mr. 
Pomeroy  suggests  a  doubt  whether  it  applies  to  the  managing  officers  of  a  corpora- 
tion '  through  whom  alone  the  corporation  can  act.'  Sect.  675,  note  1.  He  gives 
no  reason  for  the  doubt,  and  the  cases  which  seem  to  have  raised  it  —  Holden  v. 
Bank,  72  N.  Y.  286,  and  First  Nat'l  Bank  v.  New  Milford,  36  Conn.  93  —  were 
decided  upon  an  application  of  the  general  rule  to  the  facts,  without  any  allusion 
to  the  exception,  and  of  course  without  any  allusion  to  a  distinction  In  the  appli- 
cation of  the  exception  when  the  principal  is  a  corporation  Instead  of  a  natural 
person.  In  both  cases  the  principals  were  seeking  to  hold  an  advantage  acquired 
through  the  fraudulent  acts  of  their  agents,  and  were  chargeable  with  the  fraud 
by  virtue  of  the  familiar  principle,  that  a  person  cannot  ratify  acts  and  disaffirm 
the  fraud  that  is  a  constituent  part  of  them.  In  the  case  at  bar,  the  defendants 
do  not  set  up  any  claim  to  the  funds  in  dispute.  The  funds  have  passed  beyond 
their  reach  without  being  of  any  advantage  to  them.  In  many  of  the  cases  cited, 
the  principals  were  corporations  which  acted  solely  through  the  officers  who  com- 
mitted the  fraud.  Whatever  be  the  true  reason  for  the  exception,  —  whether  it 
be  the  presumption  that  the  agent  would  not  communicate  knowledge  of  his  fraud 
to  his  principal,  or  the  consideration  that  the  fraudulent  acts  are  not  within  the 
scope  of  the  agent's  employment  and  are  wholly  for  his  benefit,  —  it  is  not  perceived 
how  the  fact  that  the  principal  is  a  corporation  instead  of  a  natural  person  affects 
the  application  and  force  of  the  reason.  The  knowledge  of  a  corporation,  whether 
actual  or  imputed,  must  necessarily  be  that  of  Its  officers ;  but  this  circumstance 
does  not  transform  the  officers  into  principals.  The  stockholders  of  a  corporation 
like  that  of  the  defendants  furnish  the  ca'pital  and  presumably  carry  on  its  business. 
The  prlncipalshlp  of  the  corporation  is  embodied  in  them.  The  officers  and  agents 
of  the  corporation  exercise  only  delegated  authority  —  delegated  by  virtue  of  their 
election  to  office  under  the  law  of  the  state,  or  by  virtue  of  a  by-law  or  rule  of  the 
corporation,  or  by  virtue  of  its  habitual  manner  of  doing  business.  If,  as  the  plain- 
tiff argues,  the  assistant  treasurer  represented  the  defendant  in  the  receipt  of  the 
deposits,  Moore  was  not  the  only  officer  of  the  corporation  through  whom  the  cor- 
poration could  act  relating  to  the  matter.  The  facts  would  not  admit  of  the  applica< 
tion  of  the  rule  to  which  Mr.  Pomeroy's  doubt  relatea" 


CHAP.  XII.]  NOTICE  TO  AGENT.  465 

if  the  insured  is  not  the  "  sole,  absolute,  and  unconditional  owner  of 
the  property  insured,  or  if  said  property  be  a  building,  and  the  in- 
sured be  not  the  owner  of  the  land  on  which  said  building  stands, 
by  title  in  fee  simple,  and  this  fact  is  not  expressed  in  the  written 
portion  of  the  policy,  this  policy  shall  be  void."  Van  Schoick  v. 
Niagara  Fire  Ins.  Co.,  68  N.  Y.  434.  It  appears  that  Mandeville 
was  a  general  agent  of  the  defendant,  clothed  with  power  to  make 
contracts  of  insurance  and  to  issue  policies,  and  was  furnished  with 
printed  forms  which  he  filled  up  as  occasion  required.  He  was  agent 
for  several  other  companies  also,  which  presumably  upon  the  evi- 
dence was  known  to  the  defendant.  Andrews  had  been  employed 
by  him  for  several  years  before  the  policy  in  question  was  issued,  to 
solicit  insurance,  acting  as  Mandeville's  clerk  and  employe.  It  has 
been  the  common  custom  and  practice  of  agents  of  insurance  com- 
panies, having  the  power  of  general  agents,  to  employ  subordinates 
to  render  services  similar  to  those  rendered  by  Andrews,  and  we  have 
held  that  notice  to  such  a  sub-agent  while  engaged  in  soliciting 
insurance  of  any  fact  material  to  the  risk,  and  which  ajffects  the 
contract  of  insurance,  is  notice  to  the  company,  and  binds  the  com- 
pany to  the  same  extent  as  though  it  had  been  given  directly  to  the 
agent  himself.  Arff  v.  Starr  Ins.  Co.,  125  N.  Y.  57;  Bodine  v.  Ex- 
change Ins.  Co.,  51  Id.  117.  The  point,  therefore,  based  on  the 
condition  as  to  the  ownership  of  the  insured  property  must  be 
overruled. 

Judgment  affirmed. 


WHEATLAND   v.   PEYOE,   et   al. 

133  N.  Y.  97.     1892. 

Plaintiff  having  a  claim  against  Pryor,  a  member  of  defendant 
firm,  drew  a  draft  upon  him  and  indorsed  it  to  the  International  Trust 
Co.  of  Boston.  The  Trust  Co.  sent  it  to  the  Bank  of  the  Eepublie, 
New  York,  for  collection.  The  latter  presented  it  and  took  in  pay- 
ment a  check  drawn  by  Pryor  in  the  firm  name.  In  an  action  by 
plaintiff  against  the  firm  for  a  balance  due  him  on  various  trans- 
actions, the  latter  claims  that  plaintiff  had  notice  that  the  firm  funds 
were  used  to  pay  Pryor's  individual  debt  and  therefore  the  amount 
of  this  check  should  be  refunded  by  plaintiff  to  the  firm.  This  claim 
was  disallowed. 

Earl,  Ch.  J.  ...  If  we  assume  that  the  plaintiff  employed  the 
Boston  trust  company  to  collect  the  draft  on  Pryor,  and  that  the 
trust  company  thus  became  his  agent  for  that  purpose,  then  the  Bank 
of  the  Republic  became  the  agent  of  the  trust  company  and  not  of 

30 


466  WHEATLAND   V.    PRYOR,    ET   AL.  [CHAP.   XII. 

tlie  plaintiff.  Allen  v.  Merchants'  Bank  of  New  York,  23  "Wend. 
215;  Commercial  Bank  of  Penn.  v.  Union  Bank  of  New  York,  11 
N.  Y.  203;  Ayrault  v.  Pacific  Bank,  47  Id.  570.  The  Bank  of  the 
Kepublic  did  not  become  responsible  to  the  plaintiff,  and  the  plain- 
tiff could  not  in  any  way  control  or  direct  its  conduct  in  the  dis- 
t'harge  of  the  duty  which  it  had  assumed  to  the  trust  company. 
Therefore,  if  upon  the  facts  assumed,  it  knew  that  the  draft  drawn 
on  Pryor  individually  was  paid  with  firm  funds,  while  that  knowledge 
could  be  attributed  to  its  principal,  the  trust  company,  it  could  not 
be  attributed  to  the  plaintiff  who  was  not  its  principal.  The  reason 
for  the  rule  which  imputes  knowledge  of  an  agent  to  his  principal 
is  thus  stated  in  Story  on  Agency  (§  140)  :  "  Upon  general  principles 
of  public  policy,  it  is  presumed  that  the  agent  has  communicated 
such  facts  to  the  principal,  and  if  he  has  not,  still  the  principal, 
having  entrusted  the  agent  with  the  particular  business,  the  other 
party  has  a  right  to  deem  his  knowledge  and  acts  obligatory  upon 
the  principal,  otherwise  the  neglect  of  the  agent,  whether  designed 
or  undesigned,  might  operate  most  injuriously  to  the  rights  of  such 
party."  Now,  within  the  reason  of  this  rule,  could  the  constructive 
or  imputed  notice  to  the  Boston  trust  company  —  it  having  no 
actual  notice  —  be  imputed  to  the  plaintiff?  There  can  be  no  pre- 
sumption that  it  communicated  to  the  plaintiff  knowledge  which  it 
did  not  have ;  and  in  omitting  to  communicate  to  the  plaintiff  knowl- 
edge which  it  did  not  have,  it  was  guilty  of  no  wrong  and  no  neglect 
of  duty.  The  rule  of  constructive  notice  to  a  principal  can  have  no 
operation  whatever  in  a  case  where  the  agent  himself  has  not  received 
actual  notice.  There  are  undoubtedly  cases  where  an  agent  is  author- 
ized by  his  principal  to  employ  sub-agents,  and  where  the  nature  of 
the  business  entrusted  to  the  agent  is  such  that  it  must  be  assumed 
he  was  authorized  to  employ  sub-agents  for  the  principal;  and  in 
8uch  cases  it  is  frequently  true  that  both  the  agent  and  the  sub-agents 
are  the  representatives  of  the  principal,  and  the  knowledge  which 
either  of  them  acquired  in  the  business  may  be  imputed  to  the 
principal.  But  here  it  is  settled  upon  abundant  authority  that  the 
agent  employed  by  the  Boston  triTst  company  to  collect  this  draft 
had  no  relation  whatever  to  the  plaintiff,  and  owed  a  duty  —  not  to 
the  plaintiff  —  but  solely  to  the  trust  company.  So  in  any  view  of 
the  case,  the  knowledge  acquired  by  the  Bank  of  the  Republic  when 
it  received  the  firm  check  in  payment  of  the  draft  upon  Pryor  indi- 
vidually, cannot  be  imputed  to  the  plaintiff.  The  plaintiff  in  the 
end,  in  some  form,  received  his  money  from  the  Boston  trust  com- 
pany in  good  faith,  without  notice,  and  he  cannot  be  made  to  account 
for  it  to  the  defendants.  Stephens  v.  Board  of  Education,  79 
N.  Y.  183. 

The  judgment  should  be  aflfirmed  with  costs. 

All  concur.  Judgment  affirmed. 


I 


CHAP.  XII.]  NOTICE  TO  AGENT.  467 

HAINES    V.    STARKEY. 

82  Minn.  230.     1901. 

•  Action  to  recover  for  goods  sold  and  delivered.  Verdict  for 
plaintiffs.     From  an  order  granting  a  new  trial,  plaintiffs  appeal. 

Collins,  J.  The  plaintiffs,  co-partners,  were  non-residents.  The 
witness  Berkemeyer  resided  at  Minneapolis,  was  doing  business  under 
the  name  of  the  Northwestern  Slate  Company,  and  for  some  time 
had  been  the  undisclosed  agent  of  a  number  of  eastern  concerns 
selling  slate  in  this  state,  among  them  the  plaintiff's.  In  selling  for 
others,  Berkemeyer  had  acquired  a  knowledge  of  the  partnership 
which  had  existed  between  these  defendants  for  some  years  prior  to 
February,  1896,  and  had  made  sales  to  them  as  such  co-partners. 
The  sale  in  question  was  made  by  Berkemeyer  in  September,  1897, 
the  plaintiffs  relying  upon  his  statements  that  the  defendants  were 
co-partners,  and  having  no  knowledge  to  the  contrary.  There  had 
never  been  any  prior  dealings  between  the  parties,  nor  did  plaintiffs 
know  of  the  existence  of  such  a  firm  prior  to  this  sale.  An  issue  was 
made  at  the  trial  as  to  whether  Berkemeyer  had  been  given  actual 
notice,  or  had  knowledge  amounting  to  actual  notice,  of  the  dissolu- 
tion of  the  partnership  prior  to  the  sale,  but  on  this  question  the  jury 
evidently  found  for  the  plaintiffs.  As  the  latter  had  not  dealt  with 
the  defendants  in  any  manner  prior  to  the  dissolution,  and  knew 
nothing  of  the  firm,  it  was  not  necessary  that  actual  notice  of  such 
dissolution  should  be  given  to  them,  nor  was  constructive  notice 
required.  This  rule  is  clearly  stated  in  Swigert  v.  Aspden,  52  Minn. 
565,  54  N.  W.  738,  and  would  control  this  case,  were  it  not  that  the 
goods  were  sold  through  Berkemeyer,  agent  of  plaintiffs,  who  were 
undisclosed  to  the  defendants  or  either  of  them. 

As  stated  by  respondents'  counsel  in  their  brief,  the  plaintiffs  were 
not  entitled  to  any  notice  of  the  dissolution.  They  were  bound  to 
know  to  whom  the  sale  was  made,  and  cannot  avail  themselves  of  the 
fact  that  a  partnership  had  previously  existed,  unless  the  knowledge 
of  Berkemeyer,  acquired  while  acting  as  agent  for  other  parties,  is 
available  to  them,  and  through  his  knowledge  they  were  placed  on 
the  same  footing  as  those  who  had  formerly  dealt  with  the  partner- 
ship, and  had  no  notice  of  its  dissolution.  If  plaintiffs  were  not 
entitled  to  the  benefit  of  Berkemeyer's  knowledge,  acquired  as  before 
stated,  it  is  manifest  that  they  cannot  recover  in  an  action  brought 
against  defendants  as  such  partners. 

In  Lebanon  Sav.  Bank  v.  Hollenbeck,  29  Minn.  322,  13  N.  W.  145, 
the  rule  was  announced  that  knowledge  of  an  agent  acquired  previous 
to  the  agency,  but  actually  present  in  his  mind  during  the  agency, 
and  while  acting  for  his  principal  in  a  particular  transaction  or 


468  HAINES   V.  STARKET.  [CHAP.   XH. 

matter,  will,  as  respects  such  transaction  or  matter,  be  notice  to  the 
principal,  and  will  bind  him  as  fully  as  if  originally  acquired  by 
him.  It  was  there  said  that  the  rule  was  a  salutary  one,  well  cal- 
culated to  promote  justice  and  fair  dealing,  if  carefully  applied.  See, 
also,  1  Am.  &  Eng.  Enc.  Law  (2d  Ed.)  1150.  Notice  or  knowledge 
of  the  agent  of  facte  which  enter  into  and  give  character  to  acts  done 
for  the  principal  affect  the  latter.  He  cannot  accept  the  act  of  the 
agent  so  far  as  it  is  advantageous,  and  reject  any  infirmity  which 
attaches  to  it.  If  the  principal  is  bound  by  notice  to  or  knowledge 
of  his  agent,  it  would  seem  to  follow  that  he  is  also  entitled  to  the 
benefit  of  notice  to,  or  knowledge  of,  the  agent  in  respect  to  any 
particular  transaction.  Let  us  suppose  that  after  the  dissolution,  but 
with  full  notice  thereof,  Berkemeyer  had  continued  to  sell  to  defend- 
ants for  principals  who  had  previously  known  of  the  co-partnership, 
but  were  not  advised  of  ite  termination.  Berkemeyer's  knowledge  of 
the  dissolution  would  certainly  be  imputablie  to  his  principals,  and 
their  personal  ignorance  of  the  fact  would  not  avail.  If  his  prin- 
cipals in  such  a  case  would  be  bound  by  his  knowledge,  it  must  be 
that  they  may  avail  themselves  of  his  knowledge  of  the  existence  of 
the  firm,  although  obtained  in  prior  transactions. 

The  Bank  Case  and  the  rule  therein  stated  were  discussed  in 
Trentor  v.  Pothen,  46  Minn.  298,  49  N.  W.  129,  in  which  it  was  said 
that  the  rule  applies  only  to  cases  where  the  knowledge  is  possessed 
by  an  agent  within  the  scope  of  whose  authority  the  subject-matter 
lies.  The  facte  of  which  the  agent  had  notice  must  be  within  the 
scope  of  the  agency,  so  that  it  becomes  his  duty  to  act  upon  them 
and  communicate  them  to  his  principal.  Whether  the  principal  is 
bound  by  contracte  Altered  into  by  the  agent  depends  upon  the  nature 
and  extent  of  the  agency.  The  effect  upon  the  principal  of  notice  to, 
or  knowledge  of,  his  agent  must  depend  upon  the  same  conditions. 
This  must  also  be  true  when  ascertaining  whether  the  agent's  pre- 
viously acquired  knowledge  is  available  to  his  principal.  So  that, 
in  either  case,  it  becomes  of  primary  importance  to  ascertain  the 
exact  scope  of  the  agency. 

In  the  case  at  bar  the  agent  was  authorized  to  sell  the  plaintiffs' 
merchandise  upon  credit  to  parties  who  chose  to  buy.  He  had  full 
authority  to  deal  with  reference  to  the  property,  and  to  ascertain  to 
whom  he  was  selling,  whether  a  co-partnership  or  a  corporation.  In 
these  respects  the  plaintiffs  conferred  full  power  upon  him.  It  was 
his  duty  to  ascertain  —  to  act  upon  —  what  he  learned,  and  to  com- 
municate to  his  principals  whether  the  sale  was  made  to  the  two 
defendants  as  co-partners  or  to  some  other  concern.  Berkemeyer  had 
authority  to  deal  with  reference  to  the  matters  affected  by  his  prior 
knowledge  that  a  partnership  had  existed  between  the  defendante  a 
few  months  before.  He  might  have  inquired  as  to  whether  it  still 
continued,  but  surely  nothing  of  this  kind  would  have  been  demanded 


CHAP.   XII.]  NOTICE  TO  AGENT.  469 

if  the  sale  had  been  on  his  own  account,  or  for  a  concern  which  had 
previously  sold  to  defendant  finn.  Why  should  more  be  demanded 
because  the  sale  was  for  another  party,  new  to  defendants,  and  un- 
acquainted with  their  business  relations  or  connections?  We  are  of 
the  opinion  that  the  plaintiffs  were  entitled  to  the  advantages  and 
benefits  of  knowledge  previously  acquired  by  their  agent  as  to  the 
existence  of  the  firm  of  Starkey  &  Tyra,  obtained,  as  it  was,  by  actual 
dealing  with"  the  firm,  and  said  knowledge  having  actually  entered 
into,  and  become  a  part  of,  the  transaction.    Story,  Ag.  §  418. 

It  is  obvious  that  if  Berkemeyer,  an  undisclosed  agent,  had  brought 
action  upon  this  claim  in  his  own  name,  he  could  have  recovered 
upon  the  ground  that  he  had  not  been  notified  of  the  dissolution,  nor 
had  he  actual  knowledge  which  could  be  held  equivalent  to  notice. 
It  is  equally  as  obvious  that  in  this  respect  plaintiffs  stand  in  Berke- 
raeyer's  shoes.  This  disposes  of  the  case,  and  we  need  not  consider 
more  particularly  the  assignments  of  error. 

Brown,  J.    I  dissent.  Order  reversed. 


470  HANNON   V.   SIEGEL-COOPER  CO.  [cHAP.   XIII. 


CHAPTER   XIII. 
Liability  of  Principal  fob  Toets  of  Agent. 

1.    Liability  for  Torts  Generally. 
HANNON   V.    SIEGEL-COOPER   CO. 

167  N.  Y.  244.     1901. 

Appeal  from,  a  judgment  of  the  Appellate  Division  of  the 
Supreme  Court  in  the  second  judicial  department  affirming  a  judg- 
ment in  favor  of  plaintiff  entered  upon  a  verdict  and  an  order 
denying  a  motion  for  a  new  trial. 

The  nature  of  the  action  and  the  facts,  so  far  as  material,  are 
stated  in  the  opinion. 

CuLLEN,  J.  The  complaint  charged  that  the  defendant,  a  cor- 
poration, conducting  a  department  store  in  the  city  of  New  York, 
represented  and  advertised  itself  as  carrying  on  the  practice  of 
dentistry  in  one  of  its  departments;  that  the  plaintiff  employed 
the  defendant  to  render  the  necessar}"^  professional  labor  in  the 
treatment  of  her  teeth  and  paid  therefor;  that  the  defendant's 
servant  performed  said  work  so  carelessly,  negligently  and  unskil- 
fully that  plaintiff's  jaws  and  gums  were  injured,  for  which  mal- 
practice she  claimed  damages.  The  answer  in  substance  was  a 
general  denial.  Plaintiff  had  a  verdict  at  the  Trial  Term  and  the 
judgment  on  that  verdict  has  been  unanimously  affirmed  by  the 
Appellate  Division. 

The  Public  Health  Law,  by  §  164,  makes  it  a  misdemeanor  for 
any  person  to  practise  or  to  hold  himself  out  to  the  public  as 
practising  dentistry  in  any  county  in  this  state  without  being 
licensed  to  practise  as  such  and  registered  in  the  office  of  the 
clerk  of  the  county,  and  it  would  seem  that  the  action  of  the  de- 
fendant in  assuming  to  carry  on  the  business  of  dentistry  was 
illegal  and  ultra  vires.  But  though  it  was  beyond  the  corporate 
powers  of  the  defendant  to  engage  in  the  business  this  does  not 
relieve  it  from  the  torts  of  its  servants  committed  therein  (Bissell 
v,  Mich.  Southern  R.  R.  Co.,  22  N.  Y.  258)  and  the  unanimous 
affirmance  of  the  Appellate  Division  is  conclusive  to  the  effect 
that  it  either  practised  dentistry  or  held  itself  out  as  practising 
dentistry.     The  only   question   cognizable  by   us   arises   upon   the 


CHAP.  XIII.]  LIABILITY   FOR  TORTS  GENERALLY.  471 

appellant's  exception  to  the  following  charge  of  the  trial  court: 
"  If  the  defendants  in  this  case  made  representations  to  the  plain- 
tiff, on  which  she  relied,  that  they  were  conducting  a  dentist  busi- 
ness in  their  store,  and  if  she,  because  of  those  representations, 
hired  the  workman  in  the  store  of  the  defendants,  with  no  knowl- 
edge that  the  business  was  conducted  by  Mr.  Hayes  individually, 
you  may  find  the  defendants  responsible  for  the  acts  of  the  dentist 
who  treated  the  plaintiff,  even  though  Mr.  Hayes,  as  a  matter 
of  fact,  was  the  real  owner  of  that  department  of  the  defendants' 
store."  The  appellant's  counsel  does  not  deny  the  general  doctrine 
that  a  person  is  estopped  from  denying  his  liability  for  the  con- 
duct of  one  whom  he  holds  out  as  his  agent  against  persons  who 
contract  with  him  on  the  faith  of  the  apparent  agency,  but  he 
insists  that  the  doctrine  does  not  apply  to  the  present  case,  because 
the  action  is  brought  in  tort  and  not  on  contract.  It  may  very 
well  be  that  where  the  duty,  the  violation  of  which  constitutes  the 
tort  sued  for,  springs  from  no  contract  with,  nor  relation  to,  the 
principal,  a  party  would  not  be  estopped  from  denying  that 
the  wrongdoer  was  his  agent,  even  though  he  had  held  him  out 
as  such.  In  such  a  case  the  representation  of  the  principal  would 
be  no  factor  in  producing  the  injury  complained  of.  But  whenever 
the  tort  consists  of  a  violation  of  a  duty  which  springs  from  the 
contract  between  the  parties,  the  ostensible  principal  should  be 
liable  to  the  same  extent  in  an  action  ex  delicto  as  in  one  ex  con- 
tractu. It  is  urged  that  the  representation  that  the  operating 
dentists  were  the  defendant's  servants  did  not  mislead  the  plaintifT 
to  her  injur}'  and,  therefore,  should  not  estop  the  defendant  from 
asserting  the  truth.  There  is  no  force  in  this  claim.  If  A  contracts 
with  the  ostensible  agent  of  B  for  the  purchase  of  goods,  he  relies 
not  only  on  the  business  reputation  of  B,  as  to  the  goods  he  manu- 
factures or  sells,  but  on  the  pecuniary  responsibility  of  B  to  answer 
for  any  default  in  carrying  out  the  contract.  So  here  the  plaintiff 
had  a  right  to  rely  not  only  on  the  presumption  that  the  defendant 
would  employ  a  skilful  dentist  as  its  servant,  but  also  on  the  fact 
that  if  that  servant,  whether  skilful  or  not,  was  guilty  of  any 
malpractice,  she  had  a  responsible  party  to  answer  therefor  in 
damages. 

The  judgment  appealed  from  should  be  affirmed,  with  costs. 

O'Brien,  Bartlett,  Martin,  Vann  and  Landon,  J  J.,  concur; 
Parker,  Ch.  J.,  takes  no  part.  Judgment  affirmed. 


472  BABWICK   V.   ENG.   JOINT  STOCK  BANK.       [CHAP.   Kill. 

SINGER   MANUFACTURING   CO.   v.   RAHN. 

132  U.  S.  518.     1889. 
[Reported  herein  at  p.  7.] 


DEMPSEY   V.    CHAMBERS. 

154  Mass.  330.     1891. 
[Reported  herein  at  p.  119.] 


2.    Fraud  for  Benefit  of  Principal. 
BARWICK   V.    ENGLISH   JOINT    STOCK   BANK. 

L.  R.  2  Ex.  (Chamber)  259.     1867. 

Action  in  tort  for  damages  for  fraud.  At  the  close  of  plaintiff's 
case  the  trial  court  directed  a  non-suit  on  the  ground  that  there 
was  no  evidence  proper  to  go  to  the  jury.    Bill  of  exceptions. 

WiLLES^  J.  (for  the  court^).  This  case,  in  which  the  court  took 
time  to  consider  their  judgment,  arose  on  a  bill  of  exceptions  to 
the  ruling  of  my  Brother  Martin  at  the  trial  that  there  was  no 
evidence  to  go  to  the  jury. 

It  was  an  action  brought  for  an  alleged  fraud,  which  was  de- 
scribed in  the  pleadings  as  being  the  fraud  of  the  bank,  but  which 
the  plaintiff  alleged  to  have  been  committed  by  the  manager  of  the 
bank  in  the  course  of  conducting  their  business.  At  the  trial, 
two  witnesses  were  called,  first,  Barwick,  the  plaintiff,  who  proved 
that  he  had  been  in  the  habit  of  supplying  oats  to  a  customer  of 
the  bank  of  the  name  of  Davis;  and  that  he  had  done  so  upon  a 
guarantee  given  to  him  by  the  bank,  through  their  manager,  tlie 
effect  of  which  probably  was,  that  the  drafts  of  the  plaintiff  upon 
Davis  were  to  be  paid,  subject  to  the  debt  of  the  bank.  What  were 
the  precise  terms  of  the  guarantee  did  not  appear,  but  it  seems  that 
the  plaintiff  became  dissatisfied  with  it,  and  refused  to  supply  more 
oats  without  getting  a  more  satisfactory  one;  that  he  applied  to 
the  manager  of  the  bank,  and  that  after  some  conversation  between 
them,  a  guarantee  was  given,  which  was  in  this  form :  — 

*   WiLLBS,  BI.ACKBCBN,  K£ATINO,  MSLLOS,  MONTAOCX  SUITH,  and  LUSH,  JJ. 


CHAP.   XIII.]  FRAUD   FOR  BENEFIT  OF  PRINCIPAL.  473 

Deab  Sir,  —  Referring  to  our  conversation  of  this  morning,  I  beg  to  repeat 
that  if  you  sell  to,  or  purchase  for,  J.  Davis  and  Son  not  exceeding  1,000 
quarters  of  oats  for  the  use  of  their  contract,  I  will  honor  the  check  of  Messrs. 
J.  Davis  and  Son  in  your  favor  in  payment  of  the  same,  on  receipt  of  the  money 
from  the  commissariat  in  payment  of  forage  supplied  for  the  present  month, 
in  priority  to  any  other  payment  except  to  this  bank;  and  provided,  as  I  ex- 
plained to  you,  that  they,  J.  Davis  and  Son,  are  able  to  continue  their  contract, 
and  are  not  made  bankrupts. 

(Signed.)  Don.  M.  Dkwab,  Manager. 

The  plaintiff  stated  that  in  the  course  of  the  conversation  as 
to  the  guarantee,  the  manager  told  him  that  whatever  time  he 
received  the  government  check,  the  plaintiff  should  receive  the 
money. 

Now,  that  being  the  state  of  things  upon  the  evidence  of  the 
plaintiff,  it  is  obvious  that  there  was  a  case  on  which  the  jury 
might  conclude,  if  they  thought  proper,  that  the  guarantee  given 
by  the  manager  was  represented  by  him  to  be  a  guarantee  which 
would  probably,  or  might  probably,  be  paid,  and  that  the  plaintiff 
took  the  guarantee,  supposing  that  it  was  of  some  value,  and  that 
the  check  would  probably,  or  might  probably,  be  paid.  But  if  the 
manager  at  the  time,  from  his  knowledge  of  the  accounts,  knew  that 
it  was  improbable  in  a  very  high  d^ree  that  it  would  be  paid,  and 
knew  and  intended  that  it  should  not  be  paid,  and  kept  back  from 
the  plaintiff  the  fact  which  made  the  payment  of  it  improbable  to  the 
extent  of  being  as  a  matter  of  business  impossible,  the  jury  might  well 
have  thought  (and  it  was  a  matter  within  their  province  to  decide 
upon)  that  he  had  been  guilty  of  a  fraud  upon  the  plaintiff. 

Now,  was  there  evidence  that  such  knowledge  was  in  the  mind 
of  the  manager?  The  plaintiff  had  no  knowledge  of  the  state  of 
the  accounts,  and  the  manager  made  no  communication  to  him  with 
respect  to  it.  But  the  evidence  of  Davis  was  given  for  the  purpose 
of  supplying  that  part  of  the  case;  and  he  stated  that,  immediately 
before  the  guarantee  had  been  given,  he  went  to  the  manager,  and 
told  him  it  was  impossible  for  him  to  go  on  unless  he  got  further 
supplies,  and  that  the  government  were  buying  in  against  him; 
to  which  the  manager  replied,  that  Davis  must  go  and  try  his 
friends,  on  which  Davis  informed  the  manager  that  the  plaintiff 
would  go  no  further  unless  he  had  a  further  guarantee.  Upon  that 
the  manager  acted ;  and  Davis  added,  "  I  owed  the  bank  above 
£12,000."  The  result  was  that  oats  were  supplied  by  the  plaintiff 
to  Davis  to  the  amount  of  £1,227;  that  Davis  carried  out  his  con- 
tract with  the  government,  and  that  the  commissariat  paid  him 
the  sum  of  £2,676,  which  was  paid  by  him  into  the  bank.  He  there- 
upon handed  a  check  to  the  plaintiff,  who  presented  it  to  the  bank, 
and  without  further  explanation  the  check  was  refused. 

This  is  the  plain  state  of  the  facts;  and  it  was  contended  on 


474  BARWICK   V.   ENG.   JOINT   STOCK  BANK.         [CHAP.   XIII. 

behalf  of  the  bank  that,  inasmuch  as  the.  guarantee  contains  a 
stipulation  that  the  plaintiff's  debt  should  be  paid  subsequent  to 
the  debt  of  the  bank,  which  was  to  have  priority,  there  was  no  fraud. 
We  are  unable  to  adopt  that  conclusion.  I  speak  sparingly,  because 
we  desire  not  to  anticipate  the  judgment  which  th^  constitutional 
tribunal,  the  jury,  may  pass.  But  they  might,  upon  these  facts, 
justly  come  to  the  conclusion  that  the  manager  knew  and  intended 
that  the  guarantee  should  be  unavailing;  that  he  procured  for  his 
employers,  the  bank,  the  government  check,  by  keeping  back  from 
the  plaintiff  the  state  of  Davis's  account,  and  that  he  intended  to 
do  so.  If  the  jury  took  that  view  of  the  facts,  they  would  conclude 
that  there  was  such  a  fraud  in  the  manager  as  the  plaintiff 
complained  of. 

If  there  be  fraud  in  the  manager,  then  arises  the  question, 
whether  it  was  such  a  fraud  as  the  bank,  his  employers,  would  be 
answerable  for.  With  respect  to  that,  we  conceive  we  are  in  no 
respect  overruling  the  opinions  of  my  Brothers  Martin  and 
Bramwell  in  Udell  v.  Atherton,  7  H.  &  N.  172;  30  L.  J.  (Exch.) 
337,  the  case  most  relied  upon  for  the  purpose  of  establishing  the 
proposition  that  the  principal  is  not  answerable  for  the  fraud  of 
his  agent.  Upon  looking  at  that  case,  it  seems  pretty  clear  that 
the  division  of  opinion  which  took  place  in  the  Court  of  Exchequer 
arose,  not  so  much  upon  the  question  whether  the  principal  is 
answerable  for  the  act  of  an  agent  in  the  course  of  his  business, 
—  a  question  which  was  settled  as  eariy  as  Lord  Holt's  time  (Hem 
V.  Nichols,  1  Salk.  289 ) ,  —  but  in  applying  that  principle  to  the 
peculiar  facts  of  the  case;  the  act  which  was  relied  upon  there 
as  constituting  a  liability  in  the  sellers  having  been  an  act  adopted 
by  them  under  peculiar  circumstances,  and  the  author  of  that  act 
not  being  their  general  agent  in  business,  as  the  manager  of  a  bank 
is.  But  with  respect  to  the  question,  whether  a  principal  is  answer- 
able for  the  act  of  his  agent  in  the  course  of  his  master's  business, 
and  for  his  master's  benefit,  no  sensible  distinction  can  be  drawn 
between  the  case  of  fraud  and  the  case  of  any  other  wrong.  The 
general  rule  is,  that  the  master  is  answerable  for  every  such  wrong 
of  the  servant  or  agent  as  is  committed  in  the  course  of  the  ser- 
vice and  for  the  master's  benefit,  though  no  express  command  or 
privity  of  the  master  be  proved.  See  Laugher  v.  Pointer,  5  B.  & 
C.  547,  at  p.  554.  That  principle  is  acted  upon  every  day  in  run- 
ning dovni  cases.  It  has  been  applied  also  to  direct  trespass  to 
goods,  as  in  the  case  of  holding  the  owners  of  ships  liable  for  the 
act  of  masters  abroad,  improperly  selling  the  cargo.  Ewbank  v. 
Nutting,  7  C.  B.  797.  It  has  been  held  applicable  to  actions  of  false 
imprisonment,  in  cases  where  officers  of  railway  companies,  in- 
trusted with  the  execution  of  by-laws  relating  to  imprisonment, 
and  intending  to  act  in  the  course  of  their  duly,  improperly  im- 


CHAP.    XIII.]  FRAUD   FOR   BENEFIT  OF   PRINCIPAL.  475 

prison  persons  who  are  supposed  to  come  within  the  terms  of  the 
by-laws.  Goff  i'.  Great  Northern  Railway  Company,  3  E.  &  E.  672; 
30  L.  J.  (Q.  B.)  148,  explaining  (at  3  E.  &  E.  p.  683)  Roe  v. 
Birkenhead  Railway  Company,  7  Exch.  36;  and  see  Barry  v.  Mid- 
land Railway  Company,  Ir.  L.  Rep.  1  C.  L.  130.  It  has  been  acted 
upon  where  persons  employed  by  the  owners  of  boats  to  navigate 
them  and  to  take  fares,  have  committed  an  infringement  of  a  ferry, 
or  such  like  wrong.  Huzzey  v.  Field,  2  C.  M.  &  R.  432,  at  p.  440. 
In  all  these  cases  it  may  be  said,  as  it  was  said  here,  that  the 
master  has  not  authorized  the  act.  It  is  true,  he  has  not  authorized 
the  particular  act,  but  he  has  put  the  agent  in  his  place  to  do  that 
class  of  acts,  and  he  must  be  answerable  for  the  manner  in  which 
the  agent  has  conducted  himself  in  doing  the  business  which  it 
was  the  act  of  his  master  to  place  him  in. 

The  only  other  point  which  was  made,  and  it  had  at  first  a  some- 
what plausible  aspect,  was  this:  It  is  said,  if  it  be  established  that 
the  bank  are  answerable  for  this  fraud,  it  is  the  fraud  of  the  mana- 
ger, and  ought  not  to  have  been  described,  as  here,  as  the  fraud 
of  the  bank.  I  need  not  go  into  the  question  whether  it  be  necessary 
to  resort  to  the  count  in  case  of  fraud,  or  whether,  under  the  cir- 
cimistances,  money  having  been  actually  procured  for,  and  paid 
into,  the  bank,  which  ought  to  have  got  into  the  plaintiff's  hands, 
the  count  for  money  had  and  received  is  not  applicable  to  the  case. 
I  do  not  discuss  that  question,  because  in  common-law  pleading 
no  such  difficulty  as  is  here  suggested  is  recognized.  If  a  man  is 
answerable  for  the  wrong  of  another,  whether  it  be  fraud  or  other 
wrong,  it  may  be  described  in  pleading  as  the  wrong  of  the  person 
who  is  sought  to  be  made  answerable  in  the  action.  That  was  the 
decision  in  the  case  of  Raphael  v.  Goodman,  8  A.  &  E.  565.  The 
sheriff  sued  upon  a  bond;  plea,  that  the  bond  was  obtained  by  the 
sheriff  and  others  by  fraud;  proof,  that  it  was  obtained  by  the  fraud 
of  the  officer;  held,  the  plea  was  sufficiently  proved. 

Under  these  circumstances,  without  expressing  any  opinion  as 
to  what  verdict  ought  to  be  arrived  at  by  the  jury,  especially  con- 
sidering that  the  whole  case  may  not  have  been  before  them,  we 
think  this  is  a  matter  proper  for  their  determination,  and  there 
ought,  therefore,  to  be  a  venire  de  novo.  Venire  de  novo. 


HASKELL   V.    STARBIRD. 

152  Mass.  117.     1890. 

Tort  for  false  and  fraudulent  representations  in  the  sale  of  land. 
Judgment  for  plaintiff.     Defendant  alleges  exceptions. 


476  HASKELL   V.   STARBIRD.  [CHAP.    XIII. 

The  sale  was  made  by  defendant  through  an  agent.  The  court 
was  asked  to  charge  that :  "  If  the  jury  shall  find  that  Eockwell 
was  the  agent  of  the  defendant  in  selling  the  land  in  question,  the 
plaintiff  cannot  recover,  unless  it  is  proved  that  the  defendant  was 
privy  to  or  adopted  the  misrepresentation  relied  on."  This  request 
was  refused,  and  the  court  charged,  in  substance,  that  if  the  agent 
was  authorized  to  sell  the  land  the  defendant  would  be  liable  for 
the  methods  employed,  and  therefore  liable  for  the  agenfs 
fraudulent  representations. 

Devens,  J.  .  .  .  The  instructions  of  the  court  upon  the  second 
request  for  a  ruling  —  which  was  in  substance,  that,  even  if  Eock- 
well was  the  agent  of  the  defendant  to  sell,  the  plaintiff  could  not 
recover  imless  it  was  proved  that  the  defendant  was  privy  to  or 
adopted  the  misrepresentations  relied  on  —  made  the  defendant 
responsible  for  the  false  and  fraudulent  representations  as  to  the 
land  made  by  Eockwell,  if  Eockwell  was  employed  by  the  defendant 
to  sell  the  land  as  his  agent,  notwithstanding  Eockwell  was  not 
authorized  to  make  them,  and  notwithstanding  the  defendant  did 
not  know  that  he  had  made  them  until  after  the  conveyance.  They 
held  that  the  defendant,  by  employing  Eockwell  as  his  agent  to 
make  the  sale,  became  responsible  for  the  methods  which  he  adopted 
in  so  doing.  The  defendant  contends  that  Eockwell  was  a  special 
agent  only,  and  that,  as  his  authority  extended  only  to  the  sale  of 
this  single  tract  of  land,  the  defendant  is  not  responsible  for  any 
representations  Eockwell  might  have  made  which  he  did  not 
authorize. 

The  cases  in  which  a  distinction  has  been  made  in  the  responsi- 
bility of  a  principal  for  the  acts  of  general  and  of  special  agents 
are  those  where  the  special  agent  did  not  have,  and  was  not  held 
out  as  having,  full  authority  to  do  that  which  he  undertook  to  do, 
and  where  one  dealing  with  him  was  informed,  or  should  have 
informed  himself,  of  the  limitations  of  his  authority.  There  is 
no  distinction  in  the  matter  of  responsibility  for  the  fraud  of  an 
agent  authorized  to  do  business  generally,  and  of  an  agent  employed 
to  conduct  a  single  transaction,  if,  in  either  case,  he  is  acting  in 
the  business  for  which  he  was  employed  by  the  principal,  and  had 
full  authority  to  complete  the  transaction.  While  the  principal 
may  not  have  authorized  the  particular  act,  he  has  put  the  agent 
in  his  place  to  make  the  sale,  and  must  be  responsible  for  the  man- 
ner in  which  he  has  conducted  himself  in  doing  the  business  which 
the  principal  intrusted  to  him.  Benjamin  on  Sale  (3d  Am.  ed.), 
§  465.  The  rule  that  a  principal  is  liable  civilly  for  the  neglect, 
fraud,  deceit,  or  other  wrongful  act  of  his  agent,  although  the 
principal  did  not  in  fact  authorize  the  practice  of  such  acts,  is 
quoted  with  approbation  by  Chief  Justice  Shaw  in  Lock  v.  Stearns, 
1  Met.  560.    That  a  principal  is  liable  for  the  false  representations 


CHAP.   XIII.]  FRAUD   FOR   BENEFIT  OF   PRINCIPAL.  477 

of  his  agent,  although  personally  innocent  of  the  fraud,  is  said  by 
Mr.  Justice  Hoar,  in  White  v.  Sawyer,  16  Gray,  586,  589,  to  be 
settled  by  the  clear  weight  of  authority. 

In  the  case  at  bar,  if  the  false  representations  were  made  by 
Rockwell,  they  were  made  by  him  while  acting  within  the  scope 
of  his  authority,  in  making  a  sale  of  land  which  the  defendant 
employed  him  to  sell,  and  the  instruction  properly  held  the  de- 
fendant answerable  for  the  damage  occasioned  thereby.  Lothrop 
V.  Adams,  133  Mass.  471.  The  defendant  urges  that,  even  if  in  an 
action  of  contract  the  false  representations  of  Rockwell  as  his  agent 
might  render  the  defendant  responsible  as  the  principal,  he  cannot 
thus  be  made  responsible  in  an  action  of  tort  for  deceit,  and  that  in 
such  action  the  misrepresentation  must  be  proved  to  have  been  that 
of  the  principal.  It  is  sufficient  to  say,  that  no  such  point  was  pre- 
sented at  the  trial,  nor  do  we  consider  that  any  such  distinction 
exists.  .  .  .  Exceptions  overruled. 


BENNETT   V.   JUDSON. 

21  N.  Y.  238.     1860. 

Complaint  that  the  defendant,  for  the  purpose  of  effecting  a 
sale  to  the  plaintiff  of  certain  lands  in  the  states  of  Indiana  and 
Illinois,  made  false  and  fraudulent  representations  in  respect  to 
their  location,  proximity  to  a  river  and  railroad,  their  agricultural 
qualities,  etc. ;  that  the  plaintiff,  confiding  in  such  representations, 
bought  the  land,  paid  for  it  and  incurred  expenses  in  removing  his 
family  to  the  same  and  bringing  them  back  after  he  discovered  that 
the  representations  were  false  and  the  lands  comparatively  worth- 
less. Upon  the  trial  at  the  Steuben  circuit  before  Mr.  Justice 
Johnson,  it  appeared  that  the  sale  of  the  lands  was  negotiated  by 
one  Davis,  an  agent  of  the  defendant;  that  neither  the  defendant 
nor  Davis  had  any  personal  knowledge  in  respect  to  the  lands,  but 
that  the  representations  made  by  the  latter  were  but  a  repetition 
of  statements  made  to  him  by  a  brother  of  the  defendant  who  had 
formerly  owned  the  lands,  and  who  had  made  such  statements  from 
information  derived  by  him  from  persons  residing  in  the  states 
of  Indiana  and  Illinois,  and  whom  he  had  employed  as  agents  for 
the  payment  of  taxes.  The  statement  was  made  in  general  terms, 
without  referring  to  any  other  person  as  authority  for  its  truth. 
The  defendant  had  never  been  in  the  vicinity  of  the  land  sold  by 
Davis  in  his  behalf.  The  defendant's  brother  had,  several  years 
before,  been  upon  lands  which  were  pointed  out  to  him  as  those 
which  were  conveyed  to  the  plaintiff,  and  the  land  which  he  saw 
justified  the  description  which  he  furnished  to  Davis,  and  which 


478  BENNETT   V.   JDDSON.  [CHAP.    XIII. 

was  repeated  in  substance  to  the  plaintiff.  That  description  was 
grossly  inaccurate  in  particulars  material  to  the  value  of  the  land, 
but  the  evidence  tended  to  prove  that  the  defendant,  his  brother  and 
Davis  were  all,  and  alike,  ignorant  that  such  description  was  false. 
The  defendant  insisted  that  there  was  no  evidence  of  fraud  on  his 
part,  or  that  of  his  agent,  to  be  submitted  to  the  jury,  and  requested 
the  judge  to  direct  a  verdict  in  his  favor.  The  judge  refused  and 
the  defendant  excepted.  The  judge  submitted  it  to  the  jury  as 
a  question  of  fact  whether  the  defendant's  agent  or  agents  had 
practised  a  fraud  in  making  a  bargain  with  the  plaintiff;  and 
charged  them  that  if  such  was  the  fact,  the  defendant  having  re- 
ceived the  fruits  of  the  bargain  was  liable  to  the  plaintiff  for  the 
fraud,  although  he  did  not  authorize  such  statement  or  know  that 
it  was  made,  or  at  the  time  know  whether  it  was  true  or  false. 
The  defendant  excepted.  The  plaintiff  had  a  verdict  and  judgment, 
which  having  been  affirmed  at  general  term  in  the  seventh  district, 
the  defendant  appealed  to  this  court. 

CoMSTOCK,  Ch.  J.  There  is  no  evidence  that  the  defendant 
authorized  or  knew  of  the  alleged  fraud  committed  by  his  agent 
Davis  in  negotiating  the  exchange  of  lands.  Nevertheless,  he  can- 
not enjoy  the  fruits  of  the  bargain  without  adopting  all  the  instru- 
mentalities employed  by  the  agent  in  bringing  it  to  a  consumma- 
tion. If  an  agent  defrauds  the  person  with  whom  he  is  dealing, 
the  principal,  not  having  authorized  or  participated  in  the  wrong, 
may  no  doubt  rescind,  when  he  discovers  the  fraud,  on  the  terms 
of  making  complete  restitution.  But  so  long  as  he  retains  the 
benefits  of  the  dealing  he  cannot  claim  immunity  on  the  ground 
that  the  fraud  was  committed  by  his  agent  and  not  by  himself. 
This  is  elementary  doctrine  and  it  disposes  of  one  of  the  questions 
raised  at  the  trial. 

The  complaint,  in  setting  forth  the  cause  of  action,  counts  upon 
false  representations  made  by  the  defendant,  without  any  reference 
to  the  agent.  This  mode  of  stating  the  case  we  think  was  proper 
under  any  system  of  pleading.  The  same  rule  of  law  which  imputes 
to  the  principal  the  fraud  of  the  agent  and  makes  him  answerable 
for  the  consequences,  justifies  the  allegation  in  pleading  that  the 
principal  himself  committed  the  wrong.  If  this  were  otherwise,  the 
pleading  was  nevertheless  amendable  at  the  trial.  The  allegation 
might  have  been  made  to  conform  to  the  proof,  and  where  this 
might  properly  be  done  at  the  trial,  it  can  be  done  even  after  the 
judgment.  This  court  in  such  cases  never  reverses  a  judgment, 
although  the  amendment  has  not  actually  been  made.  Lounsbury 
V.  Purdy,  18  N.  Y.  515. 

The  question  of  fact  litigated  at  the  trial  was,  whether  the  repre- 
sentations of  Davis,  the  agent  of  the  defendant,  concerning  the 
western   lands,  were   fraudulently  made.     The   defendant  claimed 


CHAP.   XIII.]  FRAUD   FOB   BENEFIT  OF  PRINCIPAL.  479 

a  non-suit;  one  of  the  grounds  of  his  motion  being  that  the  evi- 
dence wholly  failed  to  show  that  either  the  agent  or  the  principal 
knew  that  the  representations  were  false.  According  to  the  testi- 
mony on  the  part  of  the  plaintiff,  certain  statements  were  made 
by  Davis,  of  a  very  direct  and  positive  character,  concerning  the 
quality  and  advantages  of  the  defendant's  land  situated  in  Indiana 
and  Illinois.  These  statements  were  so  minutely  descriptive  of 
the  land  that  on  their  face  they  clearly  imported  a  knowledge  of  the 
facts  on  the  part  of  the  person  making  them,  and  they  were  not 
materially  qualified  by  a  reference  to  any  other  person  as  the  source 
of  information.  The  evidence  on  the  part  of  the  defendant  gave 
a  somewhat  different  complexion  to  the  case,  but  the  question  of  fact 
was  fairly  submitted  to  the  jury.  The  question  of  law  was  whether 
the  representations  could  be  deemed  fraudulent  unless  they  were 
known  to  be  false.  In  regard  to  this  we  entertain  no  serious  doubt. 
Mr.  Justice  Story  thus  states  the  rule:  "Whether  a  party  mis- 
representing a  material  fact  know  it  to  be  false,  or  make  the  asser- 
tion without  knowing  whether  it  were  true  or  false,  is  wholly 
immaterial ;  for  the  affirmation  of  what  one  does  not  know  or  believe 
to  be  true  is  equally,  in  morals  and  law,  as  unjustifiable  as  the 
affirmation  of  what  is  known  to  be  positively  false."  (1  Story  Eq. 
§  193,  and  see  note.)  In  the  case  before  us  the  representations  of 
the  defendant's  agent  were  proved  to  be  grossly  false,  and  they 
could  not  be  honestly  made  when  he  had  not  the  slightest  knowledge 
of  the  subject  to  which  they  related.  The  plaintiff  knew  nothing 
of  the  lands  which  he  was  about  to  buy.  If  these  statements  as 
to  the  situation  and  characteristics  of  those  lands  were  made  with 
an  intent  that  he  should  rely  upon  them,  and  if  he  did  rely  upon 
them,  it  was  as  much  a  fraud  as  if  they  were  known  to  be  untrue. 
The  law  is  not  so  unreasonable  as  to  deny  redress  in  such  a  case. 
Stone  V.  Denny,  4  Mete.  161;  Buford  v.  Caldwell,  3  Missouri,  477; 
Thomas  v.  McCann,  4  B.  Monroe,  601;  Parham  v.  Eandolph,  4 
Howard  (Miss.),  435. 

The  case  does  not  present  any  other  questions  requiring  a  particu- 
lar consideration.    We  think  the  judgment  must  be  affirmed. 

Selden,  J.,  expressed  no  opinion;  all  the  other  judges  concur- 
ring. Judgment  affirmed.^ 

*  "  It  must  be  observed,  however,  that  even  this  responsibility  for  Instrumentali- 
ties does  not  extend  to  collateral  contracts  made  by  the  agent  in  excess  of  his  actual 
or  ostensible  authority,  and  not  known  to  the  principal  at  the  time  of  receiving  the 
proceeds,  though  such  collateral  contract  may  have  been  the  means  by  which  the 
agent  was  enabled  to  effect  the  authorized  contract,  and  the  principal  retains  the 
proceeds  thereof  after  knowledge  of  the  fact.  Smith  v.  Tracy,  36  N.  Y.  79 ;  and  see 
Hammond  v.  Michigan  State  Bank,  Vi'alker's  Ch.  R.  214  ;  Young  v.  White,  7  Beav. 
506.  A  party  dealing  with  an  agent  is  bound  to  Inquire  as  to  the  extent  of  bis 
authority ;  but  he  cannot  always  protect  himself  against  bis  frauds."  —  Baldwin 
et  a).  V.  Burrows  et  al..  47  N.  Y.  199,  215. 


480  BRITISH   MUT.   b'k'G  CO.   V.   CHAENWOOD^   ETC.      [CHAP.   XUl. 

WHEELER   AND   WILSON   MFG.    CO.   v.   AUGHEY. 

144  Pa.  St.  398.     1891. 
[Reported  herein  at  p.  84.] 


3.   Fraud  for  Benefit  of  Agent. 

BEITISH   MUTUAL   BANKING   CO.   v.   CHAEN- 
WOOD    FOREST   RAILWAY    CO. 

18  Q.  B.  D.  (C.A.)  714.     1887. 

Appeal  from  an  order  of  the  Queen's  Bench  Division  (Manisty 
and  Mathew,  JJ.)  directing  judgment  to  be  entered  for  the 
plaintiffs. 

The  action  was  brought  to  recover  damages  for  fraudulent  mis- 
representations alleged  to  have  been  made  by  the  defendants 
through  their  secretary.  At  the  trial  before  Lord  Coleridge, 
C.  J.,  it  appeared  that  certain  customers  of  the  plaintiffs  had  applied 
to  them  for  an  advance  on  the  security  of  transfers  of  debenture 
stock  of  the  defendant  company.  The  plaintiffs'  manager  called 
upon  Tremayne,  the  defendants'  secretary,  and  was  informed  in 
effect  that  the  transfers  were  valid,  and  that  the  stock  which  they 
purported  to  transfer  existed.  The  plaintiffs  thereupon  made  the 
advances.  It  subsequently  appeared  that  Tremayne,  in  conjunction 
with  one  Maddison,  had  fraudulently  issued  certificates  for  deben- 
ture stock  in  excess  of  the  amount  which  the  company  were  author- 
ized to  issue,  and  the  transfers  as  to  which  the  plaintiffs  inquired 
related  to  this  over-issue.  The  plaintiffs  accordingly  lost  their 
security.  The  defendants  did  not  benefit  in  any  way  by  the  false 
statements  of  Tremayne,  which  were  made  entirely  in  the  interest 
of  himself  and  Maddison.  There  was  some  question  whether 
Tremayne  was  still  secretary  at  the  time  the  statements  were  made; 
but  the  jury  found  that  the  inquiries  were  made  of  him  as  secretary, 
and  that  the  defendants  held  him  out  as  such  to  answer  such  in- 
quiries. The  jury  assessed  the  damages,  and  the  chief  justice  left 
either  of  the  parties  to  move  for  judgment.  A  motion  was  accord- 
ingly made  on  behalf  of  the  plaintiffs  before  Manisty  and  Mathew, 
JJ.,  who  directed  judgment  to  be  entered  for  them. 

The  defendants  appealed. 

Lord  Esher,  M.  R.  In  this  case  an  action  has  been  brought 
by  the  plaintiffs  to  recover  damages  for  fraudulent  misrepresenta- 


CHAP.   XIII.]  FKADD   FOR  BENEFIT   OF   AGENT.  481 

tion  by  the  defendants,  through  their  secretary,  as  to  the  validity 
of  certain  debenture  stock  of  the  defendant  company.  The  defend- 
ants are  a  corj^oration,  and  the  alleged  misrepresentations  were,  in 
fact,  made  by  a  person  employed  in  the  capacity  of  their  secretary; 
and  it  cannot  be  doubted  that  when  he  made  the  statements  he  had 
a  fraudulent  mind,  and  made  them  knowing  them  to  be  false. 

I  differ  from  the  judgment  of  the  divisional  court,  but  I  do  not 
think  the  ground  on  which  my  decision  is  based  was  present  to  the 
minds  of  the  learned  judges.  The  point  principally  argued  in  the 
divisional  court  seems  to  have  been  that  the  defendants  could  not 
be  liable  on  account  of  their  being  a  corporation.  It  seems  to  me, 
however,  that  there  is  a  defect  in  the  plaintiff's  case,  irrespective 
of  the  question  whether  the  defendants  were  a  corporation  or  not. 
The  secretary  was  held  out  by  the  defendants  as  a  person  to  answer 
such  questions  as  those  put  to  him  in  the  interest  of  the  plaintiffs, 
and  if  he  had  answered  them  falsely  on  behalf  of  the  defendants, 
he  being  then  authorized  by  them  to  give  answers  for  them,  it  may 
well  be  that  they  would  be  liable.  But  although  what  the  secretary 
stated  related  to  matters  about  which  he  was  authorized  to  give 
answers,  he  did  not  make  the  statements  for  the  defendants,  but  for 
himself.  He  had  a  friend  whom  he  desired  to  assist  and  could 
assist  by  making  the  false  statements,  and  as  he  made  them  in  hia 
own  interest  or  to  assist  his  friend,  he  was  not  acting  for  the  de- 
fendants. The  rule  has  often  been  expressed  in  the  terms,  that  to 
bind  the  principal  the  agent  must  be  acting  "  for  the  benefit "  of 
the  principal.  This,  in  my  opinion,  is  equivalent  to  saying  that 
he  must  be  acting  "  for  "  the  principal,  since  if  there  is  authority 
to  do  the  act  it  does  not  matter  if  the  principal  is  benefited  by  it. 
I  know  of  no  case  where  the  employer  has  been  held  liable  when  hia 
servant  has  made  statements  not  for  his  employer,  but  in  his  own 
interest.  The  attention  of  the  learned  judges  seems  to  have  been 
drawn  off  from  this  view  of  the  case  by  the  argument  founded  on 
the  defendants  being  a  corporation,  and  I  think  their  judgment 
must  be  overruled. 

The  following  judgment  was  read  by 

BowEN,  L.  J.  There  is,  so  far  as  I  am  aware,  no  precedent  in 
English  law,  unless  it  be  Swift  v.  Winterbotham,  Law  Eep.  8  Q.  B. 
244,  a  case  that  was  overruled  upon  appeal  (Swift  v.  Jewsbury, 
Law  Eep.  9  Q.  B.  301),  for  holding  that  a  principal  is  liable  in  an 
action  of  deceit  for  the  unauthorized  and  fraudulent  act  of  a  ser- 
vant or  agent  committed,  not  for  the  general  or  special  benefit  of 
the  principal,  but  for  the  servant's  own  private  ends.  The  true  rule 
was,  as  it  seems  to  me,  enunciated  by  the  Exchequer  Chamber  in 
a  judgment  of  "Willes,  J.,  delivered  in  the  case  of  Barwick  v.  Eng- 
lish Joint  Stock  Bank,  Law  Rep.  2  Exch.  259.  "  The  general  rule," 
says  Willes,  J.,  "  is  that  the  master  is  answerable  for  every  such 

31 


482  BRITISH  MUT.   b'k'G  CO.    V.   CHAENWOOD,   ETC.      [CHAP.   XIII. 

wrong  of  his  servant  or  agent  as  is  committed  in  the  course  of  his 
service  and  for  the  master's  benefit,  though  no  express  command 
or  privity  of  the  master  be  proved."  This  definition  of  liability  has 
been  constantly  referred  to  in  subsequent  cases  as  adequate  and 
satisfactory,  and  was  cited  with  approval  by  Lord  Selborne  in  the 
House  of  Lords  in  Houldsworth  v.  City  of  Glasgow  Bank,  5  App. 
Cas.  317.  Mackey  v.  Commercial  Bank  of  New  Brunswick,  Law 
Eep.  5  P.  C.  394,  is  consistent  with  this  principle.  It  is  a  defini- 
tion strictly  in  accordance  with  the  ruling  of  Martin,  B.,  in  Limpus 
V.  London  General  Omnibus  Co.,  1  H.  &  C.  526,  which  was  upheld 
in  the  Exchequer  Chamber  (see  per  Blackburn,  J.). 

It  was  argued  on  behalf  of  the  plaintiifs  in  the  present  appeal  that 
the  defendant  company,  although  they  might  not  have  authorized 
the  fraudulent  answer  given  by  the  secretary,  had  nevertheless 
authorized  the  secretary  to  do  "that  class  of  acts"  of  which  the 
fraudulent  answer,  it  was  said,  was  one.  This  is  a  misapplication 
fo  a  wholly  different  case  of  an  expression  which  in  Barwick  v. 
English  Joint  Stock  Bank,  Law  Eep.  2  Exch.  259,  was  perfectly 
appropriate  with  regard  to  the  circumstances  there.  In  that  case 
the  act  done,  though  not  expressly  authorized,  was  done  for  the 
master's  benefit.  With  respect  to  acts  of  that  description,  it  was 
doubtless  correct  to  say  that  the  agent  was  placed  there  to  do  acts  of 
"  that  class."  Transferred  to  a  case  like  the  present,  the  expression 
that  the  secretary  was  placed  in  his  ofi&ce  to  do  acts  of  "  that  class  " 
begs  the  very  question  at  issue;  for  the  defendants'  proposition  is, 
on  the  contrary,  that  an  act  done  not  for  the  employer's  benefit, 
but  for  the  servant's  own  private  ends,  is  not  an  act  of  the  class 
which  the  secretary  either  was  or  could  possibly  be  authorized  to 
do.  It  is  said  that  the  secretary  was  clothed  ostensibly  with  a  real 
or  apparent  authority  to  make  representations  as  to  the  genuineness 
of  the  debentures  in  question;  but  no  action  of  contract  lies  for 
a  false  representation  unless  the  maker  of  it  or  his  principal  has 
either  contracted  that  the  representation  is  true,  or  is  estopped  from 
denying  that  he  has  done  so.  In  the  present  case  the  defendant 
company  could  not  in  law  have  so  contracted,  for  any  such  contract 
would  have  been  beyond  their  corporate  powers.  And  if  they  can- 
not contract,  how  can  they  be  estopped  from  denying  that  they  have 
done  so?  The  action  against  them,  therefore,  to  be  maintainable 
at  all,  must  be  an  action  of  tort  founded  on  deceit  and  fraud.  But 
how  can  a  company  be  made  liable  for  a  fraudulent  answer  given  by 
their  officer  for  his  own  private  ends,  by  which  they  could  not  have 
been  bound  if  they  had  actually  authorized  him  to  make  it,  and 
promised  to  be  bound  by  it?  The  question  resolves  itself  accord- 
ingly into  a  dilemma.  The  fraudulent  answer  must  have  either 
been  within  the  scope  of  the  agent's  employment  or  outside  it. 
It  could  not  be  within  it,  for  the  company  had  no  power  to  bind 


CHAP.   XIII.]  FRAUD  FOR  BENEFIT  OF  AGENT.  483 

themselves  to  the  consequences  of  any  such  answer.  If  it  is  not 
within  it,  on  what  ground  can  the  company  be  made  responsible 
for  an  agent's  act  done  beyond  the  scope  of  his  employment,  and 
from  which  they  derived  no  benefit?  This  shows  that  the  propo- 
sition that  the  secretary  in  the  present  case  was  employed  to  do  that 
"  class  of  acts  "  is  fallacious,  and  cannot  be  maintained.  The  judg- 
ment of  the  court  below  is  based  upon  the  view  that  the  act  done 
was  in  fact  within  the  scope  of  the  secretary's  employment;  and 
if  this  proposition  cannot  be  maintained,  the  judgment  must  fall 
with  it.  How  far  a  statutory  corporate  body  could  in  any  case 
be  made  liable  in  an  action  for  deceit  beyond  the  extent  of  the 
benefits  they  have  reaped  by  the  fraud  is  a  matter  upon  which  I 
desire  to  express  no  opinion,  for  none  is  necessary  to  the  decision 
here;  but  even  if  the  principals  in  the  present  case  were  not  a 
statutory  body,  with  limited  powers  of  contracting  and  of  action, 
I  think  there  would  be  danger  in  departing  from  the  definition'  of 
liability  laid  down  by  Willes,  J.,  in  Barwick  v.  English  Joint  Stock 
Bank,  Law  Eep.  2  Exch.  259,  and  in  extending  the  responsibility 
of  a  principal  for  the  frauds  committed  by  a  servant  or  agent  beyond 
the  boundaries  hitherto  recognized  by  English  law.  I  think, 
therefore,  that  this  appeal  must  be  allowed,  with  costs. 

Fry,  L.  J.  I  agree  in  the  view  that  the  appeal  must  be  allowed. 
It  appears  to  me  that  the  case  is  one  of  an  action  for  fraudulent 
misrepresentation  made  by  a  servant,  who  in  making  it  was  acting 
not  in  the  interest  of  his  employers,  but  in  his  own  interest.  It  is 
plain  that  the  action  cannot  succeed  on  any  ground  of  estoppel,  for 
otherwise  the  defendants  would  be  estopped  from  denying  that  the 
stock  was  good.  No  corporate  body  can  be  bound  by  estoppel  to 
do  something  beyond  their  powers.  The  action  cannot  be  supported, 
therefore,  on  that  ground.  Nor  can  it  be  supported  on  the  ground 
of  direct  authority  to  make  the  statements.  Neither  can  it  be 
supported  on  the  ground  that  the  company  either  benefited  by,  or 
accepted  or  adopted  any  contract  induced  or  produced  by  the  fraud- 
ulent misrepresentation.  I  can  see  no  ground  for  maintaining  the 
action,  and  the  appeal  must  be  allowed.  Appeal  allowed. 


FIFTH  AVENUE   BANK  v.  FORTY-SECOND   STREET 
AND    GRAND    STREET    FERRY    CO. 

137  N.  Y.  231.     1893. 

Action  to  recover  damages  for  loss  sustained  by  plaintiff  in  con- 
sequence of  the  issue  by  defendant's  agent  of  false  and  fraudulent 
certificates  of  stock.     Judgment  for  plaintiff. 


484         FIFTH    AVE.    BANK   V.    42D   ST.,    ETC.,    FERBY    CO.       [CHAP.    XllT. 

Plaintiff  took  from  H.  a  certificate  of  stock  purporting  to  be  issued 
by  defendant.  In  fact  the  certificate  was  spurious,  the  signature  of 
the  president  being  forged  by  one  Allen,  who  was  the  defendant's 
agent  for  countersigning  certificates,  and  who  had  countersigned  this, 
and  delivered  it  to  H.  for  the  purpose  of  borrowing  money  upon  it. 
Before  taking  the  certificate  plaintiff  inquired  at  defendant's  office 
as  to  its  genuinen'^ss,  and  was  informed  by  Allen  that  it  was  genuine, 
and  that  H.  was  the  registered  holder  of  it.  Later,  plaintiff  took 
another  like  certificate,  but  without  making  inquiries  as  to  its  genu- 
ineness.    Defendant  refused  to  recognize  these  certificates. 

Plaintiff  recovered  upon  the  first  certificate,  but  not  on  the  second. 
Defendant  alone  appeals. 

Maynard,  J.  ...  It  is  very  clear  that  under  the  regulations 
adopted  by  the  defendant,  and  pursuing  the  mode  of  procedure 
which  it  has  prescribed,  the  final  act  in  the  issue  of  a  certificate 
of  stock  was  performed  by  its  secretary  and  transfer  agent,  and  that 
when  he  countersigned  it  and  affixed  the  corporate  seal,  and  delivered 
it  with  the  intent  that  it  might  be  negotiated,  it  must  be  regarded, 
so  long  as  it  remained  outstanding,  as  a  continuing  affirmation  by 
the  defendant  that  it  had  been  lawfully  issued,  and  that  all  the  con- 
ditions precedent  upon  which  the  right  to  issue  it  depended  had 
been  duly  observed.  Such  is  the  effect  necessarily  implied  in  the 
act  of  countersigning.  This  word  has  a  well-defined  meaning,  both 
in  the  law  and  in  the  lexicon.  To  countersign  an  instrument  is  to 
sign  what  has  already  been  signed  by  a  superior,  to  authenticate  by 
an  additional  signature,  and  usually  has  reference  to  the  signature 
of  a  subordinate  in  addition  to  that  of  his  superior  by  way  of 
authentication  of  the  execution  of  the  writing  to  which  it  is  affixed, 
and  it  denotes  the  complete  execution  of  the  paper.  (Worcester's 
Die.)  When,  therefore,  the  defendant's  secretary  and  transfer  agent 
countersigned  and  sealed  this  certificate  and  put  it  in  circulation, 
he  declared,  in  the  most  formal  manner,,  that  it  had  been  properly 
executed  by  the  defendant,  and  that  every  essentia^  requirement  of 
law  and  of  the  by-laws  had  been  performed  to  make  it  the  binding 
act  of  the  company.  The  defendant's  by-laws  elsewhere  illustrate 
the  application  of  the  term  when  used  with  reference  to  the  signa- 
tures of  its  officers.  In  section  10  it  is  provided  that  all  moneys  re- 
ceived by  the  treasurer  should  be  deposited  in  bank  to  the  joint  credit 
of  the  president  and  treasurer,  to  be  drawn  out  only  by  the  check  of 
the  treasurer,  countersigned  by  the  president.  If  the  president 
should  forge  the  name  of  the  treasurer  to  a  check,  and  countersign 
it  and  put  it  in  circulation,  and  use  the  proceeds  for  his  individual 
benefit,  we  apprehend  it  would  not  be  doubted  that  this  would  be 
regarded  as  a  certificate  of  the  due  execution  of  the  check,  so  far  as 
to  render  the  company  responsible  to  any  person  who  innocently  and 
in  good  faith  became  the  holder  of  it. 


CHAP.   XIII.]  FRAUD   FOR  BENEFIT  OF  AGENT.  485 

This  result  follows  from  the  application  of  the  fundamental  rules 
which  determine  the  obligations  of  a  principal  for  the  acts  of  his 
agent.  They  are  embraced  in  the  comprehensive  statement  of  Story 
in  his  work  on  Agency  (9th  ed.  §  452),  that  the  principal  is  to  be 
"  held  liable  to  third  persons  in  a  civil  suit  for  the  frauds,  deceits, 
concealments,  misrepresentations,  torts,  negligences,  and  other  mal- 
feasances, or  misfeasances  and  omissions  of  duty  of  his  agent  in  the 
course  of  his  employment,  although  the  principal  did  not  authorize, 
or  justify,  or  participate  in,  or,  indeed,  know  of  such  misconduct,  or 
even  if  he  forbade  the  acts  or  disapproved  of  them.  In  all  such  cases 
the  rule  applies,  respondeat  superior,  and  is  founded  upon  public 
policy  and  convenience,  for  in  no  other  way  could  there  be  any 
safety  to  third  persons  in  their  dealings,  either  directly  with  the  prin- 
cipal, or  indirectly  with  him  through  the  instrumentality  of  agents. 
In  every  such  case  the  principal  holds  out  his  agent  as  competent 
and  fit  to  be  trusted,  and  thereby,  in  effect,  he  warrants  his  fidelity 
and  good  conduct  in  all  matters  within  the  scope  of  the  agency."  It 
is  true  that  the  secretary  and  transfer  agent  had  no  authority  to  issue 
a  certificate  of  stock,  except  upon  the  surrender  and  cancellation 
of  a  previously  existing  valid  certificate,  and  the  signature  of  the 
president  and  treasurer  first  obtained  to  the  certificate  to  be  issued; 
but  these  were  facts  necessarily  and  peculiarly  within  the  knowledge 
of  the  secretarj',  and  the  issue  of  the  certificate  in  due  form  was  a 
representation  by  the  secretary  and  transfer  agent  that  these  condi- 
tions had  been  complied  with,  and  that  the  facts  existed  upon  which 
his  right  to  act  depended.  It  was  a  certificate  apparently  made  in 
the  course  of  his  employment  as  the  agent  of  the  company  and  within 
the  scope  of  the  general  authority  conferred  upon  him;  and  the 
defendant  is  under  an  implied  obligation  to  make  indemnity  to  the 
plaintiff  for  the  loss  sustained  by  the  negligent  or  wrongful  exercise 
by  its  officers  of  the  general  powers  conferred  upon  them.  Griswold 
V.  Haven,  25  N.  Y.  595 ;  N.  Y.  &  N.  H.  E.  E.  Co.  v.  Schuyler,  34 
Id.  30 ;  Titus  v.  G.  W.  Turnpike  Co.,  61  Id.  237 ;  Bank  of  Batavia 
V.  N.  Y.,.  L.  E.  &  W.  E.  E.  Co.,  106  Id.  195.  The  learned  counsel 
for  the  defendant  seeks  to  distinguish  this  case  from  the  authorities 
cited  because  the  signature  of  the  president  to  the  certificate  was  not 
genuine;  but  we  cannot  see  how  the  forgery  of  the  name  of  the 
president  can  relieve  the  defendant  from  liability  for  the  fraudulent 
acts  of  its  secretary,  treasurer,  and  transfer  agent.  They  were  officers 
to  whom  it  had  intrusted  the  authority  to  make  the  final  declaration 
as  to  the  validity  of  the  shares  of  stock  it  might  issue,  and  where 
their  acts,  in  the  apparent  exercise  of  this  power,  are  accompanied 
with  all  the  indicia  of  genuineness,  it  is  essential  to  the  public  welfare 
that  the  principal  should  be  responsible  to  all  persons  who  receive  the 
certificates  in  good  faith  and  for  a  valuable  consideration  and  in 
the  ordinar}'  course  of  business,  whether  the  indicia  are  true  or  not. 


486        FIFTH    AVE.    BANK   V.    42d   ST.,   ETC.,    FEERY    CO.       [CHAP.    XIII. 

Beach  on  Pr.  Cor.  Vol.  2,  p.  790 ;  North  River  Bank  v.  Aymar,  3  Hill, 
262 ;  Jarvis  v.  Manhattan  Beach  Co.,  53  Hun,  362 ;  Tome  v.  Parkers- 
burg  Branch,  39  Md.  36 ;  Baltimore,  etc.  R.  Co.  v.  Wilkens,  44  Id.  11 ; 
Western  M.  R.  Co.  v.  Franklin  Bank,  60  Id.  36;  Com.  v.  Bank, 
137  Mass.  431;  Holden  v.  Phelps,  141  Id.  456;  Manhattan  Beach 
Co.  V.  Harned,  27  Fed.  Rep.  484;  Shaw  v.  Port  Phillip  &  Co., 
13  Q.  B.  D.  103. 

The  rule  is,  we  think,  correctly  stated  in  Beach  on  Private  Cor- 
porations (Vol.  2,  §  488,  p.  791):  "When  certificates  of  stock 
contain  apparently  all  the  essentials  of  genuineness,  a  bona  fide  holder 
thereof  has  a  claim  to  recognition  as  a  stockholder,  if  such  stock 
can  legally  be  issued,  or  to  indemnity  if  this  cannot  be  done.  The  fact 
of  forgery  does  not  extinguish  his  right  when  it  has  been  perpetrated 
by  or  at  the  instance  of  an  officer  placed  in  authority  by  the  cor- 
poration, and  intrusted  with  the  custody  of  its  stock-books,  and  held 
out  by  the  company  as  the  source  of  information  upon  the  subject." 

Having  reached  the  conclusion  that  the  defendant  is  liable  for  the 
representations  of  its  officers,  appearing  upon  the  face  of  its  certifi- 
cate over  their  official  signature  and  under  the  seal  of  the  corporation, 
we  do  not  deem  it  necessary  to  consider  the  effect  of  the  oral  repre- 
sentations made  at  the  office  of  the  company  to  the  plaintiff's  clerk, 
except  so  far  as  they  bear  upon  the  question  of  the  good  faith  of  the 
plaintiff  in  the  acquisition  of  the  certificate. 

The  judgment  and  order  must  be  affirmed  with  costs. 

All  concur.  Judgment  affirmed.^ 

»  In  Clarkson  Home  v.  Mo.,  K.  &  J.  R.  Co.,  182  N.  Y.  47,  at  pp.  57,  58,  the  court 
said :  "  There  are  but  two  other  cases  to  which  we  deem  It  necessary  to  refer,  in  one 
of  which  the  principal  was  held  liable  for  the  acts  of  defendant's  agent,  and  in  the 
other  the  principal  was  held  not  liable.  The  first  case  is  that  of  Fifth  Avenue  Banl; 
of  New  York  v.  Forty-second  Street  and  Grand  Street  Ferry  Railroad  Company  (137 
N.  Y.  231),  and  the  other  is  that  of  Manhattan  Life  Insurance  Company  v.  Forty- 
second  Street  and  Grand  Street  Ferry  Railroad  Company  (139  N.  Y.  146).  The 
opinion  in  each  case  was  written  by  the  same  judge,  who,  after  considering  many 
authorities  upon  the  subject,  has  carefully  drawn  the  distinction  l)etween  the  two 
classes  of  cases,  upon  which  the  liability  of  the  principal  depends.  In  the  first  case, 
one  Allen  was  the  defendant's  secretary,  treasurer,  and  transfer  agent.  He  filled  out 
a  blank  certificate  of  stock  taken  from  defendant's  certificate  book,  forged  the 
name  of  the  president  thereto,  signed  his  own  name  as  treasurer,  then  countersigned 
it  as  transfer  agent  and  impressed  the  seal  of  the  corporation  thereon.  He  then  pro- 
cured from  the  plaintiff  a  loan  upon  his  promissory  note  secured  by  a  pledge  of  the 
certificate.  The  certificate  upon  its  face  was  regular  in  every  respect,  and  the  sec- 
retary was  the  transfer  agent  of  the  company,  duly  authorized  to  issue  stock.  It 
was.  therefore,  held  that  he  acted  within  the  scope  of  his  employment,  and  that  he 
was  held  out  by  the  plaintiff  as  a  competent  and  fit  person  to  be  trusted  for  that 
purpose.  In  the  next  case,  the  president  of  the  railroad  company  had  signed  certain 
certificates  of  stock  in  blank  which  were  left  with  other  officers  of  the  bank,  to  be 
used  in  case  a  stockholder  desired  to  transfer  his  stock  during  the  absence  of  the 
president.  The  same  secretary  and  transfer  agent  referred  to  in  the  former  case 
obtained  possession  of  one  of  these  certificates.  He  filled  up  the  blank.  Inserting  his 
own  name  as  stockholder,  forging  the  name  of  the  treasurer  and  signed  his  own 
name  as  transfer  agent.  He  then  pledged  the  same  as  collateral  security  for  a  loan. 
In  the  meantime  he  had  become  president  of  the  company,  and  his  authority  as 
transfer  agent  had  ceased  to  exist.  So  that  at  the  time  that  he  issued  the  certificate 
he  was  not  acting  within  the  scope  of  any  general  authority  conferred  upon  him  by 
defendant  to  issue  stock  certificates ;  and  it  was  held  that  the  company  was  not 
bound  by  any  representations  made  by  him  as  to  the  genuineness  of  the  certificate. 


OHAP.   XIII.]  FRAUD  FOB  BENEFIT  OF  AGENT.  487 

FEIEDLAJSTDER   v.   TEXAS   &   PACIFIC   RAILWAY   CO. 

130  U.  S.  416.     1889. 

Action  for  damages  for  non-delivery  of  cotton  named  in  a  bill 
of  lading.    Judgment  for  defendant. 

Defendant's  shipping  agent  issued  to  one  Lahnstein  a  bill  of  lading 
for  cotton  in  the  usual  form.  In  fact  no  cotton  was  shipped,  and  the 
agent  and  Lahnstein  were  in  collusion  to  obtain  money  upon  the  bill 
of  lading.  Lahnstein  indorsed  the  bill  of  lading  and  attached  it  to 
a  draft  drawn  on  plaintiffs,  which  draft  plaintiffs  accepted  and  paid 
in  good  faith. 

Mr.  Chief  Justice  Fuller  delivered  the  opinion  of  the  court. 

The  agreed  statement  of  facts  sets  forth  "  that,  in  point  of  fact, 
said  bill  of  lading  of  November  6,  1883,  was  executed  by  said  1^.  D. 
Easton,  fraudulently  and  by  collusion  with  said  Lahnstein,  and  with- 
out receiving  any  cotton  for  transportation,  such  as  is  represented 
in  said  bill  of  lading,  and  without  the  expectation  on  the  part  of  the 
said  Easton  of  receiving  any  such  cotton ; "  and  it  is  further  said  that 
Easton  and  Lahnstein  had  fraudulently  combined  in  another  case, 
whereby  Easton  signed  and  delivered  to  Lahnstein  a  similar  bill  of 
lading  for  cotton  "  which  had  not  been  received,  and  which  the  said 
Easton  had  no  expectation  of  receiving ; "  and  also  "  that,  except 
that  the  cotton  was  not  received  nor  expected  to  be  received  by  said 
agent  when  said  bill  of  lading  was  by  him  executed  as  aforesaid, 
the  transaction  was,  from  first  to  last,  customary."  In  view  of  this 
language,  the  words  "  for  transportation,  such  as  is  represented  in 
said  bill  of  lading,"  cannot  be  held  to  operate  as  a  limitation.  The 
inference  to  be  drawn  from  the  statement  is  that  no  cotton  whatever 
was  delivered  for  transportation  to  the  agent  at  Sherman  station. 

The  question  arises,  then,  whether  the  agent  of  a  railroad  company 
at  one  of  its  stations  can  bind  the  company  by  the  execution  of  a 
bill  of  lading  for  goods  not  actually  placed  in  his  possession,  and  its 
delivery  to  a  person  fraudulently  pretending  in  collusion  with  such| 
agent  that  he  had  shipped  such  goods,  in  favor  of  a  party  without, 
notice,  with  whom,  in  furtherance  of  the  fraud,  the  pretended  shipper  I 
negotiates  a  draft,  with  the  false  bill  of  lading  attached.     Bills  of 
exchange  and  promissorj'^  notes  are  representatives  of  money,  circu- 
lating in  the  commercial  world  as  such,  and  it  is  essential,  to  enable 
them  to  perform  their  peculiar  functions,  that  he  who  purchases 
them  should  not  be  bound  to  look  beyond  the  instrument,  and  that 
his  right  to  enforce  them  should  not  be  defeated  by  anything  short 

and  that  the  company  was  not  liable  therefor.  It  thus  appears  that  the  test  as  to 
the  liability  of  the  principal  for  the  acts  of  his  agent  Is  as  to  whether  the  acts  were 
committed  in  the  course  of  his  employment  and  within  the  scope  of  his  agency." 


488  FBIEDLANDER   17.    TEXAS   &   PACIFIC   BY.    CO.       [CHAP.   XIII. 

of  bad  faith  on  his  part.  But  bills  of  lading  answer  a  different  pur- 
pose and  perform  different  functions.  They  are  regarded  as  so  much 
cotton,  grain,  iron,  or  other  articles  of  merchandise,  in  that  they 
are  symbols  of  ownership  of  the  goods  they  cover.  And  as  no  sale 
of  goods  lost  or  stolen,  though  to  a  bona  fide  purchaser  for  value, 
can  divest  the  ownership  of  the  person  who  lost  them  or  from  whom 
they  were  stolen,  so  the  sale  of  the  symbol,  or  mere  representative 
of  the  goods,  can  have  no  such  effect,  although  it  sometimes  happens 
that  the  true  owner,  by  negligence,  has  so  put  it  into  the  power  of 
another  to  occupy  his  position  ostensibly  as  to  estop  him  from  assert- 
ing his  right  as  against  a  purchaser  who  has  been  misled  to  his  hurt 
by  reason  of  such  negligence.  Shaw  v.  Railroad  Co.,  101  U.  S.  557, 
563;  Pollard  v.  Vinton,  105  U.  S.  7,  8;  Gumey  v.  Behrend,  3  El. 
&  Bl.  622,  633,  634.  It  is  true  that  while  not  negotiable  as  commercial 
paper  is,  bills  of  lading  are  commonly  used  as  security  for  loans 
and  advances;  but  it  is  only  as  evidence  of  ownership,  special  or 
general,  of  the  property  mentioned  in  them,  and  of  the  right  to 
receive  such  property  at  the  place  of  delivery. 

Such  being  the  character  of  a  bill  of  lading,  can  a  recovery  be 
had  against  a  common  carrier  for  goods  never  actually  in  its  posses- 
sion for  transportation,  because  one  of  its  agents,  having  authority 
to  sign  bills  of  lading,  by  collusion  with  another  person  issues  the 
document  in  the  absence  of  any  goods  at  all? 

It  has  been  frequently  held  by  this  court  that  the  master  of  a 
vessel  has  no  authority  to  sign  a  bill  of  lading  for  goods  not  actually 
put  on  board  the  vessel,  and,  if  he  does  so,  his  act  does  not  bind  the 
owner  of  the  ship  even  in  favor  of  an  innocent  purchaser.  The  Free- 
man V.  Buckingham,  18  How.  182,  191 ;  The  Lady  Franklin,  8  Wall. 
325;  Pollard  v.  Vinton,  105  U.  S.  7.  And  this  agrees  with  the  rule 
laid  down  by  the  English  courts.  Lickbarrow  v.  Mason,  2  T.  R.  77 ; 
Grant  v.  Norway,  10  C.  B.  665;  Cox  v.  Bruce,  18  Q.  B.  D.  147. 
"  The  receipt  of  the  goods,"  said  Mr.  Justice  Miller,  in  Pollard 
V.  Vinton,  supra,  "  lies  at  the  foundation  of  the  contract  to  carry 
and  deliver.  If  no  goods  are  actually  received,  there  can  be  no  valid 
contract  to  carry  or  to  deliver."  "  And  the  doctrine  is  applicable 
to  transportation  contracts  made  in  that  form  by  railway  companies 
and  other  carriers  by  land,  as  well  as  carriers  by  sea,"  as  was  said 
by  Mr.  Justice  Matthews  in  Iron  Mountain  Railway  v.  Knight, 
122  U.  S.  79,  87,  he  adding  also:  "  If  Potter  (the  agent)  had  never 
delivered  to  the  plaintiff  in  error  any  cotton  at  all  to  make  good  the 
five  hundred  and  twenty-five  bales  called  for  by  the  bills  of  lading, 
it  is  clear  that  the  plaintiff  in  error  would  not  be  liable  for  the  de- 
ficiency. This  is  well  established  by  the  cases  of  The  Schooner 
Freeman  v.  Buckingham,  18  How.  182,  and  Pollard  v.  Vinton, 
105  U.  S.  7." 

It  is  a  familiar  principle  of  law  that  where  one  of  two  innocent 


CHAP.   XIII.]  FRAUD   FOR  BENEFIT  OF   AGENT.  489 

parties  must  suffer  by  the  fraud  of  another,  the  loss  should  fall  upon 
him  who  enabled  such  third  person  to  commit  the  fraud ;  but  nothing 
that  the  railroad  company  did  or  omitted  to  do  can  be  properly  said 
to  have  enabled  Lahnstein  to  impose  upon  Friedlander  &  Co.  The 
company  not  only  did  not  authorize  Easton  to  sign  fictitious  bills 
of  lading,  but  it  did  not  assume  authority  itself  to  issue  such  docu- 
ments, except  upon  the  delivery  of  the  merchandise.  Easton  was  not 
the  company's  agent  in  the  transaction,  for  there  was  nothing  upon 
which  the  agency  could  act.  Railroad  companies  are  not  dealers 
in  bills  of  exchange,  nor  in  bills  of  lading;  they  are  carriers  only, 
and  held  to  rigid  responsibility  as  such.  Easton,  disregarding  the 
object  for  which  he  was  employed,  and  not  intending  by  his  act  to 
execute  it,  but  wholly  for  a  purpose  of  his  own  and  of  Lahnstein, 
became  particeps  criminis  with  the  latter  in  the  commission  of  the 
fraud  upon  Friedlander  &  Co.,  and  it  would  be  going  too  far  to  hold 
the  company,  under  such  circumstances,  estopped  from  denying  that 
it  had  clothed  this  agent  with  apparent  authority  to  do  an  act  so 
utterly  outside  the  scope  of  his  employment  and  of  its  own  business. 
The  defendant  cannot  be  held  on  contract  as  a  common  carrier,  in 
the  absence  of  goods,  shipment,  and  shipper;  nor  is  the  action  main- 
tainable on  the  ground  of  tort.  "  The  general  rule,"  said  Willes, 
J.,  in  Barwick  v.  English  Joint  Stock  Bank,  L.  E.  2  Exch.  259,  265, 
"  is  that  the  master  is  answerable  for  every  such  wrong  of  the  servant 
or  agent  as  is  committed  in  the  course  of  the  service  and  for  the 
master's  benefit,  though  no  express  command  or  privity  of  the  master 
be  proved."  See  also  Limpus  v.  London  General  Omnibus  Co., 
1  H  &  C.  526.  The  fraud  was  in  respect  to  a  matter  within  the 
scope  of  Easton's  employment  or  outside  of  it.  It  was  not  within 
it,  for  bills  of  lading  could  only  be  issued  for  merchandise  delivered ; 
and  being  without  it,  the  company,  which  derived  and  could  derive 
no  benefit  from  the  unauthorized  and  fraudulent  act,  cannot  be  made 
responsible.  British  Mutual  Banking  Co.  v.  Chamwood  Forest 
Eailway  Co.,  18  Q.  B.  D.  714. 

The  law  can  punish  roguery,  but  cannot  always  protect  a  pur- 
chaser from  loss;  and  so  fraud  perpetrated  through  the  device  of 
a  false  bill  of  lading  may  work  injury  to  an  innocent  party,  which 
cannot  be  redressed  by  a  change  of  victim. 

Under  the  Texas  statutes  the  trip  or  voyage  commences  from  the 
time  of  the  signing  of  the  bill  of  lading  issued  upon  the  delivery 
of  the  goods,  and  thereunder  tlie  carrier  cannot  avoid  his  liability 
as  such,  even  though  the  goods  are  not  actually  on  their  passage 
at  the  time  of  a  loss,  but  these  provisions  do  not  affect  the  result  here. 

We  cannot  distinguish  the  case  in  hand  from  those  heretofore 
decided  by  this  court,  and  in  consonance  with  the  conclusions  therein 
announced  this  judgment  must  be  Affirmed. 


490  BANE  OP  BATAVIA  V.   N.   Y.,  L.   E.,  ETC.,   CO.       [CHAP.  XIII. 


BANK  OF  BATAVIA  v.   NEW  YORK,  L.  E.,  & 
W.  R.  COMPANY. 

106  N.  Y,  195.     1887. 

Action  for  damages  for  wrongful  issue  by  defendant,  through  its 
shipping  agent,  of  two  bills  of  lading.    Judgment  for  plaintiff. 

Finch,  J.  It  is  a  settled  doctrine  of  the  law  of  agency  in  this 
state,  that  where  the  principal  has  clothed  his  agent  with  power  to 
do  an  act  upon  the  existence  of  some  extrinsic  fact  necessarily  and 
peculiarly  within  the  knowledge  of  the  agent,  and  of  the  existence 
of  which  the  act  of  executing  the  power  is  itself  a  representation, 
a  third  person  dealing  with  such  agent  in  entire  good  faith,  pur- 
suant to  the  apparent  power,  may  rely  upon  the  representation,  and 
the  principal  is  estopped  from  denying  its  truth  to  his  prejudice. 
North  River  Bank  v.  Aymar,  3  Hill,  262 ;  Griswold  v.  Haven, 
25  N.  Y.  595,  601;  N.  Y.  &  N.  H.  R.  R.  Co.  v.  Schuyler,  34  Id.  30; 
Armour  v.  M.  C.  R.  R.  Co.,  65  Id.  111.  A  discussion  of  that  doctrine 
is  no  longer  needed  or  permissible  in  this  court,  since  it  has  survived 
an  inquiry  of  the  most  exhaustive  character,  and  an  assault  remark- 
able for  its  persistence  and  vigor.  If  there  be  any  exception  to  the 
rule  within  our  jurisdiction,  it  arises  in  the  case  of  municipal  cor- 
porations, whose  structure  and  functions  are  sometimes  claimed  to 
justify  a  more  restricted  liabilit}'.  The  application  of  this  rule  to 
the  case  at  bar  has  determined  it  in  favor  of  the  plaintiff,  and  we 
approve  of  that  conclusion. 

One  Weiss  was  the  local  freight  agent  of  the  defendant  corporation 
at  Batavia,  whose  duty  and  authority  it  was  to  receive  and  forward 
freight  over  the  defendant's  road,  giving  a  bill  of  lading  therefor 
specifying  the  terms  of  the  shipment,  but  having  no  right  to  issue 
such  bills  except  upon  the  actual  receipt  of  the  property  for  trans- 
portation. He  issued  bills  of  lading  for  sixty-five  barrels  of  beans 
to  one  Williams,  describing  them  as  received  to  be  forwarded  to  one 
Comstock,  as  consignee,  but  adding  with  reference  to  the  packages 
that  their  contents  were  unknown.  Williams  drew  a  draft  on  the 
consignee,  and  procured  the  money  upon  it  of  the  plaintiff  by  trans- 
ferring the  bills  of  lading  to  secure  its  ultimate  payment.  It  turned 
out  that  no  barrels  of  beans  were  shipped  by  Williams,  or  delivered 
to  the  defendant,  and  the  bills  of  lading  were  the  product  of  a  con- 
spiracy between  him  and  Weiss  to  defraud  the  plaintiff  or  such  others 
as  could  be  induced  to  advance  their  money  upon  the  faith  of  the 
false  bills. 

It  is  proper  to  consider  only  that  part  of  the  learned  and  very  able 
argument  of  the  appellant's  counsel  which  questions  the  application 
of  the  doctrine  above  stated  to  the  facts  presented.    So  much  of  it 


CHAP.  Xm.]      FRAUD  FOR  BENEFIT  OF  AGENT.  491 

as  rests  upon  the  ground  that  no  privity  existed  between  the  de- 
fendant and  the  bank  may  be  dismissed  with  the  observation  that 
no  privity  is  needed  to  make  the  estoppel  available  other  than  that 
which  flows  from  the  wrongful  act  and  the  consequent  injury. 
N.  Y.  &  N.  H.  R.  R.  Co.  v.  Schuyler,  supra. 

While  bills  of  lading  are  not  negotiable  in  the  sense  applicable 
to  commercial  paper,  they  are  very  commonly  transferred  as  security 
for  loans  and  discounts,  and  carry  with  them  the  ownership,  either 
general  or  special,  of  the  property  which  they  describe.  It  is  the 
natural  and  necessary  expectation  of  the  carrier  issuing  them  that 
they  will  pass  freely  from  one  to  another,  and  advances  be  made  upon 
their  faith,  and  the  carrier  has  no  right  to  believe,  and  never  does 
believe,  that  their  office  and  effect  is  limited  to  the  person  to  whom 
they  are  first  and  directly  issued.  On  the  contrary,  he  is  bound 
by  law  to  recognize  the  validity  of  transfers,  and  to  deliver  the 
property  only  upon  the  production  and  cancellation  of  the  bill  of 
lading. 

If  he  desires  to  limit  his  responsibility  to  a  delivery  to  the  named 
consignee  alone,  he  must  stamp  his  bills  as  "  non-negotiable  " ;  and 
where  he  does  not  do  that,  he  must  be  understood  to  intend  a  possible 
transfer  of  the  bills  and  to  affect  the  action  of  such  transferees. 
In  such  a  case,  the  facts  go  far  beyond  the  instance  cited,  in  which 
an  estoppel  has  been  denied  because  the  representations  were  not 
made  to  the  party  injured.  Mayenborg  v.  Haynes,  50  N.  Y.  675; 
Maguire  v.  Selden,  103  IST.  Y.  642.  Those  were  cases  in  which  the 
representations  made  were  not  intended,  and  could  not  be  expected 
to  influence  the  persons  who  relied  upon  them,  ap  ^  their  knowledge 
of  them  was  described  as  purely  accidental  and  not  anticipated. 
Here  they  were  of  a  totally  different  character.  The  bills  were  made 
for  the  precise  purpose,  so  far  as  the  agent  and  Williams  were  con- 
cerned, of  deceiving  the  bank  by  their  representations,  and  every 
bill  issued  not  stamped  was  issued  with  the  expectation  of  the  prin- 
cipal that  it  would  be  transferred  and  used  in  the  ordinary  channels 
of  business,  and  be  relied  upon  as  evidence  of  ownership  or  security 
for  advances.  Those  thus  trusting  to  it  and  affected  by  it  are  not 
accidentally  injured,  but  have  done  what  they  who  issued  the  bill 
had  every  reason  to  expect.  Considerations  of  this  character  provide 
the  basis  of  an  equitable  estoppel,  without  reference  to  negotiability 
or  directness  of  representation. 

It  is  obvious,  also,  upon  the  case  as  presented,  that  the  fact  or 
condition  essential  to  the  authority  of  the  agent  to  issue  the  bills 
of  lading  was  one  unknown  to  the  bank  and  peculiarly  within  the 
knowledge  of  the  agent  and  his  principal.  If  the  rule  compelled 
the  transferee  to  incur  the  peril  of  the  existence  or  absence  of  the 
essential  fact,  it  would  practically  end  the  large  volume  of  business 
founded  upon  transfers  of  bills  of  lading.    Of  wiiom  shall  the  lender 


492  M'CORD   V.    WESTEKN    UNION   TEL.   CC.         [CUAP.   XIII. 

inquire,  and  how  ascertain  the  fact?  Naturally  he  would  go  to  the 
freight  agent,  who  had  already  falsely  declared  in  writing  that  the 
property  had  been  received.  Is  he  any  more  authorized  to  make 
the  verbal  representation  than  the  written  one?  Must  the  lender 
get  permission  to  go  through  the  freight-house  or  examine  the  books  ? 
If  the  property  is  grain,  it  may  not  be  easy  to  identify,  and  the  books, 
if  disclosed,  are  the  work  of  the  same  freight  agent.  It  seems  very 
clear  that  the  vital  fact  of  the  shipment  is  one  peculiarly  within  the 
knowledge  of  the  carrier  and  his  agent,  and  quite  certain  to  be  un- 
known to  the  transferee  of  the  bill  of  lading,  except  as  he  relies  upon 
the  representation  of  the  freight  agent. 

The  recital  in  the  bills  that  the  contents  of  the  packages  were  un- 
known would  have  left  the  defendant  free  from  responsibility  for 
a  variance  in  the  actual  contents  from  those  described  in  the  bill, 
but  is  no  defence  where  nothing  is  shipped  and  the  bill  is  wholly 
false.  The  carrier  cannot  defend  one  wrong  by  presuming  that  if 
it  had  not  occurred  another  might  have  taken  its  place.  The  pre- 
sumption is  the  other  way ;  that  if  an  actual  shipment  had  been  made, 
the  property  really  delivered  would  have  corresponded  with  the 
description  in  the  bills. 

The  facts  of  the  case  bring  it,  therefore,  within  the  rule  of  estoppel 
as  it  is  established  in  this  court,  and  justify  the  decision  made. 

The  judgment  should  be  affirmed,  with  costs.    All  concur. 

Judgment  affirmed. 


M'CORD   V.   WESTERN   UNION   TELEGRAPH    COMPANY. 

39  Minn.  181.     1888. 

Appeal  from  an  order  overruling  a  demurrer  to  the  complaint. 
The  opinion  states  the  facts. 

Vaxdekbuegh,  J.  Dudley  &  Co.,  who  resided  at  Grove  City, 
Minn.,  were  the  agents  of  plaintiff  for  the  purchase  of  wheat  for  him. 
He  resided  at  Minneapolis,  and  was  in  the  habit  of  forwarding  money 
to  them,  to  be  used  in  making  such  purchases,  in  response  to  tele- 
grams sent  over  the  defendant's  line,  and  delivered  to  him  by  it. 
On  the  first  day  of  February,  1887,  the  defendant  transmitted  and 
delivered  to  plaintiff  the  following  message,  viz. : 

Gbove  City,  Minn.,  February  1,  1887. 
To  T.  M.  M'CoBD  &  Co.,  —  Send  one  thousand  or  fifteen  hundred  to-morrow. 

Dudley  &  Co. 

The  plaintiff  in  good  faith  acted  upon  this  request,  believing  it 
to  be  genuine,  and,  in  accordance  with  his  custom,  forwarded  through 
the  American  Express  Company  the  sum  of  $1,500  in  currency, 
properly  addressed  to  Dudley  &  Co.,  at  Grove  City.    It  turned  out. 


CHAP.    XIII.]  FRAUD    FOR   BENEFIT   OF   AGEXT.  493 

however,  that  this  despatch  was  not  sent  by  Dudley  &  Co.,  or  with 
their  knowledge  or  authority;  but  it  was,  in  fact,  false  and  fraudu- 
lent, and  was  written  and  sent  by  the  agent  of  the  defendant  at 
Grove  City,  whose  business  it  was  to  receive  and  transmit  messages 
at  that  place.  He  was  also  at  the  same  time  the  agent  of  the  Ameri- 
can Express  Company  for  the  transaction  of  its  business,  and  for 
a  long  time  previous  to  the  date  mentioned  had  so  acted  as  agent  for 
both  companies  at  Grove  City,  and  was  well  informed  of  plaintiff's 
method  of  doing  business  with  Dudley  &  Co.  On  the  arrival  of  the 
package  by  express  at  Grove  City,  containing  the  sum  named,  it  was 
intercepted  and  abstracted  by  the  agent,  who  converted  the  same  to 
his  own  use.  The  despatch  was  delivered  to  the  plaintiff,  and  the 
money  forwarded  in  the  usual  course  of  business.  These  facts,  as 
disclosed  by  the  record,  are  sufficient,  we  think,  to  establish  the 
defendant's  liability  in  this  action. 

1.  Considering  the  business  relations  existing  between  plaintiff 
and  Dudley  &  Co.,  the  despatch  was  reasonably  interpreted  to  mean 
a  requisition  for  one  thousand  or  fifteen  hundred  dollars. 

2.  As  respects  the  receiver  of  the  message,  it  is  entirely  immaterial 
upon  what  terms  or  consideration  the  telegraph  company  undertook 
to  send  the  message.  It  is  enough  that  the  message  was  sent  over 
the  line,  and  received  in  due  course  by  the-  plaintiff,  and  acted  on 
by  him  in  good  faith.  The  action  is  one  sounding  in  tort,  and  based 
upon  the  claim  that  the  defendant  is  liable  for  the  fraud  and  mis- 
feasance of  its  agent  in  transmitting  a  false  message  prepared  by 
himself.  New  York,  etc.,  Tel.  Co.  v.  Dryburg,  35  Pa.  St.  289, 
78  Am.  Dec.  338;  Gray,  Tel.  §  75. 

3.^  The  principal  contention  of  defendant  is,  however,  that  the 
corporation  is  not  liable  for  the  fraudulent  and  tortious  act  of  the 
agent  in  sending  the  message,  and  that  the  maxim  respondeat  supe- 
rior does  not  apply  in  such  a  case,  because  the  agent  in  sending  the 
despatch  was  not  acting  for  his  master,  but  for  himself  and  about 
his  own  business,  and  was,  in  fact,  the  sender,  and  to  be  treated  as 
having  transcended  his  authority,  and  as  acting  outside  of,  and  not 
in,  the  course  of  his  employment,  nor  in  furtherance  of  his  master's 
business.  But  the  rule  which  fastens  a  liability  upon  the  master 
to  third  persons  for  the  wrongful  and  unauthorized  acts  of  his  ser- 
vant is  not  confined  solely  to  that  class  of  cases  where  the  acts  com- 
plained of  are  done  in  the  course  of  the  employment  in  furtherance 
of  the  master's  business  or  interest,  though  there  are  many  cases 
which  fall  within  that  rule.  Mott  v.  Consumer's  Ice  Co.,  73  N.  Y, 
643;  Fishkill  Savings  Inst.  v.  National  Bank,  80  N.  Y.  162,  168; 
Potulni  V.  Saunders,  37  Minn.  517,  35  N.  W.  Rep.  379.  Where  the 
business  with  which  the  agent  is  intrusted  involves  a  duty  owed  by 
the  master  to  the  public  or  third  persons,  if  the  agent,  while  so 
employed,  by  his  own  wrongful  act,  occasions  a  violation  of  that 


494  M'COED   V.   WESTERN    UNION   TEL.   CO.         [OHAP.   XIIL 

duty,  or  an  injury  to  the  person  interested  in  its  faithful  performance 
by  or  on  behalf  of  the  master,  the  master  is  liable  for  the  breach  of 
it,  whether  it  be  founded  in  contract  or  be  a  common-law  duty  grow- 
ing out  of  the  relations  of  the  parties.  1  Shear.  &  R.  Neg.  (4th  ed.) 
§149,  150,  154;  Tayl.  Corp.  (2d  ed,)  §  145.  And  it  is  imma- 
terial in  such  case  that  the  wrongful  act  of  the  servant  is  in  itself 
wilful,  malicious,  or  fraudulent.  Thus  a  carrier  of  passengers  is 
bound  to  exercise  due  regard  for  their  safety  and  welfare,  and  to 
protect  tliem  from  insult.  If  the  servants  employed  by  such  carrier 
in  the  course  of  such  employment  disregard  these  obligations,  and 
maliciously  and  wilfully,  and  even  in  disregard  of  the  express  instruc- 
tions of  their  employers,  insult  and  maltreat  passengers  under  their 
care,  the  master  is  liable,  Stewart  v.  Brooklyn  &  Crosstown  R.  R. 
Co.,  90  N.  Y.  588,  593.  In  Booth  v.  Farmers',  etc..  Bank,  50  N".  Y. 
396,  an  officer  of  a  bank  wrongfully  discharged  a  judgment  which 
had  been  recovered  by  the  bank,  after  it  had  been  assigned  to  the 
plaintiff.  It  was  there  claimed  that  the  authority  of  the  officer  and 
the  bank  itself  to  satisfy  the  judgment  had  ceased,  and  that  hence 
the  bank  was  not  bound  by  what  its  president  did  after  such  assign- 
ment. But  the  court  held  otherwise,  evidently  upon  the  same  general 
principle,  as  respects  the  duty  of  the  bank  to  the  assignee,  and  laid 
down  the  general  proposition,  equally  applicable  to  the  agent  of  the 
defendant  in  the  case  at  bar,  that  the  particular  act  of  the  agent  or 
officer  was  wrongful  and  in  violation  of  his  dut}',  yet  it  was  within 
the  general  scope  of  his  powers,  and  as  to  innocent  third  parties 
dealing  with  the  bank,  who  had  sustained  damages  occasioned  by 
such  act,  the  corporation  was  responsible. 

And  the  liability  of  the  corporation  in  such  cases  is  not  affected 
by  the  fact  that  the  particular  act  which  the  agent  has  assumed  to 
do  is  one  which  the  corporation  itself  could  not  rightfully  or  lawfully 
do.  In  Farmers',  etc..  Bank  v.  Butchers'  and  Drovers'  Bank,  16  N.  Y. 
125,  133  (69  Am.  Dec.  678),  a  case  frequently  cited  with  approval, 
the  teller  of  a  bank  was,  with  its  consent,  in  the  habit  of  certifying 
checks  for  customers,  but  he  had  no  authority  to  certify  in  the  ab- 
sence of  funds,  which  would  be  a  false  representation;  yet  it  was 
held,  where  he  had  duly  certified  a  check  though  the  drawer  had 
no  funds,  that  the  bank  was  liable,  on  the  ground  that,  as  between 
the  bank  which  had  employed  the  teller,  and  held  him  out  as  author- 
ized to  certify  checks  (which  involved  a  representation  by  one  whose 
duty  it  was  to  ascertain  and  know  the  facts),  and  an  innocent  pur- 
chaser of  the  check  so  certified,  the  bank  ought  to  be  the  loser. 
Gould  V.  Town  of  Sterling,  23  N.  Y.  439,  463 ;  Bank  of  New  York 
V.  Bank  of  Ohio,  29  N".  Y.  619,  632.  See  also  Titus  v.  President, 
etc.,  Turnpike  Road,  61  N.  Y.  237 ;  New  York  and  N.  H.  R.  R.  Co. 
V.  Schuyler,  34  N.  Y.  30,  64;  Lane  v.  Cotton,  12  Mod.  472,  490. 
The  defendant  selected  its  agent,  placed  him  in  charge  of  its  busi- 


CHAP.   XIII.]  FRAUD   FOE  BENEFIT  OF  AGENT.  495 

ness  at  the  station  in  question,  and  authorized  him  to  send  messages 
over  its  line.  Persons  receiving  despatclies  in  the  usual  course  of 
business,  when  there  is  nothing  to  excite  suspicion,  are  entitled  to 
rely  upon  the  presumption  that  the  agents  intrusted  with  the  per- 
formance of  the  business  of  the  company  have  faithfully  and  honestly 
discharged  the  duty  owed  by  it  to  its  patrons,  and  that  they  would 
not  knowingly  send  a  false  or  forged  message;  and  it  would  ordi- 
narily be  an  unreasonable  and  impracticable  rule  to  require  the 
receiver  of  a  despatch  to  investigate  the  question  of  the  integrity 
and  fidelity  of  the  defendant's  agents  acting  in  the  performance 
of  their  duties,  before  acting.  Whether  the  agent  is  unfaithful  to 
his  trust,  or  violates  his  duty  to,  or  disobeys  the  instructions  of,, 
the  company,  its  patrons  may  have  no  means  of  knowing.  If  the 
corporation  fails  in  the  performance  of  its  duty  through  the  neglect 
or  fraud  of  the  agent  whom  it  has  delegated  to  perform  it,  the  master 
is  responsible.  It  was  the  business  of  the  agent  to  send  despatches 
of  a  similar  character,  and  such  acts  were  within  the  scope  of  his 
employment,  and  the  plaintiff  could  not  know  the  circumstances 
that  made  the  particular  act  wrongful  and  unauthorized.  As  to 
him,  therefore,  it  must  be  deemed  the  act  of  the  corporation.  Bank 
of  Cal.  V.  Western  Union  Tel.  Co.,  52  Cal.  280 ;  Booth  v.  Farmers', 
etc..  Bank,  supra. 

4.  The  defendant  also  insists  that  it  is  not  liable  for  the  money 
forwarded  in  response  to  the  despatch,  because  it  was  embezzled  by 
Swanson  as  agent  of  the  express  company.  It  is  unnecessary  to  con- 
sider whether  an  action  for  the  amount  might  not  have  been  main- 
tained against  that  company  as  well  as  against  the  defendant  or  the 
agent  himself.  The  position  of  trust  in  which  the  defendant  had 
placed  him  enabled  him,  through  the  use  of  the  company's  wires  in 
the  ordinary  course  of  his  agency,  to  induce  the  plaintiff  to  place 
the  money  within  his  reach.  It  is  immaterial  what  avenue  was 
chosen.  Had  it  been  forwarded,  and  intercepted  by  a  confederate^ 
the  result  would  have  been  the  same.  The  proximate  cause  of  plain- 
tiff's loss  was  the  sending  of  the  forged  despatch.  The  actual  con- 
version of  the  money  was  only  the  culmination  of  a  successful  fraud. 
The  acts  of  Swanson  as  agent  of  the  defendant  and  of  the  express 
company  were  the  execution  of  the  different  parts  of  one  entire  plan 
or  scheme.  That  his  subsequent  acts  aided  and  concurred  in  pro- 
ducing the  result  aimed  at,  did  not  make  the  forged  despatch  any 
the  less  operative  as  the  procuring  or  proximate  cause  of  plaintiff's 
loss.  Milwaukee  &  St.  Paul  Ry.  Co.  v.  Kellogg,  94  U.  S.  469,  475; 
Martin  v.  North  Star  Iron  Works,  31  Minn.  407,  410  (18  N.  W. 
Eep.  109). 

Order  affirmed,  and  case  remanded  for  further  proceedings. 


496  STEVENSON   V.   MOBTIMEB.  [CHAP.  XIV. 


CHAPTER   XIV. 

Liability  of  Thied  Person  to  PeincipaIi. 
1.    Liability  upon  Contracts. 

HUNTINGTON   v.   KNOX. 
7  Cush.  (Mass.)  371.     1851. 
[Reported  herein  at  p.  422.] 


2.    Liability   in   Quasi-contract   for  Money  paid   under  Mistake, 

Duress,  or  Fraud. 

STEVENSON   v.    MOKTIMER. 

Cowp.  (K.  B.)  805.     1778. 

Action  for  money  had  and  received.  Non-suit  ordered.  Rule 
to  show  cause  why  non-suit  should  not  be  set  aside. 

Plaintiffs  were  owners  of  a  boat.  Defendant  was  a  custom-house 
officer.  Plaintiff's  agent,  the  master  of  the  boat,  had  paid  to  de- 
fendant certain  fees  which  were  alleged  by  plaintiffs  to  be  unauthor- 
ized and  exorbitant.  The  trial  court  ruled  that  the  duty  to  pay 
the  fees  (if  any)  was  imposed  by  statute  upon  the  master,  and  that 
the  action  could  not  be  maintained  in  the  name  of  the  plaintiffs. 

Lord  Mansfield.  The  ground  of  the  non-suit  at  the  trial  was, 
that  this  action  could  not  be  well  maintained  by  the  plaintiffs,  who 
are  the  owners  of  the  vessel  in  question;  but  it  ought  to  have  been 
brought  by  the  master,  who  actually  paid  the  money.  That  ground, 
therefore,  makes  now  the  only  question  before  us ;  as  to  which,  there 
is  not  a  particle  of  doubt.  Qui  facit  per  alium,  facit  per  se.  Where 
a  man  pays  money  by  his  agent,  which  ought  not  to  have  been  paid, 
either  the  agent,  or  the  principal,  may  bring  an  action  to  recover 
it  back.  The  agent  may,  from  the  authority  of  the  principal,  and 
the  principal  may,  as,  proving  it  to  have  been  paid  by  his  agent. 
If  money  is  paid  to  a  known  agent,  and  an  action  brought  against 
him  for  it,  it  is  an  answer  to  such  action,  that  he  has  paid  it  over 


CHAP.   XIV,]  LIABILITY   FOR   PROPERTY   DIVERTED.  497 

to  the  principal.  Sadler  v.  Evans,  4  Bur.  1984.  Here  the  statute 
lays  the  burden  on  the  master  from  necessity,  and  makes  him  per- 
sonally liable  to  penalties  if  he  neglects  to  perform  the  requisitions 
of  it.  But  still  he  is  entitled  to  charge  the  necessary  fees,  etc.,  upon 
his  doing  so,  to  the  account  of  his  owners.  And  in  this  case  there 
can  be  no  doubt  of  the  relation  in  which  the  master  stood  to  the 
plaintiffs;  for  he  is  the  witness,  and  he  swears  that  the  money  was 
paid  by  the  order  of  the  plaintiffs.  Therefore,  they  are  very  well 
warranted  to  maintain  the  action.  If  the  parties  had  gone  to  trial 
upon  an  apprehension  that  the  only  question  to  be  tried  was,  whether 
this  was  a  case  within  the  Act  of  Parliament,  consequently,  whether 
any  fee  was  due,  the  plaintiffs  could  not  have  been  permitted  to 
surprise  the  defendant  at  the  trial,  by  starting  another  ground,  upon 
which  to  recover  a  Norfolk  groat.  An  action  for  money  had  and 
received  is  governed  by  the  most  liberal  equity.  Neither  party  is 
allowed  to  entrap  the  other  in  form.  But  here,  the  plaintiff  gave 
notice,  that  he  meant  to  insist  that  too  much  was  taken;  and  there- 
fore, both  came  to  the  trial  with  equal  knowledge*  of  the  matter  in 
dispute.    Therefore,  the  rule  for  a  new  trial  must  be  absolute. 

Lord  Mansfield  added,  that  he  thought  the  plaintiffs  ought  to  let 
the  defendant  know  the  amount  of  the  excess  which  they  claimed; 
that  the  defendant  might  have  an  opportunity  of  paying  money  into 
court;  and  the  rule  was  drawn  up  accordingly. 


3.    Liability  in  Tort  for  Property  Diverted  by  Agent. 

a.   General   Rule. 

THOMPSON   V.   BAENUM. 

49  Iowa,  392.     1878. 

Replevin  for  six  ploughs.  Judgment  for  plaintiffs.  Defendants 
appeal. 

Plaintiffs  made  J.  &  S.  sales  agents  for  ploughs,  and  agreed  to 
take  approved  notes  of  purchasers.  The  ploughs  were  shipped  and 
a  shipping  bill  in  the  name  of  J.  &  S.  was  forwarded.  J.  &  S. 
turned  over  the  ploughs  in  payment  of  a  debt  due  from  them  to 
defendants. 

Day^  J.  The  court  did  not  err  in  holding  that,  under  the  terms 
of  the  order  pursuant  to  which  the  property  in  question  was  shipped, 
the  title  did  not  pass  from  the  plaintiffs  to  Johnston  &  Searles,  and 
that  they  had  no  authority  to  dispose  of  it  in  payment  of  a  pre- 
existing debt  which  they  owed  the  defendants.     Under  the  terms 

82 


498  FARQUHARSON    BROS.    &    CO.    V.    KING   &    CO.  [CHAP.   XIV. 

of  shipment  Johnston  &  Searles  were  merely  the  agents  of  plaintiffs, 
with  authority  to  dispose  of  the  implements  in  the  manner  indicated 
in  the  order.  To  hold  that  they  became  either  absolute  or  condi- 
tional purchasers  of  the  ploughs,  it  would  be  necessary  to  ignore 
utterly  many  of  the  provisions  of  the  order  pursuant  to  which  the 
shipment  was  made.  The  plaintiffs  are  not  estopped  from  insisting 
upon  their  rights  in"  the  property  because  of  the  execution  of  the 
bill  for  the  ploughs,  set  out  in  the  court's  finding  of  facts.  The  de- 
fendants were  not  induced  to  make  their  purchase  because  of  the 
existence  of  this  bill.  From  the  finding  of  facts  it  appears  that  they 
had  agreed  to  take  this  property  in  pajonent  of  the  debt  due  them, 
before  they  had  any  knowledge  of  the  existence  of  this  bill.  The  bill 
was  referred  to  simply  for  the  purpose  of  ascertaining  the  price  of 
the  ploughs.  For  cases  analogous  in  their  principles  to  this,  see 
Conable  v.  Lynch,  45  Iowa,  84;  Bayliss  v.  Davis,  47  Iowa,  340. 

Affirmed. 


FARQUHARSON   BROS.    &   CO.   v.   KING   &   CO. 

[1902]  A.  C.  325  (H.  L.). 

The  appellants  were  timber  merchants  and  warehoused  in  the 
Surrey  Commercial  Docks  the  timber  which  they  imported.  In 
1895  they  wrote  to  the  secretary  of  the  dock  company :  "  We  have 
made  arrangements  whereby  in  future  Mr.  Capon  will  sign  delivery 
orders  on  behalf  of  and  in  addition  to  the  other  members  of  the  firm, 
and  inclose  our  written  authority  for  same."  The  inclosed  authority 
ran  thus :  "  We  hereby  authorize  you  to  accept  all  transfer  or  de- 
livery orders  which  shall  be  signed  on  our  behalf  by  Mr.  H.  J.  Capon, 
whose  signature  is  subjoined,  the  company  acting  also  on  our  signa- 
ture as  before.  This  authority  is  to  remain  in  force  imtil  expressly 
revoked  in  writing  by  us."  Capon  was  a  confidential  clerk  of  the 
appellants  who  had  authority  to  sell  to  certain  recognized  customers 
of  the  appellants  timber  at  prices  and  up  to  limits  fixed  by  the 
appellants,  and  occasionally  to  make  other  sales. 

In  1896  Capon  began  a  series  of  frauds.  He  obtained  an  address 
at  Battersea  under  the  name  of  Brown,  and  from  that  address  and 
imder  that  name  offered  to  sell  and  sold  to  the  respondents,  who  were 
packing-case  manufacturers,  parcels  of  the  appellants'  timber  and 
appropriated  the  proceeds.  In  these  sales  he  represented  himself 
as  a  commission  agent  acting  on  behalf  of  Messrs.  Bayley,  fire-escape 
makers.  He  carried  out  the  sales  by  signing  orders  in  his  own  name 
to  the  dock  company  to  transfer  or  deliver  timber  to  the  order  of 
Brown,  the  timber  being  transferred  in  the  dock  company's  books 
into  the  name  of  Brown.     Then  in  the  name  of  Brown  he  signed 


CHAP.   XIV.]  LIABILITY   FOE   PROPERTY   DIVERTED.  499 

orders  to  the  dock  company  to  transfer  or  deliver  the  timber  to  the 
order  of  the  respondents.  In  the  appellants'  stock-books  Capon  made 
alterations  and  false  entries  of  fictitious  sales  so  as  to  account  for 
the  diminution  of  stock.  The  respondents  knew  nothing  of  the 
appellants,  and  nothing  of  Capon  except  under  the  name  of  Brown. 
They  bought  in  good  faith  in  ignorance  of  the  frauds.  The  frauds 
having  been  discovered  in  1900,  the  appellants  brought  an  action 
against  the  respondents  claiming  delivery  of  the  timber  or  its  value. 
The  action  was  tried  before  Mathew,  J.,  who  left  to  the  jury  the 
question.  Did  the  plaintiffs  so  act  as  to  hold  Capon  out  to  the  de- 
fendants as  their  agent  to  sell  goods  to  the  defendants?  The  jury 
answered,  Is^o.  The  learned  judge  refused  to  put  to  the  jury  a 
question  pressed  upon  him  by  the  defendants'  counsel,  namely, 
whether  the  plaintiffs  had  by  their  conduct  enabled  Capon  to  hold 
himself  out  as  owner  of  the  goods  or  as  entitled  to  sell  them.  Upon 
the  finding  of  the  jury  Mathew,  J.,  entered  judgment  for  the  plain- 
tiffs for  £1,200.  The  Court  of  Appeal  (A.  L.  Smith,  M.  R.,  and 
Vaughan  Williams,  L.  J. ;  —  Stirling,  L.  J.,  dissenting)  reversed 
that  decision  and  entered  judgment  for  the  defendants.  [1901] 
2  K.  B.  697.    Against  this  decision  the  present  appeal  was  brought. 

Earl  of  Halsbdry,  L.  C.  My  Lords,  in  this  case  I  hesitate  to 
speak  all  that  is  in  my  mind  out  of  respect  to  the  learned  judges 
who  have  taken  a  different  view;  but  for  that  I  should  have  said' 
that  this  was  a  particularly  plain  case  in  which  no  difficulty  whatever 
arises.  I  think  it  might  be  stated  compendiously  in  two  sentences. 
A  servant  has  stolen  his  master's  goods,  and  the  question  arises 
whether  the  persons  who  have  received  these  goods  innocently  can 
set  up  a  title  against  the  master.  I  believe  that  is  enough  to  dispose 
of  this  case. 

That  it  was  stealing  there  cannot  be  the  smallest  doubt,  and  indeed 
I  feel  great  hesitation  in  treating  seriously  the  argument  that  it  was 
not.  What  possible  difference  is  there  between  what  was  done  here 
by  Capon  and  the  act  of  taking  a  pocket  handkerchief  out  of  a  man's 
pocket  by  a  thief  in  the  street?  The  man  who  steals  is  a  servant: 
his  possession  is  the  possession  of  the  master.  It  is  not  denied  that 
he  had  no  actual  authority  to  dispose  of  these  goods,  and  because 
by  a  circuitous  process  he  allows  an  innocent  agent  (for  all  the 
persons  'who  acted  under  his  directions  were  perfectly  innocent) 
to  remove  the  goods  from  the  place  where  they  had  been  stored  by 
the  master,  that,  forsooth,  is  said  not  to  be  an  asportavit!  Why  not? 
Assuming  always  the  element  of  fraud,  the  intention  to  commit  a 
crime,  which  is  not  denied,  what  element  is  there  wanting  to  make 
that  a  stealing?  I  confess  I  am  puzzled  at  the  notion  that  anybody 
could  entertain  the  smallest  doubt  in  the  world  that  that  was  a 
stealing. 

Well,  if  it  was  a  stealing,  how  has  the  person  who  has  received 


500  FARQUHARSON   BROS.   &   CO.   V.    KING   &    CO.       [CIIAP.    XIV. 

the  goods  acquired  a  right  to  those  goods  which,  it  is  equally  not 
denied,  originally  belonged  to  the  appellants  in  this  case?  When 
has  the  property  been  changed,  and  by  what  circumstances?  It  is 
impossible,  I  think,  to  answer  that  question  except  in  one  way.  There 
has  been  no  property  changed :  the  thief  could  give  no  title  whatever. 
The  circumstances  of  this  case  show  conclusively  that  there  is  nothing 
.to  prevent  this  being  a  theft,  and,  it  being  a  theft,  the  thief  could 
convey  no  title.     That  disposes  of  the  case. 

My  Lords,  but  for  the  respect  I  entertain  for  the  learned  judges 
who  have  taken  a  different  view  from  myself,  I  should  leave  the  case 
there,  because  I  think  it  is  too  plain  for  argument;  but  a  great  deal 
has  been  said  upon  the  subject  of  the  right  arising  from  estoppel. 
I  really  do  not  understand  what  estoppel  has  to  do  with  this  case. 
The  mode  by  which  the  goods  were  removed  and  the  asportavit 
incident  to  the  felony  accomplished  was,  as  a  matter  of  fact,  carried 
out  by  the  innocent  act  of  the  dock  company;  but  it  is  a  mistake 
to  talk  of  the  relations  between  the  dock  company  and  the  appellants 
here  as  if  there  was  any  question  of  estoppel.  It  would  not  be  true 
to  say,  even  as  regards  the  dock  company,  that  there  was  an  estoppel : 
there  was  no  estoppel  at  all.  Estoppel  arises  where  you  are  pre- 
cluded from  denying  the  truth  of  anything  which  you  have  repre- 
sented as  a  fact  although  it  is  not  a  fact :  but  no  such  question  arises 
here.  All  that  the  dock  company  did  they  were  expressly  authorized 
to  do  by  the  appellants;  there  would  not,  therefore,  be  an  estoppel 
as  between  them  and  the  dock  company  at  all ;  it  would  be  that  they 
had  acted  in  pursuance  of  the  real  and  direct  authority  of  the 
appellants,  and,  after  the  letter  of  authorization,  what  they  did 
was  expressly  authorized  by  the  appellants.  If  it  could  be  argued 
here  that  the  appellants  had  represented  their  clerk  Capon  to  be 
invested  with  what,  over  and  over  again  with  a  degree  of  reiteration 
somewhat  wearisome,  last  night  we  heard  called  a  "  disposing  power," 
"  perfect  dominion,"  and  "  control,"  and  such  words  as  those,  which 
are  ambiguous  in  themselves  unless  you  explain  what  the  disposing 
power  and  what  the  dominion  and  control  mean  —  I  say,  if  they 
had  represented  their  clerk  Capon  to  be  invested  with  disposing 
power,  and  (note  the  importance  of  the  next  sentence)  if  anybody, 
supposing  Capon  to  be  invested  with  that  power,  had  acted  upon  it 
to  his  own  prejudice,  then  undoubtedly  estoppel  would  have  arisen; 
the  person  who  had  improperly  and  negligently  allowed  Capon  to 
be  apparently  so  invested  with  authority  would  be  estopped  from 
denying  that  Capon  had  authority. 

So  far  the  matter  would  be  quite  clear ;  but  when  we  come  to  look 
at  what  the  facts  of  this  case  are,  what  in  the  world  has  that  to  do 
with  the  question  that  arises  here?  Capon  was  unknown;  the  appel- 
lants were  unknown;  nobody  dreams  of  suggesting  that  the  re- 
spondents here  acted  upon  the  faith  of  Capon  being  invested  with 


CHAP.    XIV.]  LIABILITY    FOR   PROPERTY   DIVERTED.  501 

that  authority.  Tliey  never  heard  of  Capon,  they  never  heard  of 
the  appellants,  but  the  clerk  who  has  committed  the  fraud,  ingeni- 
ously availing  himself  of  his  power  of  signing  orders  for  delivery, 
gave  a  delivery  order  to  change  the  name  in  which  the  goods  were 
stored  in  the  dock  company's  books  to  the  name  of  Brown.  Pro- 
fessing to  be  Brown,  and  professing  to  act  on  behalf,  not  of  the 
appellants,  but  of  a  third  person  named  Bayley,  he  procures  the 
removal  of  these  goods  by  innocent  agents,  as  I  have  described  them, 
under  the  authority  of  Brown,  he  having  fraudulently  transferred 
the  goods  in  the  dock  company's  books  from  the  name  of  his  master 
to  that  of  Brown  —  a  fictitious  person  —  and  Brown  in  his  turn 
procures  these  goods  to  be  delivered  to  the  present  respondents ;  and, 
forsooth,  it  is  said  that  that  establishes  an  estoppel.  My  Lords,  I 
am  bewildered  at  the  absurdity  of  such  a  suggestion;  I  really  do  not 
understand  in  what  possible  way  it  can  arise.  That,  I  should  have 
thought,  was  quite  enough  to  dispose  of  this  case. 

My  Lords,  so  far  as  I  am  concerned  I  really  am  not  concerned' 
to  defend,  if  it  were  attacked,  the  language  which  I  appear  to  have' 
used  in  Henderson  v.  Williams,  [1895]  1  Q.  B.  521.  I  adhere  to 
every  word  of  the  judgment  I  then  delivered.  It  is  not  a  question 
of  whether  I  am  prepared  to  affirm  the  words  which  were  quoted 
or  not.  I  speak  of  it,  I  hope,  impartially;  if  I  thought  the  words 
were  incautious  I  should  not  hesitate  to  correct  them  now;  but  I 
do  not  know  now  what  it  is  I  am  supposed  to  have  said  that  can  have 
led  to  this  misapprehension.  I  believe  the  proposition  of  law  which 
I  then  gave  is  accurate,  and  I  am  prepared  to  adopt  it;  but  what 
application  has  it  to  this  case?  Curiously  enough,  the  only  passage 
which  has  been  assailed  as  giving  rise  to  the  difiiculty  here  is  not 
my  own  language  at  all,  but  the  language  of  an  American  judge, 
though  it  is  true  I  quoted  it  with  approval.  Let  us  see  what  the 
language  is:  I  believe  it  to  be  accurate.  I  observe  that  a  few  words 
seem  to  have  been  omitted  from  the  consideration  of  the  learned 
judges  who  commented  on  this  matter.  The  language  of  the  learned 
judge  (Savage,  C.  J.)  quoted  by  me  is  this :  Speaking  of  a  bona  fide 
purchaser,  who  has  purchased  property  from  a  fraudulent  vendee 
and  given  value  for  it  he  says :  "  He  is  protected  in  doing  so  upon 
the  principle  just  stated,  that  when  one  of  two  innocent  persons 
must  suffer  from  the  fraud  of  a  third,  he  shall  suffer  who,  by  his 
indiscretion,  has  enabled  such  third  person  to  commit  the  fraud." 
Those  words  "  who  by  his  indiscretion "  appear  not  to  have  made 
much  impression  upon  those  who  were  commenting  upon  this  matter. 
What  indiscretion  did  the  appellants  here  commit?  They  entrusted 
their  clerk  with  the  delivery  orders.  It  is  said  that  in  some  excep- 
tional cases  he  was  allowed  to  make  a  contract;  but  what  has  that 
got  to  do  with  it  ?  No  one  knew  that  outside  of  the  firm  themselves ; 
and  you  might  just  as  well  say  in  the  case  of  a  shopman  in  a  fumi- 


502  FABQUHAESON   BROS.    &    CO.   V.   KING   &    CO.       [CHAP.   XI7. 

ture  broker's  shop,  tliat  because  he  is  there,  because  he  habitually 
delivers  goods  to  the  orders  which  his  master  receives,  that  gives 
him  to  all  the  world  the  power  of  giving  a  title  if  he  steals  his  mas- 
ter's tables  and  chairs  and  delivers  them  to  somebody  else. 

My  Lords,  I  confess  I  am  a  little  surprised  that  two  of  the  learned 
judges  seem  to  be  under  the  impression  that  my  proposition,  quoted, 
as  I  have  said,  from  an  American  judge,  was  that  any  person  who 
has  enabled  another  by  any  means  to  conunit  a  fraud  must  be  the 
person  to  suffer  when  two  innocent  persons  are  in  question.  Of 
course  it  depends  on  the  sense  in  which  you  are  to  understand  the 
word  "  enabled."  As  I  put  it  to  the  learned  counsel  yesterday,  in 
one  sense  every  man  who  sells  a  pistol  or  a  dagger  enables  an  intend- 
ing murderer  to  commit  a  crime;  but  is  he,  in  selling  a  pistol  or 
a  dagger  to  some  person  who  comes  to  buy  in  his  shop,  acting  in 
breach  of  any  duty?  Does  he  owe  any  duty  to  all  the  world,  as  is 
suggested  here,  to  prevent  people  taking  advantage  of  his  selling 
pistols  or  daggers  in  his  business,  because  he  does  in  one  sense  enable 
a  person  to  commit  a  crime?  It  seems  to  me  that  the  moment  you 
analyze  what  is  intended  by  this  argument  the  answer  is  plain;  and 
when  you  analyze  what  is  the  only  function  which  this  man  Capon 
is  entitled  to  perform  it  is  simply  this  —  that  he  was  a  delivery  clerk. 
But,  say  the  learned  counsel  for  the  respondents,  not  only  was  he  a 
delivery  clerk,  but  sometimes  he  had  power  and  authority  to  make 
a  contract.  Suppose  he  had  —  what  then?  Was  anybody  misled 
by  that?  Did  anybody  act  upon  that  belief?  No  one.  Therefore, 
any  notion  of  anybody  acting  upon  something  that  was  held  out  and 
represented  is  entirely  out  of  the  question. 

My  lords,  it  appears  to  me  when  one  analyzes  the  matter  it  comes 
to  this  broad  proposition  —  that  because  you  have  given  authority 
to  your  clerk  to  deliver  goods,  for  that  is  the  sole  thing  that  could  be 
established  by  looking  at  the  books  either  of  the  firm  or  of  the  dock 
company,  therefore,  if  any  person  in  the  employment  of  that  master 
takes  advantage  of  that  for  the  purpose  of  committing  a  felony, 
thereupon  that  person  is  invested  with  the  power  to  give  the  receiver 
a  good  title. 

My  lords,  I  think  the  state  of  the  law  would  have  been  perfectly 
clear  without  it;  but  the  Sale  of  Goods  Act  has  disposed  of  any 
such  question,  because  it  says,  "  Subject  to  the  provisions  of  this  Act, 
where  goods  are  sold  by  a  person  who  is  not  the  owner  thereof,  and 
who  does  not  sell  them  under  the  authority  or  with  the  consent  of 
the  owner,  the  buyer  acquires  no  better  title  to  the  goods  than  the 
seller  had,  unless  the  owner  of  the  goods  is  by  his  conduct  precluded 
from  denying  "  —  what  ?  —  "  the  seller's  authority  to  sell."  Now, 
where  comes  in  here  the  operation  of  that  saving  clause?  What 
authority  was  there  to  sell?  None.  What  representation  was  there 
of  Capon's  authority  to  sell?    None.    Therefore,  when  one  analyzes 


CHAP.   XIV.]  LIABILITY    FOR   PROPERTY   DIVERTED.  503 

this  case  the  two  sentences  with  which  I  commenced  my  judgment 
appear  to  me  to  entirely  dispose  of  it.  This  was  a  theft,  and  the 
thief  could  give  no  better  title  than  he  himself  had,  which  was  none. 
Therefore,  it  seems  to  me  luce  clarius  that  the  appellants  are  en- 
titled to  succeed,  and  I  move  your  Lordships  to  reverse  the  order 
appealed  from  with  costs. 

Lord  Lindley.  My  lords,  I  also  think  this  case  is  extremely 
plain  when  it  is  understood. 

Capon  sold  the  plaintiffs'  timber  without  their  authority,  and 
sold  it  to  the  defendants.  The  defendants  honestly  bought  the 
timber,  and  they  had  no  notice  that  Capon  had  no  right  to  sell  it; 
but  there  was  no  sale  in  market  overt,  and  the  Factors  Acts  do  not 
apply.  The  mere  fact,  therefore,  that  the  defendants  acted  honestly 
does  not  confer  upon  them  a  good  title  as  against  the  plaintiffs,  the 
real  owners  of  the  timber.  The  plaintiffs  are  entitled  to  recover 
the  timber  or  its  value,  unless  they  are  precluded  by  their  conduct 
from  denying  Capon's  authority  to  sell.  (Sale  of  Goods  Act,  1893, 
s.  21,  and  see  s.  61.)  Capon  sold  under  the  name  of  Brown,  repre- 
senting himself  to  be  an  agent  of  some  persons  named  Bayley,  who 
were  well  known  in  the  timber  trade.  The  defendants  bought  on 
the  faith  of  his  being  what  he  pretended  to  be.  What  have  the  plain- 
tiffs done  which  precludes  them  from  denying,  as  against  the  de- 
fendants. Capon's  right  to  do  what  he  pretended  he  was  entitled  to 
do?  Putting  the  question  in  another  form.  WTiat  have  the  plain- 
tiffs done  to  preclude  them  from  denying,  as  against  the  defendants. 
Capon's  right  to  sell  to  them?  To  answer  those  questions  it  is 
necessary  to  consider  what  the  plaintiffs  did. 

Capon  was  the  plaintiffs'  confidential  clerk;  they  gave  him  a 
limited  power  of  sale  to  certain  customers,  and  a  general  written 
authority  to  sign  delivery  orders  on  their  behalf;  and  the  plaintiffs 
sent  that  written  authority  to  the  dock  company  which  stored  the 
plaintiffs'  timber.  This  authority  would,  of  course,  protect  the 
dock  company  in  delivering  timber  as  ordered  by  Capon,  however 
fraudulently  he  might  be  acting,  if  the  dock  company  had  no  notice 
of  anything  wrong.  By  abusing  his  authority  Capon  made  timber 
belonging  to  the  plaintiffs  deliverable  by  the  dock  company  to  him- 
self under  the  name  of  Brown.  In  that  name  he  sold  it,  and  pro- 
cured it  to  be  delivered  to  the  defendants.  WTiat  is  there  here  which 
precludes  the  plaintiffs  from  denying  Capon's  right  to  sell  to  the 
defendants  ? 

What  have  the  plaintiffs  done  to  mislead  the  defendants  and  to 
induce  them  to  trust  Capon?  Absolutely  nothing.  The  question  for 
decision  ought  to  be  narrowed  in  this  way,  for  it  is  in  my  opinion 
clear  that,  when  section  21  of  the  Sale  of  Goods  Act  has  to  be  applied 
to  a  particular  case,  the  inquiry  which  has  to  be  made  is  not  a  general 
inquiry  as  to  the  authority  to  sell,  apart  from  all  reference  to  the 


604  FARQUHARSON   BROS.   &    CO.    V.   KING   &   CO.      [CHAP.   XIV. 

particular  case,  but  an  inquiry  into  the  real  or  apparent  authority 
of  the  seller  to  do  that  which  the-  defendants  say  induced  them  to 
buy. 

It  was  pointed  out  by  Parke,  J.,  afterwards  Lord  Wensleydale,  in 
Dickinson  v.  Valpy,  [1829]  10  B.  &  C.  at  p.  140;  34  R.  R.  355,  that 
**  holding  out  to  the  world "  is  a  loose  expression ;  the  "  holding 
out"  must  be  to  the  particular  individual  who  says  he  relied  on  it, 
or  under  such  circumstances  of  publicity  as  to  justify  the  inference 
that  he  knew  of  it  and  acted  upon  it.  The  same  principle  must  be 
borne  in  mind  in  dealing  with  cases  like  the  present.  I  do  not 
myself  see  upon  what  ground  a  person  can  be  precluded  from  denying 
as  against  another  an  authority  which  has  never  been  given  in  fact, 
and  which  the  other  has  never  supposed  to  exist. 

It  was  urged  that  the  dock  company  were  led  by  the  plaintiffs  to 
obey  Capon's  orders  and  to  deliver  to  Brown,  and  that  the  defendants 
were  induced  by  the  dock  company  to  deal  with  Brown,  or  at  all 
events  to  pay  him  on  the  faith  of  his  being  entitled  to  the  timber;  so 
that  in  fact  the  plaintiffs,  through  the  dock  company,  misled  the 
defendants.  This  is  ingenious,  but  unsound.  Except  that  delivery 
orders  were  sent  in  the  name  of  Brown  to  the  defendants,  and  were 
acted  on  by  the  dock  company,  there  is  no  evidence  connecting  the 
dock  company  with  the  defendants  in  these  transactions;  and  the 
answer  to  the  contention  is  that  the  defendants  were  misled,  not  by 
what  the  plaintiffs  did  nor  by  what  the  plaintiffs  authorized  the 
dock  company  to  do,  but  by  Capon's  frauds. 

It  is,  of  course,  true  that  by  employing  Capon  and  trusting  him 
as  they  did  the  plaintiffs  enabled  him  to  transfer  the  timber  to  any 
one;  in  other  words,  the  plaintiffs  in  one  sense  enabled  him  to 
cheat  both  themselves  and  others.  In  that  sense,  every  one  who  has 
a  servant  enables  him  to  steal  whatever  is  within  his  reach.  But  if 
the  word  "  enable  "  is  used  in  this  wide  sense,  it  is  clearly  untrue 
to  say,  as  Ashhurst,  J.,  said  in  Lickbarrow  v.  Mason,  [1787]  2  T.  R. 
63 ;  1  R.  R.  425,  "  that  wherever  one  of  two  innocent  persons  must 
suffer  by  the  acts  of  a  third,  he  who  has  enabled  such  third  person 
to  occasion  the  loss  must  sustain  it."  Such  a  doctrine  is  far  too 
wide;  and  the  cases  referred  to  in  the  argument  and  commented  on 
by  Vaughan  Williams,  L.  J.,  show  that  it  cannot  be  relied  upon  with- 
out considerable  qualification. 

Lamb  v.  Attenborough,  1  B.  &  S.  831,  which  is  very  like  this, 
is  a  good  illustration  of  the  unsoundness  of  the  doctrine  in  question, 
if  taken  literally.  Johnson  v.  Credit  Lyonnais  Co.,  3  C.  P.  D.  32, 
is  another  illustration  to  the  like  effect.  So  far  as  I  know,  the  doc- 
trine has  never  been  judicially  applied  where  nothing  has  been  done 
by  one  of  the  innocent  parties  which  has  in  fact  misled  the  other ;  see 
Story  on  Agency,  s.  133. 

In  Vickers  v.  Hertz,  L.  R.  2  H.  L.  Sc.  113,  the  defendant  acted 


CHAP.    XIV.]  LIABILITY    FOR    PROPERTY    DIVERTED.  505 

on  the  faith  of  a  document  signed  by  the  plaintiff.  So  in  Babcock  v. 
Lawson,  4  Q.  B.  D.  394.  In  Brocklesb}'  v.  Temperance  Building 
Society,  [1895]  A.  C.  1T3,  the  bank  advanced  money  on  the  faith  of 
the  document  signed  by  the  plaintiff,  and  the  defendants  who  had 
paid  off  the  bank  were  entitled  to  the  benefit  of  the  bank's  security. 
In  Henderson  v.  Williams,  [1895]  1  Q.  B.  531,  the  defendant  acted 
on  orders  given  by  the  owner  of  the  goods;  the  action  was  defended 
on  his  behalf,  and  he  had  entrusted  the  goods  to  Fletcher,  to  whom 
the  defendant  had  attorned.  These  cases  do  not  really  assist  the 
defendants.    J^or  does  Dyer  v.  Pearson,  3  B.  &  C.  38 ;  27  R.  R.  286. 

In  the  present  case,  in  my  view  of  it,  Capon  simply  stole  the 
plaintiffs'  goods  and  sold  them  to  the  defendants,  and  the  defendants' 
title  is  not  improved  by  the  circumstance  that  the  theft  was  the  re- 
sult of  an  ingenious  fraud  on  the  plaintiffs  and  on  the  defendants 
alike.  The  defendants  were  not  in  any  way  misled  by  any  act  of  the 
plaintiffs  on  which  they  placed  reliance;  and  the  plaintiffs  are  not,, 
therefore,  precluded  from  denying  Capon's  authority  to  sell. 

The  question  which  the  defendants  pressed  Mathew,  J.,  to  leave  to 
the  jury,  and  which  the  late  Master  of  the  Rolls  and  Vaughan  Wil- 
liams, L.  J.,  thought  ought  to  have  been  left  to  them  —  namely,. 
"Did  the  plaintiffs  by  their  conduct  enable  Capon  to  hold  himself 
out  as  the  owner  of  the  goods  or  as  having  the  power  to  dispose  of 
them?"  would,  in  my  opinion,  have  been  seriously  misleading 
unless  accompanied  by  explanations  which  would  have  taken  out  of 
it  the  element  of  error  introduced  by  the  word  "  enable."  I  feel  very 
strongly  the  observation  that  if  the  defendants  are  right  the  Factors 
Acts  would  never  have  been  wanted. 

In  my  opinion  Mathew^  J.,  was  quite  right  in  leaving  to  the  jury 
the  question  as  he  framed  it :  "  Did  the  plaintiffs  so  act  as  to  hold 
Capon  out  to  the  defendants  as  their  agent  to  sell  goods  to  the  de- 
fendants?" The  verdict  is  unimpeachable,  and  it  is  fatal  to  the 
defendants. 

The  appeal  ought  to  be  allowed  with  costs  both  here  and  below. 

Order  of  the  Court  of  Appeal  reversed  and  judgment  of  MatheWy 
J.,  restored  with  costs  here  and  below. 


b.    Exception:    Indicia  of  Ownership. 
McCAULEY  V.  BROWN. 

2  Daly  (N.  Y.  C.  P.)  426.     1869. 

Action  to  recover  the  value  of  a  truck  and  set  of  harness  alleged 
to  have  been  converted  by  defendants.    Judgment  for  plaintiff. 
The  property  was  bought  by  defendants  of  J.  M.,  a  brother  of 


606  McCAITLET   V.   BEOWN.  [CHAP.   XIV. 

plaintiff.  J.  M.,  with  plaintiff's  knowledge,  had  taken  out  a  license 
in  his  own  name  for  the  truck,  and  had  held  himself  out  as  owner. 
Defendants,  before  buying,  went  to  the  mayor's  ofiBce,  and  ascertained 
that  the  license  was  in  the  name  of  J.  M. 

Barrett,  J.  By  the  provisions  of  the  Revised  Ordinances  of  1859, 
p.  356,  §  2,  it  is  made  unlawful  "  for  any  person  to  receive  or  hold 
a  license  to  keep  public  carts,  or  to  be  a  public  cartman,  unless  he 
be  the  actual  owner  of  the  cart  or  carts  so  licensed."  The  taking  out 
of  the  license  for  the  truck  in  question  was,  therefore,  a  declaration 
of  ownership  made  by  the  plaintiff's  brother,  John  McCauley,  with 
the  plaintiff's  full  knowledge  and  consent,  upon  which  the  defendants 
had  a  right  to,  and  did,  rely  in  making  the  purchase.  These  facts, 
coupled  with  John  McCauley 's  actual  possession,  and  seeming  owner- 
ship, bring  the  case  within  the  principles  that  when  the  owner  of 
goods  stands  by  and  permits  another  to  treat  them  as  his  own,  whereby 
a  third  person  is  led  to  purchase  them  in  good  faith,  the  former 
cannot  recover  the  goods,  or  their  value,  from  the  buyer.  Thompson 
V.  Blanchard,  4  N.  Y.  303;  Hibbard  v.  Stewart,  1  Hilt.  207 
Brewster  v.  Baker,  16  Barb.  613 ;  Cheeney  v.  Arnold,  18  Barb.  434 
Dezell  V.  Odell,  3  Hill,  215;  Pickard  v.  Sears,  6  Ad.  &  El.  469 
Oregg  V.  Wells,  10  Ad.  &  El.  90.  The  doctrine  applies,  although  the 
plaintiff  was  not  present  when  the  bargain  was  made.  It  is  sufficient 
that,  by  his  previous  conduct,  he  enabled  his  brother  to  assume  the 
credit  of  ownership,  and  to  deceive  the  defendants.  Thompson  v. 
Blanchard,  supra. 

The  judgment  with  respect  to  the  truck  was,  therefore,  erroneous ; 
and  as  there  was  no  evidence  of  the  separate  value  of  the  harness, 
except  the  wholly  insufficient  statement  of  what  the  plaintiff  had 
paid  for  it  some  seven  months  prior  to  the  sale,  we  have  no  basis  for 
a  modification  of  the  judgment.  Besides,  the  conduct  of  these  brothers 
savors  very  strongly  of  collusion.  John  McCauley  had  previously 
offered  the  truck  for  sale,  with  the  plaintiff's  knowledge,  and  seem- 
ingly with  his  consent  —  certainly  without  any  expression  of  his 
disapprobation.  From  these  and  other  unfavorable  circumstances, 
such  as  the  plaintiff's  failure  to  assert  his  title  upon  the  discovery 
of  the  property  in  the  defendants'  possession,  we  are  not  inclined  to 
strain  a  point  with  respect  to  the  evidence  of  value,  for  the  purpose 
of  upholding  this  judgment,  even  in  part.  It  is  fairer  to  leave  the 
parties  in  such  a  position,  that  the  plaintiff  may,  if  he  think  fit, 
bring  a  fresh  action  for  the  value  of  the  harness,  when  the  defend- 
ants can  have  these  facts  and  circumstances  submitted  to  a  jury, 
upon  the  question  of  collusion  and  authority. 

The  judgment  should  he  reversed.^ 

•  An  instructive  case  on  tlie  indicia  of  ownerslilp  exception  is  Nixon  v.  Brown, 
57  N.  H.  34.  In  tills  case  the  plaintiff  employed  one  M  to  buy  a  iiorse  for  liim. 
M  bought  the  horse,  paying  for  it  with  the  plaintilTB  money,  and  tools  a  bill  of  sale 


CHAP.   XIV.]  LIABILITY   FOR  PEOPEETT  DIVEETED.  507 

PICKERING   V.   BUSK. 

15  East  (K.  B.)  38.     1812. 
(Reported  herein  at  page  361.] 


c.    Exception:    Factors   Acts. 
STEVENS  V.  WILSON. 

3  Denio  (N.  Y.)  472.     1846. 

On  error  from  the  Supreme  Court.  Wilson  brought  replevin 
against  Stevens,  in  the  Superior  Court  of  the  city  of  New  York,  for 
a  quantity  of  feathers.  Verdict  and  judgment  for  plaintiff;  which 
judgment  was  affirmed  on  error  in  the  Supreme  Court.  The  ques- 
tion in  the  case  was  whether  the  defendant,  who  had  made  advances 
upon  the  feathers  to  one  Colgate,  the  plaintiff's  factor,  vnth  knowl- 
edge that  he  was  not  the  owTier  of  the  property,  was  entitled  to  hold 
it  for  such  advances. 

The  Chanceli-or.*  Upon  the  charge  of  the  judge  the  jury  must 
have  decided  that  the  goods  did  not  belong  to  Colgate,  the  factor  or 
agent  of  the  defendants  in  error,  but  were  in  his  hands  for  sale  as 
the  factor  of  the  real  owners.  And  I  think  the  judge  who  tried  the 
cause,  as  well  as  the  Supreme  Court,  was  right  in  supposing  that  the 
Act  of  1830,  for  the  amendment  of  the  law  relative  to  principals  and 
factors  or  agents  (1  E.  S.  762,  tit.  5  of  2d  ed.),  does  not  authorize 
the  agent  or  factor  for  the  purposes  of  sale,  to  pledge  the  goods  to 
a  person  who  knows  the  character  in  which  the  pledgor  holds  the 
same.  Mr.  Justice  Bronson,  who  delivered  the  opinion  of  the  Supreme 
Court  in  this  case,  has  correctly  stated  the  rule  of  the  common  law, 
that  an  agent  or  factor,  intrusted  with  the  goods  of  his  principal 
to  sell,  could  not  pledge  the  same  so  as  to  authorize  the  pledgee  to 
hold  them  for  advances  made  thereon  to  the  factor  or  agent,  even  if 
he  supposed  the  latter  to  be  the  real  owner  of  the  goods.  Paterson 
V.  Tash,  2  Strange,  1178;  Daubigny  v.  Duval,  5  T.  R.  604.  Even 
where  the  principal  had  dra^sTi  upon  the  factor  in  anticipation  of 
the  sale  of  the  goods,  it  was  held  in  the  cases  of  Fielding  v.  Kymer, 
2  Brod.  &  Bing.  639,  and  Graham  v.  Dyster,  6  Maule  &  Sel.  1,  that 

in  his  own  name.  Afterwards  be  Informed  plaintiff  of  what  he  had  done,  and 
showed  him  the  bill  of  sale ;  but  the  plaintiff  permitted  him  to  go  away  with  the 
burse  and  th:^  bill  of  sale  still  In  his  possession.  M  thereupon  went  to  the  defendant, 
who  bad  no  knowledge  of  the  agency,  showed  him  the  bill  of  sale,  sold  him  the  horse 
for  cash,  and  absconded.  Held,  that  the  plaintiff  could  not  recover  in  an  action  of 
trover  for  the  horse. 
*  Walworth. 


508  STEVENS   V.   WILSON.  [CHAP.   XlVy 

the  factor  was  not  authorized  to  pledge  the  goods.  In  this  last  case, 
Mr.  Justice  Abbott,  afterwards  Lord  Chief  Justice  Tenterden,  said 
it  had  been  established  by  many  decisions,  and  might  be  considered 
as  a  settled  principle  of  law,  that  a  factor  could  not  pledge  so  as  to 
transfer  his  lien  to  the  pawnee.  This  rule  of  the  common  law  was 
founded  upon  the  principle  that  he  who  deals  with  one  acting  ex 
mandato,  can  obtain  from  him  no  better  or  different  title  than  that 
which  his  mandate  authorizes  him  to  give. 

The  statute  4  Geo.  IV.,  c.  83,  passed  in  July,  1823,  altered  the 
common-law  rule  in  England  in  this  respect,  as  to  persons  dealing 
with  the  consignees  of  factors  intrusted  with  goods  for  the  purpose 
of  sale,  so  far  as  to  protect  the  rights  of  the  pledgee  to  the  extent 
of  the  advances  he  had  made,  or  the  liabilities  he  had  incurred,  upon 
the  faith  of  the  pledge  and  the  supposition  that  the  nominal  con- 
signor, the  factor,  was  the  owner  of  the  goods.  But  this  statute  con- 
tained an  express  exception  of  cases  where  the  consignee  was  aware 
of  the  fact  that  the  nominal  consignor  was  not  the  real  owner  of 
the  goods.  It  also  contained  a  provision  that  the  deposit  or  pledge 
of  goods  by  the  consignee  thereof  should  give  the  person  with  whom 
they  were  deposited  or  pledged  the  same  right,  and  no  other,  that 
the  consignee  himself  possessed.  The  provisions  of  that  act  appear 
to  have  been  confined  to  consignees  of  goods,  and  persons  dealing 
with  them,  where  the  consignees  supposed  the  consignors  were  the 
real  owners  of  such  goods,  when  in  fact  such  consignors  had  only  been 
intrusted  with  the  goods  for  the  purpose  of  sale.  The  first  section 
of  the  Act  of  6  Geo.  IV.,  c.  94,  passed  about  two  years  afterwards^ 
contained  but  a  very  slight  modification  of  the  previous  act,  so  as  to 
protect  the  consignee  without  notice,  and  others  dealing  with  him, 
before  they  had  notice  that  the  person  in  whose  name  the  goods  were 
shipped,  with  the  assent  of  the  owner,  was  not  himself  the  real 
owner.  But  the  second  section  of  that  act  extended  the  protection 
to  persons  dealing  with  an  agent  or  factor  who  had  in  his  possession 
documentary  evidence  showing  him  prima  facie  to  be  the  owner  of 
the  goods,  and  where  the  persons  so  dealing  with  him  were  ignorant 
of  his  fiduciary  character,  and  had  bought  the  goods  or  advanced 
money  or  negotiable  securities  upon  the  deposit  or  pledge  of  the  goods 
and  upon  the  faith  of  such  prima  facie  evidence  of  ownership.  The 
third  section  declared  that  persons  taking  such  goods  in  deposit  or 
pledge  for  an  antecedent  debt,  even  without  notice  of  the  fiduciary 
character  of  the  agent  or  factor  having  in  his  possession  such  prima 
facie  evidence  of  ownership,  should  acquire  no  other  right  or  interest 
therein,  as  against  the  owner,  than  the  agent  or  factor  himself  pos- 
sessed; but  might  acquire,  possess,  and  enforce  the  right  to  that 
extent.  And  the  fifth  section  expressly  authorized  the  taking  of 
such  goods  in  pledge  from  the  agent,  or  broker,  having  such  prima 
fade  evidence  of  title,  even  with  notice  of  his  fiduciary  character; 


CHAP.    XIV.]  LIABILITY    FOR    PROPERTY   DIVERTED.  59.3 

but  the  pledgee  was  only  to  obtain  such  right  or  interest  therein  as 
the  pledgor  himself  possessed.^ 

Our  act  relative  to  principals  and  factors  or  agents,  in  the  first 
and  second  sections,  protects  consignees  of  merchandise  shipped  in 
the  name  of  a  person  who  is  not  the  real  owner,  where  they  are  igno- 
rant of  the  fact  that  such  consignor  is  not  the  owner.  Tlie  third 
section  then  provides  that  "  Every  factor  or  other  agent  intrusted 
with  the  possession  of  any  bill  of  lading,  custom-house  permit,  or 
warehouse-keeper's  receipt  for  the  delivery  of  any  such  merchandise, 
and  every  such  factor  or  agent,  not  having  the  documentary  evidence 
of  title,  who  shall  be  intrusted  with  the  possession  of  any  merchandise 
for  the  purposes  of  sale,  or  as  a  security  for  any  advances  to  be 
made  or  obtained  thereon,  shall  be  deemed  to  be  the  true  owner 
thereof,  so  far  as  to  give  validity  to  any  contract  made  by  such  agent 
with  any  other  person  for  the  sale  or  disposition  of  the  whole  or 
any  part  of  such  merchandise,  for  any  money  advanced,  or  negotiable 
instrument  or  other  obligation  in  writing  given  by  such  other  person 
upon  the  faith  thereof."  (1  E.  S.  762,  tit.  5,  §  3,  of  2d  ed.)  It  is 
perfectly  evident  from  the  whole  of  this  section,  taken  in  connec- 
tion with  the  second  section  and  the  previous  law  upon  the  subject, 
that  the  words,  on  the  faith  thereof,  refer  to  the  ownership  of  the 
goods;  so  as  to  protect  the  purchaser,  or  pledgee,  who  has  advanced 
his  money  or  given  his  negotiable  note  or  acceptance  or  other  written 
obligation,  upon  the  faith  or  belief  of  the  fact  that  the  person  with 
whom  he  dealt  was  the  real  owner  of  the  property.  Any  other  con- 
struction of  the  statute  would  do  great  injustice  to  the  legislature 
who  passed  the  Act  of  1830.  For  it  would  authorize  the  agent  or 
factor  to  commit  a  fraud  upon  his  principal,  with  the  connivance  of 
the  purchaser  or  pledgee  who  had  notice  of  the  fiduciary  character 
of  the  vendor  or  pledgor.  It  would  also  be  in  direct  conflict  with  the 
seventh  section  of  the  same  statute,  which  makes  such  a  fraud  an 
indictable  offence,  not  only  against  the  agent  or  factor,  but  also 
against  every  person  who  shall  knowingly  connive  with  or  aid  him 
in  the  commission  of  the  fraud.* 

Our  statute  does  not,  as  in  the  fifth  section  of  the  6  Geo.  IV., 
c.  94,  authorize  the  agent  or  factor  to  pledge  the  goods  of  his  principal 
to  the  extent  of  his  lien,  to  persons  who  are  aware  of  his  fiduciary 
character,  and  without  any  authority  for  that  purpose  from  his  prin- 
cipal. But  even  under  the  British  statute  it  has  been  held  that  the 
mere  liability  of  the  agent  or  factor,  upon  acceptances  for  his  prin- 
cipal, is  not  sufficient  to  give  such  agent  or  factor  a  lien  which  will 
authorize  him  to  pledge  the  goods  to  a  third  person  without  the  con- 

1  See  Navulshaw  v.  Brownrigg,  2  DeG.  M.  &  G.  441,  and  Cole  v.  N.  W.  Bank, 
L.  R.  9  C.  P.  470,  for  valuable  discussions  of  common  law  principles  and  the  earlier 
English  Factors  Acts. 

*  Repealed  by  L.  1S86,  Ch.  593. 


610  STEVENS   V.   WILSON.  [CHAP.   XIV. 

sent  of  his  principal.  In  Fletcher  v.  Heath,  7  Bam.  &  Cress.  517, 
and  Blandy  v.  Allan,  Danson  &  Lloyd's  Merc.  Cas.  22,  the  factor 
was  under  acceptances  for  his  principal  at  the  time  he  pledged  the 
goods  for  advances  thereon,  but  which  acceptances  the  principal 
afterwards  duly  paid  or  provided  for.  And  it  was  held  that  the 
pledgee  could  not  hold  the  goods  to  the  amount  of  the  acceptances 
for  which  the  factor  was  liable  at*the  time  the  goods  were  pledged, 
but  which  he  was  not  afterwards  compelled  to  pay. 

Here  the  judge  who  tried  the  cause  not  only  gave  to  the  defendant 
in  the  court  below  all  his  legal  rights,  but  protected  him  so  far  as 
any  equity  existed  as  between  the  factor  and  his  principals,  if  not 
much  further.  I  therefore  think  the  judgment  of  the  Supreme 
Court  should  be  affirmed. 

LoTT,  Senator.  ...  It  was  a  well-settled  rule  of  common  law, 
that  a  factor  had  no  authority  to  pledge  the  property  of  his  principal 
for  his  own  debt,  either  by  an  actual  deposit  thereof  with  the  pawnee, 
or  by  placing  in  his  hands  the  bill  of  lading  or  other  indicia  of 
ownership;  and  the  rule  appears  to  have  been  enforced  with  equal 
stringency  in  cases  where  advances  had  been  made  either  to  pay  the 
duties  chargeable  on  such  goods,  or  for  some  other  purpose  connected 
with  the  sale  thereof,  and  indeed  when  they  had  been  made  to  meet 
bills  drawn  by  the  principal  on  the  factor,  for  the  whole  or  part  of 
the  price  of  the  goods  pledged;  at  least,  if  the  pawnee  knew  or  had 
the  means  of  knowing  that  he  was  dealing  with  a  factor  and  not  with 
the  principal.  Eussell  of  Factors  and  Brokers,  116  to  122,  and  cases 
cited. 

The  expediency  of  this  rule  was  doubted  by  judges,  and  in  the 
mercantile  community  it  was  considered  a  matter  of  superior  justice 
and  wisdom  that  a  factor  or  commercial  agent  who  was  intrusted 
with  the  apparent  evidence  of  ownership  of  the  property  should  be 
deemed  the  true  owner  in  respect  to  third  persons  dealing  with  him 
fairly,  in  the  course  of  business,  as  purchasers  or  mortgagees,  and  in 
ignorance  of  his  real  character.  The  attention  of  Parliament  was 
finally  given  to  the  subject,  and  an  act  was  passed,  in  1823  (4  Geo. 
IV.,  c.  83),  modifying,  to  a  great  extent,  this  rule  of  the  common 
law.  But  not  proving  adequate  to  the  object  intended,  a  further 
act  was  passed  in  1825  (6  Geo.  IV.,  c.  94).  .  .  . 

A  statute  similar  in  its  general  objects  was  passed  by  our  legisla- 
ture in  1830.  (Laws  of  1830,  c.  179,  p.  203.)  .  .  .  There  is  notliing 
in  this  section  ^  which,  in  my  judgment,  countenances  the  idea  that 
a  factor  can  misapply  the  property  intrusted  to  his  possession,  and 
confer  on  a  party  who  is  privy  to  such  misapplication,  a  right  by 
purchase  or  pledge,  superior  to  the  rights  of  the  true  owner.  As  a 
general  rule,  the  rightful  owner  of  the  property  is  entitled  to  recover 

>  Section  3,  quoted  In  Chancellor  Walwobth's  opinion. 


CHAP.   XIV.]  LIABILITY    FOE   PROPERTY    DIVERTED.  511 

it  from  any  person,  in  whose  possession  it  may  be,  whether  ob- 
tained by  the  latter  under  color  of  purchase  or  otherwise.  This^ 
strictly  applied,  was  calculated  to  lead  to  embarrassments,  and  fetter 
commercial  dealings.  Possession  is  prima  facie  evidence  of  title; 
and  when  goods  are  intrusted  by  the  real  owner  with  an  agent  for 
the  purposes  of  sale  or  security,  it  is  consistent  with  justice  and 
equitable  principles  that  a  party  should  be  protected  who,  on  the 
faith  of  such  possession,  makes  a  purchase  of  the  goods  or  an  ad- 
vance or  loan  thereon.  It  was  doubtless  with  a  view  to  this  salutary 
object,  that  the  statutory  provision  above  recited  was  made.  It 
certainly  could  not  have  been  the  intention  of  the  legislature  to  divest 
the  actual  owner  of  his  property  in  cases  where  a  party  dealing 
with  an  agent,  in  fraud  of  the  rights  of  his  principal,  acquires  the 
possession.  Even  in  the  case  of  negotiable  paper,  where  possession  is 
evidence  of  ownership,  it  is  held  that  a  transfer,  in  derogation  of  the 
right  of  the  true  owner,  is  unavailable  unless  it  is  received  fairly  and 
bona  fide,  in  the  usual  course  of  business,  and  for  a  valuable  con- 
sideration. Stalker  v.  McDonald,  6  Hill,  93.  The  statute  was  de- 
signed to  facilitate  commercial  transactions,  by  protecting  persons 
trading  and  transacting  business  with  agents  in  the  fair  and 
ordinary  course  of  business,  but  not  to  legalize  a  fraudulent  violation 
of  duty.  .  .  . 

If  we  look  at  the  occasion  and  the  history  of  the  passage  of  the 
law  of  1830,  I  think  the  legislature  will  not  be  considered  chargeable 
with  the  injustice  of  declaring  that  an  agent,  by  a  breach  of  duty 
and  in  violation  of  good  faith,  can  confer  on  a  privy  to  the  fraud- 
ulent transaction  a  right  to  the  property  of  his  principal  para- 
mount to  that  of  the  owner  himself.  It  was  passed  on  the  petition  of 
sundry  merchants  and  others  in  the  city  of  New  York,  representing 
that  the  rule  of  the  commercial  law  invalidating  all  pledges  by 
factors  of  the  goods  or  property  of  their  principals,  "  even  where 
the  lender  advanced  liis  money  in  ignorance  that  the  goods  were  held 
on  consignment,"  was  in  their  opinion  unjust  and  impolitic ;  and  in 
urging  the  propriety  of  its  passage  they  expressly  disclaim  the  wish 
of  protecting  agents  in  the  misapplication  of  goods  intrusted  to 
them,  and  suggest  a  penal  remedy  to  prevent  it.  A  report  was  made 
favorable  to  the  general  objects  contemplated  by  the  petitioners, 
but  not,  in  my  opinion,  affording  any  pretext  of  right  in  the  factor 
to  deal  with  the  property  intrusted  to  him  as  his  own  absolutely. 
(See  Senate  Doc.  of  1830,  Vol.  1,  Nos.  46  and  55.)   ... 

Full  effect  and  operation  can  be  given  to  the  law  and  to  the  terms, 
"  on  the  faith  thereof,"  particularly  relied  on  by  the  plaintiff  in 
error,  by  protecting  those  who  bona  fide  contract  with  a  factor  or 
agent,  as  owner,  on  the  faith  of  the  possession  of  the  goods  intrusted 
to  him,  or  the  documentary  evidence  of  the  title  thereto  specified 
in  the  act.     Such  a  construction  will,  I  am  satisfied,  carry  out  all 


512  FOERDERER   V.    TRADESMEN'S   NAT.   BANK.       [CHAP.   XIV. 

the  objects  contemplated  by  the  lawmakers  at  the  time  of  its  passage. 
If  it  is  not  sufficiently  comprehensive,  it  is  the  province  of  the  legis- 
lature to  apply  the  remedy,  as  was  done  in  England  by  the  act  of 
1842  (5  &  6  Vict.  c.  39) ;  but  the  courts  cannot  extend  its 
provisions. 

Entertaining  these  views,  I  am  of  opinion  that  the  judgment  of 
the  supreme  court  should  be  affirmed. 

Johnson,  Senator,  dissented  on  the  ground  "  that  the  words 
*  upon  the  faith  thereof '  can  apply  to  no  other  antecedent  than 
'  merchandise.' "  * 


FOEEDEREE  v.   TRADESMEN'S  NAT.  BANK  OP 
NEW  YOEK. 

107  Fed.  (C.  C.  A.  2d  Ct.)  219.     1901. 

In  error  to  the  Circuit  Court  of  the  United  States  for  the  Southern 
District  of  New  York. 

Before  Wallace  and  Lacombe,  Circuit  Judges. 

Wallace^  Circuit  Judge.  Error  is  assigned  of  the  ruling  of  the 
trial  judge  in  directing  a  verdict  for  the  defendant. 

The  action  was  in  trover,  brought  to  recover  for  the  conversion 
of  certain  bales  of  wool;  and  the  facts  proved  upon  the  trial,  so  far 
as  they  are  material  for  present  purposes,  were  these:  The  plain- 
tiff made  an  agreement  with  the  Keen-Sutterle  Company,  a  corpora- 
tion doing  business  as  commission  merchants  at  Philadelphia,  by 
which  the  corporation  was  to  import  and  sell  wool  on  his  account 
for  a  stated  commission ;  the  wool  to  be  bought  abroad  upon  a  credit 
to  be  provided  at  London  by  the  plaintiff.  The  wool  in  controversy 
(277  bales)  arrived  at  Philadelphia  in  September,  1895,  and  was  de- 
livered into  the  possession  of  the  Keen-Sutterle  Company;  the  bills 
of  lading  and  invoices  for  the  same  having  been  indorsed  to  that 
corporation.  Shortly  afterwards  the  Keen-Sutterle  Company  con- 
signed the  wool  for  sale  to  Jagode  &  Co.,  commission  merchants 
doing  business  at  Philadelphia;  the  latter  making  advancess  to  the 
Keen-Sutterle  Company  on  the  wool  at  the  time  it  was  delivered 
into  their  possession  for  about  75  or  80  per  cent,  of  its  value.  In 
taking  the  consignment  and  making  the  advances,  Jagode  &  Co. 
acted  in  good  faith,  and  without  any  notice,  by  document  or  other- 
wise, that  the  Keen-Sutterle  Company  was  not  the  real  owner  of 
the  wool.  Subsequently  the  Keen-Sutterle  Company  failed,  and 
thereafter  Jagode  &  Co.  sold  the  wool  and  shipped  it  to  purchasers 

•  The  view  of  Johnson,  Senator,  was  approved  by  the  Supreme  Court  of  Wiscon- 
sin In  Price  v.  The  Wisconsin  Marine  and  Fire  Ins.  Co.,  43  WIS.  267  (1877). 


CHAP.   XIV.]  LIABILITY   FOE   PROPERTY   DIVERTED.  51-3 

in  Massachusetts.  While  the  wool  was  in  transit  it  was  seized  by 
a  writ  of  replevin  in  an  action  brought  by  the  defendant,  the  Trades- 
men's National  Bank  of  New  York ;  the  latter  claiming  title  thereto 
under  certain  warehouse  receipts.  Jagode  &  Co.  interposed  an  an- 
swer in  the  action  setting  up  their  title,  but  before  the  action  came 
to  trial  the  bank  ascertained  that  its  receipts  did  not  cover  the 
bales  in  controversy,  and  thereupon  entered  into  a  stipulation  with 
Jagode  &  Co.  that  judgment  be  entered  in  the  action  for  the  return 
of  the  goods  described  in  the  writ  of  replevin,  and  in  lieu  thereof 
for  the  payment  to  Jagode  &  Co.  of  the  value  of  the  wool,  with 
damages  for  detention.  Judgment  was  accordingly  entered  to  that 
effect  by  the  court.  The  Tradesmen's  National  Bank  elected  to  re- 
tain the  wool,  and  paid  to  Jagode  &  Co.  the  sum  of  $25,105,  —  the 
stipulated  value  and  damages.  Thereafter  the  bank  sold  the  wool, 
and  the  present  action  was  brought. 

Were  it  not  for  the  Factor's  Act  of  the  state  of  Pennsylvania,  it 
would  be  entirely  clear  that  neither  Jagode  &  Co.  nor  the  defendant 
could  be  protected  under  any  title  derived  from  the  Keen-Sutterle 
Company.  A  factor  is  an  agent  for  the  owner  of  the  goods  con- 
signed, and  must  observe  the  instructions  of  his  principal  in  respect 
to  them,  whether  express  or  implied,  and  cannot  deal  with  the  prop- 
erty as  his  own.  In  the  absence  of  instructions  to  the  contrary,  he 
is  empowered  to  sell  the  goods  of  his  principal  according  to  the 
usage  of  the  trade.  Upon  a  sale  made  by  the  factor  conformably 
to  his  authority,  the  principal  is  devested  of  his  title  in  the  goods, 
and  the  title  passes  to  the  purchaser.  He  has  a  lien  upon  the  goods 
while  they  are  in  his  possession  for  his  advances  and  conmiissions, 
and  upon  the  proceeds  of  the  sale.  He  has  no  authority  to  use  or 
pledge  them  for  his  own  benefit,  except  for  the  purpose  of  reim- 
bursing himself  when  the  principal,  after  reasonable  notice  and 
demand,  fails  to  repay  his  advances.  He  cannot  ordinarily  bind  his 
principal  by  a  disposition  of  the  goods  not  made  in  the  usual  course 
of  business.  Bank  v.  Heilbronner,  108  N.  Y.  439,  15  N.  E.  701 ; 
Easton  v.  Clark,  35  N.  Y.  225;  Eomeo  v.  Martucci  (Conn.)  45 
Atl.  1.  He  must  sell  in  the  market  where  he  transacts  business.  Cat- 
lin  V.  Bell,  4  Camp.  183 ;  Marr  v.  Barrett,  41  Me.  403.  He  cannot 
sell  by  way  of  barter.  Guerreiro  v.  Peile,  3  Barn.  &  Aid.  616- 
618;  Biggs  v.  Evans  [1894]  1  Q.  B.  Div.  88;  Machine  Co.  v.  Heller, 
44  Wis.  265;  Potter  v.  Dennison,  10  111.  590.  If  he  makes  an  un- 
authorized disposition  of  the  goods,  his  lien  is  lost;  and  such  a  dis- 
position of  them  does  not  transfer  any  right  as  against  the  prin- 
cipal, even  to  the  extent  of  the  lien.  McCombie  v.  Davies,  7  East, 
5;  Graham  v.  Dyster,  6  Maule  &  S.  1.  As  Chancellor  Kent  says: 
"  The  principal  is  not  even  obliged  to  tender  to  the  pawnee  the  bal- 
ance due  from  the  principal  to  the  factor;  for  the  lien  which  the 
factor  might  have  had  for  such  balance  is  personal,  and  cannot  be 


514  FOEBDEBEB  V.   TRADESMEN'S   NAT.  BANK.       [CHAP.   XIV. 

transferred  by  his  tortious  act  in  pledging  the  goods  for  his  own 
gain."    2  Kent,  Comm.  (12th  ed.)  626. 

As  persons  dealing  with  an  agent  are  bound  to  take  notice  of 
the  extent  of  his  powers,  a  transfer  of  property  by  a  factor  not  au- 
thorized by  the  powers  delegated  to  him  by  the  principal  creates 
no  right  in  the  person  dealing  with  him,  as  against  the  priincipal. 
It  follows  that  innocent  purchasers  or  pledgees,  who,  relying  upon 
the  indicia  of  title  afforded  by  his  possession  of  the  goods,  have 
dealt  with  the  factor,  supposing  him  to  be  the  actual  owner,  acquire 
no  title  to  the  property  where  the  transfer  is  unauthorized  by  the 
express  or  implied  terms  of  the  principal's  instructions.  Applying 
these  rules  to  the  present  case,  inasmuch  as  the  Keen-Sutterie  Com- 
pany, the  factor  of  the  plaintiff,  transcended  its  authority  in  con- 
signing the  wool  upon  advances  to  Jagode  &  Co.,  the  latter,  except 
for  the  provisions  of  the  factor's  act,  would  have  acquired  no  title 
to  the  property  as  against  the  real  owner,  the  plaintiff;  and,  as 
Jagode  &  Co.  could  not  transfer  a  better  title  than  they  had  them- 
selves, the  defendant  could  not  have  acquired  any  title  to  the  wool 
through  Jagode  &  Co.  as  against  the  plaintiff. 

The  Factor's  Act  of  Pennsylvania  is  designed  to  remedy  the  hard- 
ship of  the  common  law  whereby  "  factors  authorized  to  sell  the 
goods  of  their  principal,  and  who  are  held  out  to  the  world  as 
the  owners  thereof,  have  no  power  to  pledge  the  goods  in  their  pos- 
session for  advances  made  by  persons  who  have  reason  to  believe 
that  they  are  the  actual  owners."  See  Mackay  v.  Dillinger,  73  Pa. 
90.  Unlike  cognate  legislation  in  some  of  the  other  states,  the  act 
does  not  purport  to  give  validity  to  all  contracts  made  by  a  factor 
in  respect  to  the  disposition  of  the  goods  with  innocent  third  per- 
sons who  advance  money  therefor,  but  it  is  limited  to  the  protection 
of  third  persons  who  advance  money  or  negotiable  instruments  upon 
a  deposit  or  pledge  of  the  goods  by  the  factor.  The  third  section 
of  the  act  provides  as  follows : 

"  Whenever  a  consignee  or  factor,  having  possession  of  merchandise,  with 
authority  to  sell  the  same,  .  .  .  shall  dispose  of  or  pledge  such  merchandise 
or  any  part  thereof,  with  any  person  as  a  security  for  any  money  advanced 
or  negotiable  instrument  given  by  him  upon  the  faith  thereof,  such  other  per- 
son shall  acquire  by  virtue  of  such  contract  the  same  interest  in  and  authority 
over  the  said  merchandise  as  he  would  have  acquired  thereby  if  such  con- 
signee or  factor  had  been  the  actual  owner  thereof:  provided,  that  such  person 
shall  not  have  notice  by  document  or  otherwise,  before  the  time  of  such  advance 
or  receipt,  that  the  holder  of  such  merchandise  or  document  is  not  the  actual 
owner  of  such  merchandise."    P.  L.  1833-34,  p.  376. 

This  statute,  being  in  derogation  of  the  common  law,  is  to  be 
strictly  construed.  Shaw  v.  Kailroad  Co.,  101  U.  S.  557,  25  L.  Ed. 
892 ;  Machine  Co.  v.  Heller,  supra;  Bank  v.  Shaw,  61  N".  Y.  283. 

But,  upon  the  most  literal  construction,  the  terms  of  the  section 


CHAP.   XIV.]  LIABILITY   FOR  PROPERTY   DIVERTED.  515 

protect  a  factor  who  has  received  from  another  factor  a  consign- 
ment of  merchandise  in  the  possession  of  the  latter,  and  made  ad- 
vances thereon,  without  notice  by  document  or  otherwise  that  the 
consigning  factor  was  not  the  actual  owner.  The  factor  thus  re- 
ceiving a  consignment  and  making  advances  thereon  acquires,  by 
the  explicit  language  of  the  section,  the  same  "  interest  in  and  au- 
thority over"  the  merchandise  as  though  the  consigning  factor  were 
at  the  time  its  actual  owner.  Until  his  lien  is  satisfied  he  has  the 
same  right  to  sell  or  dispose  of  the  merchandise  that  he  would 
have  had  if  it  had  been  consigned  to  him  by  the  actual  owner,  and 
any  sale  or  transfer  of  it  made  by  him  conformably  with  a  factor's 
duty  to  his  principal  will  devest  the  title  of  the  real  owner.  Unless 
he  can  sell  the  merchandise,  his  lien  would  be  of  no  value,  and  the 
statute  would  be  merely  an  illusor}'^  protection  to  him.  The  terms 
of  the  section  apply  to  and  control  the  transaction  between  the 
Keen-Sutterle  Company  and  Jagode  &  Co.  The  Keen-Sutterle  Com- 
pany, being  in  possession  of  the  wool,  consigned  it  to  Jagode  &  Co., 
and  the  latter  made  the  advances  without  notice  that  the  Keen- 
Sutterle  Company  was  not  the  actual  owner.  Consequently  Jagode 
&  Co.,  by  force  of  the  statute,  became  entitled  to  deal  with  the 
wool  exactly  as  though  the  Keen-Sutterle  Company  had  been  the 
owner,  and  had  consigned  it  to  them  as  its  own  factors. 

We  are  of  the  opinion  that  the  defendant  acquired  a  valid  title 
to  the  wool  under  the  arrangement  made  by  Jagode  &  Co.  in  the 
replevin  suit.  Jagode  &  Co.  sold  the  wool,  as  factors,  in  the  ordi- 
nary course  of  business,  to  a  Massachusetts  purchaser.  If  the  goods 
had  been  delivered  to  this  purchaser,  the  title  of  the  Keen-Sutterle 
Company,  and  consequently  the  plaintiff's  title,  would  have  been  com- 
pletely devested.  The  sale,  being  authorized  by  the  implied  powers 
of  Jagode  &  Co.  as  factors,  would  have  passed  the  title  of  their  con- 
signor as  that  of  "  the  actual  owner "  of  the  wool ;  and  thereafter 
all  right  of  the  plaintiff  in  the  wool  would  have  been  gone,  and  in 
lieu  thereof  he  would  have  been  relegated  to  his  claim  upon  Jagode 
&  Co.  for  the  price,  less  their  advances  to  the  Keen-Sutterle  Com- 
pany and  their  commissions.  Before  the  wool  was  actually  delivered 
to  the  purchaser  it  was  taken  from  the  possession  of  Jagode  &  Co., 
in  Massachusetts,  by  the  proceedings  in  the  replevin  action  brought 
by  the  present  defendant.  The  law  authorized  the  bringing  of  such 
an  action,  and  compelled  Jagode  &  Co.  to  accept  the  bond  given  at 
the  institution  of  the  action  in  lieu  of  the  possession  of  the  goods. 
According  to  the  rule  which  obtains  in  some  jurisdictions,  the  bond 
becomes  a  substitute  for  the  property,  and  the  plaintiff  in  such  an 
action  acquires  a  title  to  the  property  in  dispute,  which  he  may 
dispose  of  before  the  decision  of  the  cause.  Stewart  v.  Wolf  (Pa. 
Sup.)  7  Atl.  165;  Fisher  v.  Whoolery,  25  Pa.  197.  This  rule  does 
not  obtain  in  Meissachusetts.    Lockwood  v.  Perry,  9  Mete.  (Mass.) 


516  BIGGS   V.   EVANS.  [CHAP.    XIV. 

440;  White  v.  DoUiver,  113  Mass.  400.  The  judgment  in  such  an 
action  is  conclusive  between  the  parties,  both  as  to  the  value  and 
the  ownership  of  the  property,  if  the  ownership  is  in  issue.  Leonard 
V.  Whitney,  109  Mass.  267.  WTien  in  such  an  action  judgment  is 
rendered  for  the  defendant  for  the  return  of  the  property,  or  in  the 
alternative  a  recovery  of  its  value,  the  payment  of  the  recovery  by 
the  defendant  operates  to  transfer  to  him  all  the  right  and  interest 
of  the  plaintiff  in  the  property.  Hunt  v.  Bennett,  4  G.  Greene,  512 ; 
Pickett  V.  Bridges,  10  Humph.  171 ;  Brinsmead  v.  Harrison,  L.  R. 
6  C.  P.  584 ;  Thayer  v.  Manley,  73  N.  Y.  305 ;  Lovejoy  v.  Murray, 
3  Wall.  1,  18  L.  Ed.  129 ;  Howard  v.  Smith,  12  Pick.  202 ;  Holmes  v. 
Wilson,  10  Adol.  &  E.  503.  In  defending  the  replevin  action  and 
consenting  to  the  stipulation  made  therein,  we  do  not  doubt  that 
Jagode  &  Co.  were  acting  within  the  scope  of  their  implied  au- 
thority as  factors.  The  goods,  without  fault  on  their  part,  had 
been  transferred  from  the  market  where  they  were  originally  to  be 
sold  to  another  state.  They  had  a  large  interest  in  them,  growing 
out  of  their  advances,  —  an  interest  larger  than  that  of  their  con- 
signor. The  consignor  had  failed.  To  have  brought  the  wool  back 
to  Philadelphia  and  resold  it  there  would  have  entailed  a  consid- 
erable expense,  and  they  had  an  opportunity  to  obtain  from  the  de- 
fendant its  full  value  where  it  was.  Having  made  these  large  ad- 
vances, they  were  clothed  with  the  right  to  sell  the  wool,  in  the 
exercise  of  a  sound  discretion,  not  inconsistent  with  their  duties  to 
their  principal.  Under  the  circumstances,  the  arrangement  made . 
with  the  defendant,  and  which  was,  in  substance,  a  sale  of  the  wool, 
was  one  for  the  best  interests  of  their  consignor,  and  one,  therefore, 
which  they  had  a  right  to  make.  Their  consignor  being  bound  by 
the  arrangement,  the  plaintiff  has  no  remedy  against  the  defend- 
ant, because,  as  between  them  and  their  consignor,  the  latter  was, 
pursuant  to  the  terms  of  the  Factor's  Act,  the  owner  of  the  wool, 
and  the  defendant  consequently  acquired  the  owner's  title  by  the 
purchase. 

We  conclude  that  the  trial  judge  properly  directed  a  verdict  for 
the  defendant,  and  that  the  judgment  should  be  affirmed. 


BIGGS  V.  EVANS. 
[1894]  1  Q.  B.  88. 

Action"  to  recover  possession  of  personal  property,  intrusted  to 
one  Geddes,  and  by  Geddes  sold  to  defendant;  tried  by  Wills,  J., 
without  a  jury. 

Wills,  J.,  delivered  judgment  as  follows :  — 


CHAP.    XIV.]  LIABILITY    FOR   PROPERTY   DIVERTED.  517 

The  plaintiff  was  the  owner  of  a  valuable  table-top  made  of  what 
is  called  opal  matrix,  an  exceptional  article,  but  of  a  class  in  which 
jewellers  and  dealers  in  gems  might  be  expected  to  deal. 

In  the  year  1886  he  sent  it  to  the  business  premises  of  a  person 
named  Geddes,  who  was  a  dealer  in  jewels  and  gems,  and  who  also, 
as  a  part  of  his  business,  and  as  a  known  part  of  his  business,  sold 
such  things  for  other  people  in  his  own  name,  and  having  them  in 
his  possession.    The  following  letter  gives  the  terms  of  the  deposit :  — 

"April  30,  1886. 
"  I  will  intrust  you  with  the  sale  of  my  opal  table  upon  the  following  con- 
ditions. That  the  table  shall  not  be  sold  to  any  person  nor  at  any  price  without 
my  authorization  is  first  obtained  that  such  sale  shall  be  effected.  That  the 
check  handed  to  you  in  payment  for  the  table  shall  be  paid  over  to  me  intact 
for  me  to  pay  into  my  bankers,  and  that  I  shall  pay  for  commission  on  the  sale 
of  the  table  one-third  of  the  balance  which  remains  after  deducting  cost  of 
stone  mounting  and  all  expenses  incurred  by  me  in  connection  with  the  same." 

Geddes,  in  the  year  1888,  sold  the  table  out  and  out  to  the  defend- 
ant for  £200,  which  was  satisfied  as  follows:  Geddes  asked  the  de- 
fendant to  pay  £170  for  him  to  Streeter,  a  West  End  jeweller,  in 
satisfaction  of  a  judgment  which  Streeter  had  obtained  against  him, 
and  to  pay  him  (Geddes)  £30  in  cash.  The  defendant  did  not  pay 
Streeter  £170,  but  gave  him  a  diamond  valued  between  him  and 
Streeter  at  £120,  and  paid  him  £50  in  cash. 

Geddes  shortly  afterwards  became  bankrupt  and  disappeared. 
The  table-top  at  the  time  of  action  brought  was  in  the  possession  of 
Streeter,  who  was  holding  it  for  the  defendant.  The  plaintiff  claims 
to  recover  the  table-top  from  the  defendant.  The  defendant  resists 
the  claim  on  two  grounds:  First,  he  says  that  at  common  law  the 
plaintiff  is  estopped  from  denying  his  title.  Secondly,  that  he  is 
protected  by  the  Factors  Acts,  from  which,  of  course,  the  Act  of  1889 
must  be  excluded,  as  the  transaction  took  place  before  it  was  passed.^ 

The  claim  of  the  defendant  at  common  law  is  put  thus:  It  is 
said  that  the  plaintiff  enabled  Geddes  to  sell  the  table-top  as  his  own, 
and  that  his  doing  so  was  within  the  scope  of  his  authority,  as  it 
would  be  understood  by  persons  who  dealt  with  him,  and  that,  as  he 
had  put  it  in  the  power  of  Geddes  to  commit  the  fraud,  his  must  be 
the  loss. 

I  think,  however,  that  a  fallacy  underlies  the  expression  that  he 
enabled  Geddes  to  commit  the  fraud.  In  one  sense,  and  one  only,  did 
he  do  so.  He  gave  him  the  corporal  possession  of  the  table-top,  and 
it  was  that  possession  which  enabled  Geddes  to  sell  it  as  his  own,  or 
by  way  of  a  transaction  within  the  scope  of  his  apparent  authority, 

'  52  &  53  Vict.  c.  45,  which  by  section  14,  and  the  schedule  repeals  the  earlier 
Factors  Acts,  preserving  any  right  acquired  or  liability  incurred  before  the  com- 
mencement of  the  Act.  The  provisions  corresponding  to  6  Geo.  4,  c.  94,  s.  4,  are  con- 
tained in  section  1,  sub-section  1,  and  section  2,  sub-section  1,  of  the  Act  now  in 
force. 


518  BIGGS   V.    EVANS.  [CHAP.    XIV. 

as  a  person  carrying  on  a  business  in  which  such  sales  are  habitually 
effected.  But  it  is  quite  clear  that  it  requires  more  to  found  the  argu- 
ment in  question.  In  one  sense  every  person  who  intrusts  an  article 
to  any  person  who  deals  in  second-hand  articles  of  that  description 
enables  him,  if  so  disposed,  to  commit  a  fraud  by  selling  it  as  his  own. 
A  man  who  lends  a  book  to  a  second-hand  bookseller  puts  it  into  his 
power,  in  the  same  sense,  to  sell  it  as  his  own.  A  man  who  intrusts 
goods  for  safe  custody  to  a  wharfinger,  who  also  deals  in  his  own 
goods,  or  in  other  people's  goods  intrusted  to  him  for  sale,  in  such  a 
sense  enables  him  to  commit  a  fraud  by  selling  them  to  a  customer. 
But  such  a  transaction  clearly  could  not  give  a  title  to  a  purchaser  as 
against  the  owner.  The  true  test  is,  I  take  it,  whether  the  authority 
given  in  fact  is  of  such  a  nature  as  to  cover  a  right  to  deal  with  the 
article  at  all.  If  it  does,  and  the  dealing  effected  is  of  the  same  nature 
as  the  dealing  contemplated  by  the  authority,  and  the  agent  carries 
on  a  business  in  which  he  ordinarily  effects  for  other  people  such  dis- 
positions as  he  does  effect,  what  he  has  done  is  within  the  general 
authority  conferred,  and  any  limitations  imposed  as  to  the  terms  on 
which,  or  manner  in  which,  he  is  to  sell  are  matters  which  may  give 
a  right  of  action  by  the  principal,  but  cannot  affect  the  person  who 
contracts  with  the  agent.  It  is  within  the  scope  of  the  authority  that 
the  agent  should  sell  the  goods  on  some  terms,  and  it  is  not  usual  in 
the  trade  to  inquire  into  the  limits  or  conditions  of  an  authority  of 
that  kind;  and  therefore  the  principal  is  supposed,  as  respects  other 
people,  to  have  clothed  the  agent  with  the  usual  authority.  The 
foundation,  however,  of  the  whole  thing  is  that  the  agent  should  be 
authorized  to  enter  into  some  such  transaction.  If  the  principal 
has  instrusted  the  goods  to  the  agent  for  some  other  purposes,  the 
agent  is  acting  outside  his  authority  in  selling  at  all,  and  then 
the  principal,  whose  goods  have  been  disposed  of  without  any 
authority  at  all  so  to  do,  is  entitled  to  recover  them  in  spite  of  the 
disposition. 

Now  in  the  present  case,  the  letter,  taken  as  a  whole,  shows  that 
the  table-top  never  was  intrusted  to  Geddes  to  sell.  He  was  for- 
bidden in  express  terms  to  sell  without  further  authority.  He  was 
not  to  sell  the  table-top,  but  to  keep  it  safely  for  the  plaintiff  until 
a  further  authority  was  given;  and  I  think  he  sold,  not  violating 
instructions  as  to  the  terms  on  which  he  should  effect  a  sale,  but  in 
spite  of  a  prohibition  to  sell  at  all  till  some  further  authority  should 
be  given.  At  common  law,  therefore,  I  think  the  plaintiff  is  enti- 
tled to  succeed. 

Do  the  Factors  Acts  protect  the  defendant?  I  think  not.  I 
think  it  is  an  essential  condition  of  the  validity  of  a  sale  protected 
by  them  that  the  goods  should  have  been  intrusted  to  the  agent  for 
sale.  I  think  the  Factors  Acts  would  apply,  so  far  as  relates  to  the 
business  which  Geddes  was  carrying  on,  the  nature  of  the  article 


CHAP.   XIV.]  LIABILITY   FOR   COLLUSIVE   FRAUD.  519 

dealt  in,  and  what  was  usual  in  such  a  trade.  But  the  defect  that 
the  article  never  was  intrusted  to  him  for  sale  is  fatal. 

I  think  there  is  another  difficulty.  In  order  to  validate  payment 
to  the  agent  under  6  Geo.  IV.,  c.  94,  s.  4,  it  must  be  made  in  the 
ordinary  course  of  business,  that  is,  by  cash  or  check  or  bill,  as  the 
case  may  be.  I  do  not  think  that  buying  up  a  judgment  from  some 
one  else,  partly  by  delivery  of  a  diamond  of  the  defendant's  own,  can 
be  considered  as  payment  in  the  ordinary  course  within  the  section. 
And  there  is  good  reason  for  it.  If  the  agent  gets  cash,  he  may  be 
able  to  hand  it  to  his  principal;  but  if  he  does  not  get  cash,  and 
there  is  only  a  transaction  of  this  kind,  he  cannot,  if  impecunious, 
pay  the  principal ;  it  is  out  of  his  power  to  do  so. 

I  am  of  opinion,  therefore,  that  judgment  must  be  entered  for 
the  plaintiff,  with  costs.  Judgment  for  the  plaintiff. 


4.     Liability  for  Collusive  Fraud. 
MAYOE,   ETC.,   OF   SALFOED   v.   LEVER. 

[1891]  1  Q.  B.  (C.  A.)  168. 

Action  for  damages  for  fraud,  or,  in  the  alternative,  for  money 
had  and  received.     Judgment  for  plaintiffs. 

Defendant  bribed  plaintiffs'  purchasing  agent  to  accept  defendant's 
offer  to  supply  coal  to  plaintiffs.  Upon  discovering  the  fraud  plain- 
tiffs stayed  action  against  the  agent  upon  his  agreement  to  furnish 
evidence  against  defendant  and  others,  to  pay  the  costs  of  the  action 
against  them,  and  to  guarantee  an  aggregate  recovery  of  £10,000, 
for  which  he  gave  security. 

Lord  Esher,  M.  R.  The  corporation  of  Salford  have  brought 
this  action  against  the  defendant,  who  is  a  coal  merchant,  and  it  ia 
an  action  founded  on  fraud.  What  is  the  fraud  which  the  defendant 
had  committed?  He  had  coals  to  sell,  and  he  was  obliged  to  make 
a  bargain  with  the  corporation  through  their  agent,  a  man  who, 
no  doubt,  would  be  known  in  Salford  as  having  the  power  to  make 
contracts  for  the  corporation,  and  who,  consequently,  would  be  looked 
to  by  traders.  The  defendant  knew  that  this  man  was  the  agent 
of  the  corporation,  and  that  it  was  his  duty  to  buy  coals  for  them  at 
the  price  at  which  the  defendant  or  some  other  trader  was  willing 
to  sell  them.  The  defendant  was  at  liberty  to  sell  the  coals  at  any 
price  he  could  get  for  them,  not  necessarily  at  market  price,  but  at 
the  best  price  which  he  could  obtain.  He  was  bound,  however,  to 
act  honestly.    He  offered  this  man  Hunter  to  sell  him  coal  at  a  price 


520  MAYOE,  ETC.,  OF  SALFOBD  V.   LEVER.    [CHAP.  XIV. 

"which  would  give  him  such  a  profit  as  he  desired.  But  then  Hunter 
tempted  him  by  saying,  "  You  want  to  sell  your  coals  at  a  price 
which  will  give  you  a  profit.  I  have  the  power  of  buying  coals  from 
you  or  from  anybody  else,  and  I  will  not  buy  them  from  you  at  the 
price  at  which  you  are  willing  to  sell  them,  unless  you  will  help 
me  to  cheat  the  corporation  out  of  another  shilling  a  ton.  You  are 
to  have  your  price;  but  you  are  to  add  to  it  in  the  bills  which  you 
send  to  the  corporation  another  shilling  per  ton,  making  the  real 
price  apparently  a  shilling  per  ton  more;  but  that  shilling  is  to  be 
mine,  —  you  are  to  give  it  to  me."  They  call  this  a  commission, 
a  term  very  well  known,  at  all  events  in  the  North  of  England;  and 
commissions  sometimes  cover  a  multitude  of  sins.  In  the  present 
case  it  was  meant  to  cover  a  fraud.  The  fraud  was  this,  that  the 
defendant  allowed  and  assisted  the  agent  of  the  corporation  to  put 
down  a  false  figure  as  the  price  of  the  coals  in  order  to  cheat  the 
corporation  out  of  a  shilling  a  ton,  which  was  to  be  paid  to  their 
own  agent ;  and  the  way  in  which  it  was  done  was  this :  the  defendant 
sent  in  a  bill  to  the  corporation  for  the  whole  price  thus  increased. 
He  got  the  advanced  price  into  his  hands,  and  as  he  got  it  by  fraud 
he  is  bound  to  pay  it  back,  unless  something  has  happened  to  oust 
the  right  of  the  corporation.  The  damage  to  the  corporation  is 
clearly  the  one  shilling  per  ton,  out  of  which  they  have  been  cheated, 
neither  more  nor  less.  The  form  of  the  action,  on  which  some  stress 
has  been  laid  in  the  argument,  is  immaterial.  Unless  something  has 
happened  to  oust  the  right  of  the  corporation,  they  are  entitled  to 
sue  the  defendant  for  the  one  shilling  a  ton  in  one  form  of  action 
or  another,  although  he  has  parted  with  the  money,  and  has  handed 
it  over  to  his  confederate  Hunter,  because  it  was  once  in  his  hands, 
and  he  is  liable  for  the  fraud  to  which  he  was  thus  a  party. 

But  the  defendant  says  that  something  has  happened  which  pre- 
vents the  corporation  from  enforcing  this  right,  and  the  first  ground 
which  was  taken  was  this:  that  this  money  which  came  into  his 
hands  passed  into  the  hands  of  Hunter,  the  agent  of  the  corporation, 
and  they  have  recovered  it,  or  part  of  it,  from  Hunter,  and  therefore 
cannot  recover  it  from  the  defendant.  This  defence  was  advanced 
independently  of,  and  without  reference  to,  the  agreement  between 
the  corporation  and  Hunter.  On  what  ground  have  the  corporation 
recovered  the  money  from  Hunter?  Hunter,  their  agent,  had  re- 
ceived money  from  the  defendant,  for  the  performance  of  a  duty 
which  he  was  bound  to'perform  without  any  such  payment.  Nothing 
could  in  law  be  more  fraudulent,  dangerous,  or  disgraceful,  and  there- 
fore the  law  has  struck  at  such  conduct  in  this  way.  It  says  that, 
if  an  agent  takes  a  bribe  from  a  third  person,  whether  he  calls  it 
a  commission  or  by  any  other  name,  for  the  performance  of  a  duty 
which  he  is  bound  to  perform  for  his  principal,  he  must  give  up  to 
his  principal  whatever  he  has  by  reason  of  tlie  fraud  received  be- 


CHAP.   XIV.]  LIABILITY    FOE   COLLUSIVE   FRAUD.  521 

yond  his  due.  It  is  a  separate  and  distinct  fraud  of  the  agent.  He 
might  have  received  the  money  without  any  fraud  of  the  person  who 
was  dealing  with  him.  Suppose  that  person  thought  that  the  agent 
was  entitled  to  a  commission,  —  he  would  not  be  fraudulent ;  but  the 
agent  would  be,  and  it  is  because  of  his  separate  and  distinct  fraud 
that  the  law  says  he  must  give  up  the  money  to  his  principal.  It 
signifies  not  what  it  may  be  called,  whether  damages  or  money  had 
and  received,  the  foundation  of  the  claim  of  the  principal  is,  that 
there  is  a  separate  and  distinct  fraud  by  his  agent  upon  him,  and 
therefore  he  is  entitled  to  recover  from  the  agent  the  sum  which 
he  has  received.  But  does  this  prevent  the  principal  from  suing  the 
third  person  also,  if  he  had  been  fraudulent,  because  of  his  fraud? 
It  has  been  settled  that,  if  the  principal  brings  an  action  against 
the  tiiird  person  first,  he  cannot  set  up  the  defence  that  the  action 
cannot  be  maintained  against  him  because  the  thing  was  done 
through  the  agent,  and  the  principal  was  entitled  to  sue  the  agent. 
What  difference  can  it  make  that  the  principal  sues  the  third  party 
secondly  instead  of  first?  The  agent  has  been  guilty  of  two  distinct 
and  independent  frauds,  —  the  one  in  his  character  of  agent,  the 
other  by  reason  of  his  conspiracy  with  the  third  person  with  whom 
he  has  been  dealing.  Whether  the  action  by  the  principal  against 
the  third  person  was  the  first  or  the  second  must  be  wholly  imma- 
terial. The  third  person  was  bound  to  pay  back  the  extra  price  which 
he  had  received,  and  he  could  not  absolve  himself  or  diminish  the 
damages  by  reason  of  the  principal  having  recovered  from  the  agent 
the  bribe  which  he  had  received. 

But  then  the  defendant  says  —  and  this  is  his  second  ground  — 
that,  even  if  this  be  so,  the  corporation  have  entered  into  an  agree- 
ment with  their  agent.  Hunter,  which  prevents  them  from  suing  the 
defendant  in  respect  of  the  combined  fraud  of  Hunter  and  himself. 
There  is  a  well  settled  rule  that,  if  there  are  two  joint  tort-feasors, 
and  the  third  person  to  whom  the  wrong  has  been  done  releases  one 
of  the  two,  he  cannot  afterwards  sue  the  other.  That  is  a  well- 
known  rule.  Whether  the  rule  goes  further,  and  extends  to  an 
accord  and  satisfaction  with  one  tort-feasor,  it  is  immaterial  now 
to  consider.  Let  us  see  what  has  been  done.  It  is  said  that  the  cor- 
poration have  entered  into  an  agreement  with  Hunter.  Though  the 
corporation  will  not  take  the  objection  that  the  agreement  is  not 
under  seal,  I  am  not  sure  that  the  court  ought  not  to  take  it,  seeing 
that  the  defendant  has  been  guilty  of  a  fraud.  There  is  in  fact  no 
agreement  at  all  which  is  binding  on  the  corporation,  because  the 
alleged  agreement  does  not  bear  their  seal.  First,  then,  there  is  no 
agreement;  and,  secondly,  even  supposing  there  is  an  agreement  such 
as  the  defendant  alleges,  namely,  that  the  corporation  undertook 
to  bring  actions  in  the  first  instance  against  the  third  parties,  at  his 
request  and  at  his  expense,  to  recover  the  extra  price  which  they  had 


622  MAYOR,  ETC.,  OP  SALFORD  V.   LEVER.     [CHAP.  XIV. 

received,  that  would  not,  so  far  as  I  can  see,  be  a  compromise  of 
a  doubtful  claim.  It  was  an  absolute  agreement  entered  into  by  the 
officers  of  the  corporation,  and,  if  it  were  binding  on  the  corporation, 
they  bound  themselves  to  bring  the  actions  at  the  request  of  Hunter, 
and  thus  lost  their  independence  as  to  whether  those  actions  should 
proceed  or  not.  If  the  actions  failed,  the  corporation  would  be 
primarily  liable  for  the  costs  to  the  persons  against  whom  they  were 
brought.  It  was  true  they  were  to  get  the  costs  from  Hunter;  but 
they  would  be  primarily  liable.  They  had  given  up  their  independ- 
ence, and  had  bound  themselves  to  bring  the  actions,  whether  they 
were  likely  to  be  successful  or  not.  They  had  bound  the  rate- 
payers to  pay  the  costs,  in  the  first  instance,  if  the  actions  failed, 
and  to  take  the  chance  of  Hunter  paying  them,  and,  supposing 
Hunter's  securities  proved  insufficient,  the  rate-payers  would  lose 
these  costs.  Under  these  circumstances,  speaking  for  myself  alone, 
I  am  of  opinion  that  the  agreement  was  wholly  ultra  vires  the 
corporation.  They  had  no  mandate  from  the  rate-payers  to  agree 
to  it. 

But,  suppose  the  difficulty  to  be  got  over,  what  was  the  effect  of 
the  agreement?  Was  it  a  release  of  Hunter  in  respect  of  the  com- 
bined fraud?  Certainly  it  was  not  a  release.  It  did  not  purport 
to  be  that.  Moreover,  it  was  not  under  seal,  and  it  cannot  therefore 
be  dealt  with  as  a  release.  And,  when  the  terms  of  the  agreement 
are  looked  at,  it  was  clearly  not  a  release  of  Hunter.  It  is  per- 
fectly true,  as  Mr.  Henn  Collins  has  pointed  out,  that  the  agreement 
merely  suspended  the  action  of  the  corporation  against  Hunter,  and 
left  it  open  to  them  to  sue  him  afterwards,  should  circumstances 
arise  in  which  they  might  think  it  right  to  do  so.  It  was,  in  fact, 
nothing  more  than  a  postponement  of  their  right  of  action,  and  that 
of  itself  cannot  prevent  them  from  suing  Lever.  Therefore,  upon 
almost  every  ground  upon  which  the  case  can  be  looked  at,  there  is 
no  defence  to  this  action,  and  the  defendant  is  liable.  I  know  the 
result  of  it  all  may  be  this,  —  that  the  corporation  will  recover  their 
money  from  the  defendant,  and  from  other  traders  in  a  similar  posi- 
tion against  whom  they  may  proceed,  and  that  Hunter  will  have  the 
benefit  of  it.  Certainly  the  corporation  cannot  legally  return  to 
Hunter  the  money  which  they  may  thus  recover.  It  belongs  to  the 
rate-payers,  and  the  corporation  have  no  possible  right  to  pay  it  over 
to  Hunter,  But  the  result  will  be  the  same.  These  coal-dealers, 
who  were  tempted  by  Hunter  and  persuaded  by  him  to  pay  him  the 
Ijribes,  will  be  the  sufferers.  They  may  be  ruined ;  and  Hunter,  when 
he  comes  out  of  prison,  may  find  the  securities,  which  are  the  result 
of  his  plunder  and  his  gross  frauds,  untouched,  and  he  may  retain 
the  whole  of  the  money  which  he  has  received  in  this  way.  I  am 
sorry  for  it;  but  such,  in  my  opinion,  is  the  law.  It  follows, 
therefore,  that  the  defendant  has  no  defence,  and  the  judgment 


CHAP.   XIV.]  LIABILITY   FOR   COLLUSIVE   FRAUD.  523 

of   the   divisional    court   must   remain,   and   the   appeal    must   be 
dismissed. 
LiNDLEY  and  Lopes,  LL.  J.,  also  delivered  concurring  opinions. 

Appeal  dismissed} 


HEGENMYER   v.    MARKS. 
'^  37  Minn.  6.     1887. 

Action  to  rescind  a  sale  and  conveyance  of  land.  Judgment  for 
plaintiff. 

GiLFiLLAN,  C.  J.  The  plaintiff  owned  a  lot  of  land  in  Minneapolis. 
One  Creigh  was  a  real-estate  broker,  and  at  his  request  she  employed 
and  authorized  him  to  sell  the  lot  to  any  one  who  would  purchase  it 
at  such  sum  as  would  net  her  $1,050 ;  Creigh  to  receive  as  his  com- 
pensation whatever  he  could  get  for  the  lot  in  excess  of  $1,050.  At 
the  time  of  such  employing,  he  (believing  it  to  be  true)  represented 
to  her,  and  she  believed,  that  $1,050  was  the  fair  market  value  of  the 
lot.  Both  of  them  supposed  the  lot  to  be  entirely  vacant ;  but  a  third 
person,  owning  the  adjoining  lot,  had  by  mistake  constructed  on  her 
lot,  thinking  it  was  his,  a  valuable  house  and  bam  in  such  manner 
that  they  were  part  of  the  realty.  Neither  plaintiff  nor  Creigh  knew 
anything  of  this  at  the  time  of  the  employing.  With  the  buildings 
the  lot  was  worth  over  $3,000.  Creigh  learned  of  it  before  making  a 
sale,  but  did  not  disclose  it  to  plaintiff.  He  sold  the  lot  to  defendant 
for  $1,150 ;  the  latter  knowing  of  the  buildings  on  the  lot,  and  know- 
ing that  Creigh  knew,  and  that  plaintiff  was  ignorant  of  the  fact. 
Of  the  $1,150,  $450  was  paid  in  cash,  plaintiff  receiving  $350  and 
Creigh  $100,  and  $700  was  secured  by  the  defendant's  note  to  plain- 
tiff and  his  mortgage  on  the  lot.    Upon  learning  of  the  facts,  plaintiff 

'  Accord :  Grant  v.  Gold,  etc.,  Syndicate,  1900,  1  Q.  B.  233 ;  Hovenden  v.  Mlll- 
hoff,  83  L.  T.  Rep.  41.  In  the  latter  case  Homer,  L.  J.,  says :  "  Without  attempting 
an  exhaustive  definition  I  may  say  that  the  following  is  one  statement  of  what  con- 
stitute a  bribe.  If  a  gift  be  made  to  a  confidential  agent  with  the  view  of  Inducing 
the  agent  to  act  in  favor  of  the  donor  in  relation  to  transactions  between  the  donor 
and  the  agent's  principal  and  that  gift  Is  secret  as  between  the  donor  and  the  agent 
—  that  is  to  say,  without  the  knowledge  and  consent  of  the  principal  —  then  the 
gift  is  a  bribe  in  the  view  of  the  law.  If  a  bribe  be  once  established  to  the  court's 
satisfaction,  then  certain  rules  apply.  Amongst  them  the  following  are  now  estab- 
lished, and,  in  my  opinion,  rightly  established,  in  the  interests  of  morality  with  the 
view  of  discouraging  the  practice  of  bribery.  First,  the  court  will  not  inquire  into 
the  donor's  motive  in  giving  the  bribe,  nor  allow  evidence  to  be  gone  into  as  to  the 
motive.  Secondly,  the  court  will  presume  in  favor  of  the  principal  and  as  against 
the  briber  and  the  agent  bribed,  that  the  agent  was  Influenced  by  the  brll)e ;  and  this 
presumption  is  irrebuttable.  Thirdly,  If  the  agent  be  a  confidential  buyer  of  goods  for 
his  principal  from  the  briber,  the  court  will  assume  as  against  the  briber  that  the 
true  price  of  the  goods  as  between  him  and  the  purchaser  must  be  taken  to  be  less 
than  the  price  paid  to,  or  charged  by,  the  vendor  by,  at  any  rate,  the  amount  or  value 
of  the  bribe.  If  the  purchaser  alleges  loss  or  damage  beyond  this,  he  must  prove  It. 
As  to  the  above  assumption,  we  need  not  determine  now  whether  it  could  in  any 
case  be  rebutted.  As  at  present  advised,  I  think  In  the  Interests  of  morality,  the 
assumption  should  be  held  an  irrebutable  one :  but  we  need  not  finally  decide  this, 
because  in  the  present  case  there  is  nothing  to  rebut  the  presumption." 


624  BAKER  V.   N.   Y.    NAT.    EXCH.   BANK.  [CHAP.   XIV. 

tendered  to  defendant  the  $350,  with  interest,  and  the  note  and  mort- 
gage, and  demanded  a  reconveyance  of  the  lot,  which  defendant 
refused.  The  action  is  to  rescind  the  sale  and  conveyance.  The 
court  below  decided  in  favor  of  plaintiff. 

The  decision  of  the  court  below  proceeds  on  the  propositions: 
First,  that  it  was  the  duty  of  Creigh,  upon  learning  of  the  buildings 
being  upon  the  lot,  to  communicate  that  fact  to  plaintiff,  and  that 
by  selling  the  lot  without  disclosing  that  fact,  at  a  price  which  he 
knew  she  had  put  upon  it  in  ignorance  of  that  fact,  he  committed 
a  fraud  upon  her;  and,  second,  that  defendant,  by  purchasing  with 
notice  of  Creigh's  fraud,  became  a  party  to  it.  If  the  first  propo- 
eition  be  correct,  the  second  follows  as  a  necessary  consequence. 

The  case  turns  upon  whether  it  was  the  duty  of  Creigh,  before 
making  a  sale,  to  disclose  what  he  had  learned  to  his  principal. 
Upon  this  contract  of  agency,  my  brethren  are  of  opinion  (though 
it  is  not  mine),  that  when  Creigh  learned  a  fact  affecting  the  value 
of  the  property,  and  of  which  fact  he  knew  she  was  ignorant  when  she 
fixed  the  price,  and  if  he  had  reason  to  believe  that,  had  she  known 
the  fact,  she  would  have  fixed  a  higher  price  (as  in  this  case  she 
imdoubtedly  would),  then  good  faith  towards  his  principal  required 
of  him,  and  it  was  his  legal  dut}'^,  to  disclose  the  fact  to  her  before 
he  proceeded  to  sell,  so  that  she  might,  if  so  disposed,  fix  the  selling 
price  in  accordance  with  the  actual  condition  of  things.  This  being 
so,  his  selling  upon  the  basis  of  the  price  first  fixed,  without  disclosing 
to  her  the  fact  he  had  learned,  was  of  course  a  fraud  on  her. 

The  tender  was  sufficient.  Defendant  and  Creigh  were  parties  to 
the  fraud  on  plaintiff,  by  which  Creigh,  one  of  the  parties,  received 
(in  effect)  from  defendant,  the  other  party  to  it,  $100.  No  con- 
sideration of  equity  or  morality  would  require  of  plaintiff  to  make 
that  good  either  to  Creigh  or  defendant.  All  that  can  be  required 
of  her  as  a  condition  of  her  repudiating  the  transaction  imposed  on 
her  by  the  fraud  of  Creigh  and  defendant  is  to  restore  what  (in 
ignorance  of  the  facts)  she  received  in  the  transaction. 

Judgment  affirmed. 


5.    Liability  in  Equity  for  Trust  Funds  diverted  by  Agent. 
BAKER   V.    NEW   YOEK   NATIONAL   EXCHANGE   BANK. 

100  N.  Y.  31.     1885. 

Action  to  recover  the  amount  of  a  check  drawn  upon  defendant 
by  "  C.  A.  Wilson  &  Bro.,  agents."  The  drawers  were  commission 
merchants  who  were  insolvent,  and  who,  in  order  to  protect  their 
principals,  opened  with  defendant,  under  the  above  title,  a  deposit 


CHAP.    XIV.]       LIABILITY   IN   EQUITY   FOR   TRUST   FUNDS.  525 

account  to  the  credit  of  which  they  deposited  the  proceeds  of  the 
sales  of  their  principals'  goods.  The  check  in  question  was  given  in 
settlement  of  the  account  of  the  agents  with  plaintiff,  as  principal. 
Defendant  alleged  that  there  was  no  balance  of  the  account  with 
which  to  pay  the  check,  and  offered  to  prove  that  by  authority  of  the 
agents  they  had  charged  against  the  account  an  individual  indebt- 
edness of  the  firm.    This  evidence  was  excluded. 

Andrews,  J.  The  relation  between  a  commission  agent  for  the 
sale  of  goods  and  his  principal  is  fiducia^3^  The  title  to  the  goods 
until  sold  remains  in  the  principal,  and  when  sold,  the  proceeds, 
whether  in  the  form  of  money,  or  notes,  or  other  securities,  belong 
to  him,  subject  to  the  lien  of  the  commission  agent  for  advances  and 
other  charges.  The  agent  holds  the  goods  and  the  proceeds  upon 
an  implied  trust  to  dispose  of  the  goods  according  to  the  directions 
of  the  principal,  and  to  account  for,  and  pay  over  to  him  the  pro- 
ceeds from  sales.  The  relation  between  the  parties  in  respect  to  the 
proceeds  of  sales  is  not  that  of  debtor  and  creditor  simply.  The 
money  and  securities  are  specifically  the  property  of  the  principal, 
and  he  may  follow  and  reclaim  them,  so  long  as  their  identity  is  not 
lost,  subject  to  the  rights  of  a  bona  fide  purchaser  for  value.  In  case 
of  the  bankruptcy  of  the  agent,  neither  the  goods  nor  their  proceeds 
would  pass  to  his  assignees  in  bankruptcy  for  general  administration, 
but  would  be  subject  to  the  paramount  claim  of  the  principal.  Ches- 
terfield Manufacturing  Co.  v.  Dehon,  5  Pick.  7 ;  Merrill  v.  Bank  of 
Norfolk,  19  Id.  32 ;  Thompson  v.  Perkins,  3  Mason,  233 ;  KnatchbuU 
V.  Hallett,  L.  E.  13  Ch.  Div.  696;  Duguid  v.  Edwards,  50  Barb. 
288 ;  Story  on  Agency,  §  229.  The  relation  between  a  principal  and 
a  consignee  for  sale  is,  however,  subject  to  modification  by  express 
agreement,  or  by  agreement  implied  from  the  course  of  business  or 
dealing  between  them.  The  parties  may  so  deal  that  the  consignee 
becomes  a  mere  debtor  to  the  consignor  for  the  proceeds  of  sales, 
having  the  right  to  appropriate  the  specific  proceeds  to  his  own  use. 

In  the  present  case  the  bank  account  against  which  the  check  was 
drawn  represented  trust  moneys  belonging  to  the  principals  for 
whom  Wilson  &  Bro.  were  agents.  The  deposits  to  the  credit  of 
this  account  were  made  in  the  name  of  the  firm,  with  the  word 
*'  agents "  added.  They  were  the  proceeds  of  commission  sales. 
Wilson  &  Bro.  became  insolvent  in  October,  1878,  and  they  opened 
the  account  in  this  form  for  the  purpose  of  protecting  their  prin- 
cipals, which  purpose  was  known  to  the  bank  at  the  time.  The  check 
in  question  was  drawn  on  this  account  in  settlement  for  a  balance 
due  to  plaintiffs  upon  cash  sales  made  by  the  drawers  as  their  agents. 
It  is  clear  upon  the  facts  that  the  fund  represented  by  the  deposit 
account  was  a  trust  fund,  and  that  the  bank  had  no  right  to  charge 
against  it  the  individual  debt  of  Wilson  &  Bro.  The  bank,  having 
notice  of  the  character  of  the  fund,  could  not  appropriate  it  to  the 


h2Q  EIEHL  V,  EVANSVILLE  FOUNDRY  ASS'n.        [cHAP.  XIY. 

debt  of  Wilson  &  Bro.,  even  with  their  consent  to  the  prejudice 
of  the  cestui  que  trusts.  The  supposed  difficulty  in  maintaining  the 
action  arising  out  of  the  fact  that  the  money  deposited  was  not  the 
specific  proceeds  of  the  plaintiffs'  goods,  is  answered  by  the  case 
of  Van  Alen  v.  American  Nat.  Bank,  52  N.  Y.  1.  Conceding  that 
Wilson  &  Bro.  used  the  specific  proceeds  for  their  own  purposes, 
and  their  identity  was  lost,  yet  when  they  made  up  the  amounts  so 
used,  and  deposited  them  in  the  trust  account,  the  amounts  so  de- 
posited were  impressed  with  the  trust  in  favor  of  the  principals,  and 
became  substituted  for  the  original  proceeds  and  subject  to  the  same 
equities.  The  objection  that  the  deposit  account  represented  not 
only  the  proceeds  of  the  plaintiffs'  goods,  but  also  the  proceeds  of 
the  goods  of  other  persons,  and  that  the  other  parties  interested  are 
not  before  the  court,  and  must  be  brought  in  in  order  to  have  a 
complete  determination  of  the  controversy,  is  not  well  taken.  The 
objection  for  defect  of  parties  was  not  taken  in  the  answer,  and  more- 
over it  does  not  appear  that  there  are  any  unsettled  accounts  of 
Wilson  &  Bro.  with  any  other  person  or  persons  for  whom  they  were 
agents.  The  check  operated  as  a  setting  a,part  of  so  much  of  the 
deposit  account  to  satisfy  the  plaintiffs'  claim.  It  does  not  appear 
that  the  plaintiffs  are  not  equitably  entitled  to  this  amount  out  of 
the  fund,  or  that  there  is  any  conflict  of  interest  between  them  and 
any  other  person  or  persons  for  whom  Wilson  &  Bro.  acted  as  con- 
signees. The  presumption,  in  the  absence  of  any  contrary  indication, 
is,  that  the  fund  was  adequate  to  protect  all  interests,  and  that  Wilson 
&  Bro.  appropriated  to  the  plaintiffs  only  their  just  share. 

We  are  of  opinion  that  the  judgment  was  properly  directed,  and 
it  should  therefore  be  affirmed. 

All  concur.  Judgment  affirmed. 


RIEHL   V.   EVANSVILLE   FOUNDRY   ASSOCIATION. 

104  Ind.  70.     1885. 

Action  to  have  defendant  declared  a  trustee  of  certain  real  estate 
for  benefit  of  plaintiff.    Judgment  for  plaintiff. 

Elliot,  J.  The  substantial  averments  of  the  appellee's  complaint 
are  these:  Frederick  A.  Riehl  was  the  appellee's  book-keeper  and 
salesman,  and,  in  that  capacity,  received  of  its  money  $6,000  which 
he  embezzled ;  with  the  money  embezzled  he  bought  real  estate,  caused 
the  title  to  be  made  to  his  wife,  and  built  a  house  on  the  real  estate 
so  purchased  and  conveyed  to  her;  that  she  had  no  money  of  her 
own  with  which  to  purchase  the  property,  but,  with  knowledge  of 
her  husband's  fraudulent  appropriation  of  his  employer's  money. 


CHAP.   XIV.]      LIABILITY   IN   EQUITY  FOB  TRUST  FUNDS.  527 

took  the  title  to  the  property  for  the  purpose  of  defrauding  his 
employer. 

A  book-keeper  or  salesman,  who  receives  the  money  of  his  em- 
ployer by  virtue  of  his  employment,  does  receive  it  in  a  fiduciary 
capacity,  and  if  he  fraudulently  appropriates  it  to  his  own  use,  he 
is  guilty  of  a  breach  of  trust.  The  funds  which  come  into  the  hands 
of  an  agent  for  his  principal  are  trust  funds,  and  the  latter,  as  the 
beneficiary,  becomes  in  equity  the  owner  of  the  property  purchased 
by  the  agent  with  these  funds.  Where  one  occupies  the  position  of 
a  trustee,  either  by  express  appointment  or  by  implication  of  law, 
and  wrongfully  uses  the  money  received  by  him  as  trustee  in  the 
purchase  of  property,  the  beneficiary  may  follow  it  into  the  property. 
Pomeroy  Eq.  Juris,  sec.  1051 ;  Story  Eq.  Juris,  sec.  1260 ;  Bank  of 
America  v.  Pollock,  4  Edw.  Ch.  215;  Taylor  v.  Plumer,  3  M.  & 
S.  562 ;  Pugh  v.  Pugh,  9  Ind.  132 ;  Newton  v.  Porter,  69  N.  Y.  133 
(25  Am.  E.  152). 

"  The  trust,"  says  Mr.  Bigelow,  "  will  follow  the  estate  into  the 
hands  of  all  purchasers  with  notice,  and  of  volunteers  or  persons 
taking  by  gift  or  descent  from  the  trustees."    Bigelow,  Eq.  63. 

In  this  instance,  Mrs.  Eiehl  was  a  volunteer,  and  had  notice  of 
the  trust.  Clearly  enough,  she  cannot  successfully  resist  the  effort 
of  the  beneficiary  to  follow  the  money  into  the  property  conveyed  to 
her. 

The  complaint  is  not  one  by  a  creditor  to  set  aside  a  fraudulent 
conveyance  of  property,  but  is  one  to  enforce  a  trust  arising  by 
implication  of  law.  Where  an  agent,  in  violation  of  his  trust,  uses 
the  money  of  his  principal,  the  law  implies  a  trust  in  favor  of  the 
principal,  and  to  enforce  the  trust  thus  implied  equity  will  subject 
the  property  purchased  to  the  claims  of  the  principal,  as  against 
either  a  volunteer  or  a  fraudulent  grantee.  It  is  this  equitable  prin- 
ciple which  the  complaint  invokes. 

Cases  are  cited  holding  that  where  an  agent  embezzles  money  from 
his  employer  and  invests  it  in  property,  the  principal  cannot  follow 
the  trust  into  the  property,  because  the  remedy  against  the  agent  is 
by  a  criminal  prosecution.  Campbell  v.  Drake,  4  Ire.  Eq.  94; 
Pascoag  Bank  v.  Hunt,  3  Edw.  Ch.  583. 

We  have  no  doubt  that  these  cases  were  not  well  decided.  They 
are  in  conflict  with  the  very  great  weight  of  authority,  and  are  un- 
sound in  principle.  The  fact  that  the  agent  may  be  criminally 
prosecuted  does  not  affect  the  right  of  the  principal  to  get  back  his 
money.  With  quite  as  much  reason  might  it  be  urged  that  the  prin- 
cipal could  not  take  from  the  embezzler  the  money,  if  found  on  his 
person,  because  he  can  be  punished  by  a  criminal  prosecution^  as  to 
urge  that  the  principal  cannot  follow  the  trust  because  the  embezzler 
is  liable  to  be  punished  by  a  prosecution  at  the  instance  of  the  state. 
There  is  no  conceivable  reason  why  the  wronged  employer  may  not 


628  RIEHL  V.   EVAN8VILLE   FOUNDRY   ASS'n.  [CHAP.    XIV. 

secure  his  money,  and  the  embezzler  be  also  punished.  The  punish- 
ment is  not  to  vindicate  or  reward  the  principal,  but  to  protect  the 
community  from  the  criminal  acts  of  embezzlers.  ^ 

We  agree  with  counsel  that  the  beneficiary  cannot  follow  the  trust 
into  the  property  purchased  by  the  agent,  and  also  compel  payment 
of  the  money  from  the  agent.  Barker  v.  Barker,  14  Wis.  143; 
Murray  v.  Lylburn,  2  Johns.  Ch.  441.  But  that  question  does  not 
arise  in  this  case.  Here  the  beneficiary  seeks  to  subject  the  property 
bought  with  the  trust  funds  to  its  claims,  and  does  not  seek  to  coerce 
the  agent  to  also  refund  the  money  embezzled.  The  rule  of  which  we 
are  speaking  does  not  forbid  the  beneficiary  from  obtaining  a  judg- 
ment against  the  agent  for  the  sum  remaining  due  after  deducting 
the  value  of  the  property,  and,  under  our  system,  the  plaintiff  in  such 
a  case  as  this  may,  in  one  action,  obtain  both  equitable  and  legal 
relief.  This  is  what  the  complaint  seeks,  and  it  is  not  vulnerable 
to  a  demurrer,  even  though  it  may  demand  too  much,  for  a  complaint 
sufficient  to  entitle  the  plaintiff  to  some  relief  will  repel  a  demurrer. 

(The  court  then  decides  that  the  evidence  is  sufficient  to  sustain 
the  finding  and  judgment  of  the  trial  court) . 

-  .   Judgment  affirmed. 


CHAP.   XV.]       LIABILITY   UPON    UNAUTHORIZED   CONTRACT.  529 


PAET  rv. 

LEGAL  EFFECT   OF   THE  RELATION  AS   BETWEEN" 
THE   AGENT   AND   THIKD   PARTIES. 


CHAPTER    XV. 

Contract   Relations    Between    Agent   and    Third 

Party. 

1.    Liability  of  Agent  upon  an  Unauthorized  Contract. 
KROEGER   V.    PITCAIRN. 

101  Pa.  St.  311.     1882. 

Case,  to  recover  damages  against  an  agent  for  loss  sustained  by 
plaintiff  in  consequence  of  the  agent's  representations.  Judgment 
for  defendant  non  obstante  veredicto. 

Defendant  was  acting  as  agent  for  a  fire  insurance  company,  and 
represented  to  plaintiff  that  the  company,  notwithstanding  the  terms 
of  the  policy,  would  allow  plaintiff  to  keep  petroleum.  Defendant 
had  no  authority  to  make  this  representation,  and  the  policy  waa 
successfully  defended  by  the  company. 

Sterrett,  J.  The  subject  of  complaint,  in  both  specifications  of 
error,  is  the  entry  of  judgment  for  defendant  non  obstante  veredicto. 
It  is  contended  that,  upon  the  facts  established  by  the  verdict,  judg- 
ment should  have  been  entered  thereon  in  favor  of  plaintiff.  The 
jury  were  instructed  to  return  a  verdict  for  the  amount  claimed 
by  him,  if  they  were  satisfied  the  allegations  of  fact  contained  in 
the  point  presented  by  him  were  true.  In  view  of  this,  the  finding 
in  his  favor  necessarily  implies  a  verification  of  the  several  matters 
specified  in  plaintiff's  point,  and  hence  it  must  now  be  regarded  as 
containing  a  truthful  recital  of  the  circumstances  connected  with 
the  delivery  of  the  policy  and  payment  of  the  premium. 

The  transaction,  as  therein  detailed,  clearly  amounted  to  a  mutual 
understanding  or  agreement  between  the  parties  that  the  stock  of 
merchandise  mentioned  in  the  policy  should  include  one  barrel  of 
carbon  oil;  in  other  words,  that  the  plaintiff  should  have  the  privi- 

34 


530  KROEGEB  V.   PITCAIRN.  [CHAP.   XV. 

lege  of  keeping  that  quantity  of  oil  in  connection  with  and  as  a  part 
of  the  stock  insured,  without  thereby  invalidating  his  policy.  It  is 
impossible  to  regard  the  transaction  in  any  other  light.  The  jury 
found  that  plaintiff  "  took  the  policy  upon  the  faith "  of  the  repre- 
eentations  made  by  defendant.  These  representations  were  not 
merely  expressions  of  opinion  as  to  the  meaning  of  the  policy.  On 
the  contrary,  the  defendant,  acting  as  its  agent  and  assuming  au- 
thority to  speak  for  the  insurance  company,  asserted  without  any 
qualification  that  when  carbon  oil  was  kept  as  plaintiff  was  in  the 
habit  of  keeping  it  —  a  single  barrel  at  a  time  —  it  was  unnecessary 
to  mention  the  fact  in  the  policy,  or  otherwise  obtain  the  consent  of 
the  company;  that  no  notice  is  ever  taken  of  it  unless  "it  is  kept 
in  large  quantity  —  say  several  hundred  barrels.  In  that  case,  when 
it  is  wholesale,  it  should  be  mentioned;  but  as  long  as  it  is  kept, 
not  more  than  a  barrel  in  the  store  at  a  time,  it  is  considered  as  gen- 
eral merchandise,  and  is  not  taken  notice  of  in  any  other  way." 
Such  was  the  language  employed  by  defendant,  evidently  for  the 
purpose  of  dispelling  any  doubt  that  existed  in  the  mind  of  the 
plaintiff,  and  inducing  him  to  accept  the  policy  and  pay  the  pre- 
mium ;  and  to  that  end  at  least  it  was  successful.  WTiat  was  said  and 
done  by  defendant,  in  the  course  of  the  transaction,  amounted  to 
more  than  a  positive  assurance  that  the  accepted  meaning  of  tlie 
policy  was  as  represented  by  him.  In  effect,  if  not  in  substance,  his 
declarations  were  tantamount  to  a  proposition,  on  behalf  of  the  com- 
pany he  assumed  to  represent,  that  if  the  insurance  was  effected  it 
should  be  with  the  understanding  that  a  barrel  of  carbon  oil  was 
included  in,  and  formed  part  of,  the  insured  stock  of  merchandise, 
without  being  specially  mentioned  in  the  policy. 

The  plaintiff  doubtless  so  regarded  his  declarations,  and  rel3ring 
thereon,  as  the  jury  has  found,  accepted  the  policy  on  the  terms  pro- 
posed, and  thus  concluded,  as  he  believed,  a  valid  contract  of  insur- 
ance, authorizing  him  to  keep  in  stock,  as  he  had  theretofore  done, 
a  small  quantity  of  carbon  oil.  It  was  not  until  after  the  property 
was  destroyed  that  he  was  undeceived.  He  then  discovered  that, 
in  consequence  of  defendant  having  exceeded  his  authority,  he  was 
without  remedy  against  the  company. 

Has  he  any  remedy  against  the  defendant,  by  whose  unauthorized 
act  he  was  placed  in  this  false  position?  "We  think  he  has.  If  the 
president,  or  any  one  duly  authorized  to  represent  the  company,  had 
acted  as  defendant  did,  there  could  be  no  doubt  as  to  its  liability. 
Why  should  not  the  defendant  be  personally  responsible,  in  like 
manner,  for  the  consequences,  if  he,  assuming  to  act  for  the  company, 
overstepped  the  boundary  of  his  authority,  and  thereby  misled  the 
plaintiff  to  his  injury,  whether  intentionally  or  not? 

The  only  difference  is,  that  in  the  latter  the  authority  is  self- 
assumed,  while  in  the  former  it  is  actual ;  but  that  cannot  be  urged 


CHAP.    XV.]       LIABILITY    UPON    UNAUTHORIZED    CONTRACT.  531 

as  a  sufficient  reason  why  plaintiff,  who  is  blameless  in  both  cases, 
should  bear  the  loss  in  one  and  not  in  the  other.  As  a  general  rule, 
"  whenever  a  party  undertakes  to  do  any  act  as  the  agent  of  another, 
if  he  does  not  possess  any  authority  from  the  principal  therefor,  or 
if  he  exceeds  the  authority  delegated  to  him,  he  will  be  personally 
liable  to  the  person  with  whom  he  is  dealing,  for  or  on  account  of 
his  principal."  Story  on  Agency,  §  264.  The  same  principle  is 
recognized  in  Evans  on  Agency,  301;  Whart.  on  Agency,  524; 
2  Smith's  Leading  Cases,  380,  note;  1  Parsons  on  Cont.  67,  and 
in  numerous  adjudicated  cases,  among  which  are  Hampton  v. 
Speckenagel,  9  S.  &  K.  212,  222;  11  Am.  Dec.  704;  Layng  v.  Stewart, 
1  W.  &  S.  222,  226;  McConn  v.  Lady,  10  W.  N.  C.  493;  Jefts  v. 
York,  10  Cush.  392 ;  Baltzen  v.  Nicolay,  53  N.  Y.  467. 

In  the  latter  case,  it  is  said,  the  reason  why  an  agent  is  liable  in 
damages  to  the  person  with  whom  he  contracts  when  he  exceeds  his 
authority,  is  that  the  party  dealing  with  him  is  deprived  of  any 
remedy  upon  the  contract  against  the  principal.  The  contract, 
though  in  form  that  of  the  principal,  is  not  his  in  fact,  and  it  is 
but  just  that  the  loss  occasioned  by  there  being  no  valid  contract  with 
him  should  be  borne  by  the  agent  who  contracted  for  him  without 
authority.  In  Layng  v.  Stewart,  supra,  Mr.  Justice  Huston  says: 
"  It  is  not  worth  while  to  be  learned  on  very  plain  matters.  The 
cases  cited  show  that  if  an  agent  goes  beyond  his  authority  and 
employs  a  person,  his  principal  is  not  bound,  and  in  such  case  the 
agent  is  bound." 

The  plaintiff  in  error,  in  McConn  v.  Lady,  supra,  made  a  contract^ 
believing  he  had  authority  to  do  so,  and  not  intending  to  bind  him- 
self personally.  The  jury  found  he  had  no  authority  to  make  the 
contract  as  agent,  and  this  court,  in  affirming  the  judgment,  said: 
"  It  was  a  question  of  fact  submitted  to  the  jury  whether  the  plain- 
tiff in  error  had  authority  from  the  school  board  to  make  the  contract 
as  their  agent.  They  found  he  had  not.  He  was  personally  liable 
whether  he  made  the  contract  in  his  own  name  or  in  the  name  of 
his  alleged  principal.  It  is  a  mistake  to  suppose  that  the  only  remedy 
was  an  action  against  him  for  the  wrong.  The  party  can  elect  to 
treat  the  agent  as  a  principal  in  the  contract." 

The  cases  in  which  agents  have  been  adjudged  liable  personally 
have  sometimes  been  classified  as  follows,  viz. :  ( 1 )  Where  the  agent 
makes  a  false  representation  of  his  authority  with  intent  to  deceive. 
(2)  Where,  with  the  knowledge  of  his  want  of  authority,  but  without 
intending  any  fraud,  he  assumes  to  act  as  though  he  were  fully 
authorized.  (3)  Where  he  undertakes  to  act  bona  fide,  believing  he 
has  authority,  but  in  fact  has  none,  as  in  the  case  of  an  agent  acting 
under  a  forged  power  of  attorney.  As  to  cases  fairly  brought  within 
either  of  the  first  two  classes,  there  cannot  be  any  doubt  as  to  the 
personal  liability  of  the  self-constituted  agent;  and  his  liability  may 


532  KROEGER  V.   PITCAIRN.  [CHAP.   XV." 

be  enforced  either  by  an  action  on  the  case  for  deceit,  or  by  electing" 
to  treat  him  as  principal.  While  the  liability  of  agents,  in  cases  be- 
longing to  the  third  class,  has  sometimes  been  doubted,  the  weight 
of  authority  appears  to  be  that  they  are  also  liable. 

In  Story  on  Agency,  the  learned  author,  recognizing  the  undoubted 
liability  of  those  belonging  to  the  first  two  classes,  says:  "Another 
case  may  be  put  which  may  seem  to  admit  of  some  doubt,  and  that  is 
where  the  party  undertakes  to  act  as  an  agent  for  the  principal,  bona 
fide,  believing  he  has  due  authority,  and  therefore  acts  under  an 
innocent  mistake.  In  this  last  case,  however,  the  agent  is  held  by 
law  to  be  equally  as  responsible,  as  he  is  in  the  two  former  cases, 
although  he  is  guilty  of  no  intentional  fraud  or  moral  turpitude. 
This  whole  doctrine  proceeds  upon  a  plain  principle  of  justice;  for 
every  person  so  acting  for  another,  by  a  natural  if  not  by  a  necessary 
implication,  holds  himself  out  as  having  competent  authority  to  do 
the  act,  and  he  thereby  draws  the  other  party  into  a  reciprocal  engage- 
ment. If  he  has  no  such  authority  and  acts  bona  fide,  still  he  does 
a  wrong  to  the  other  party;  and  if  that  wrong  produces  injury  to 
the  latter,  owing  to  his  confidence  in  the  truth  of  an  express  or 
implied  assertion  of  authority  by  the  agent,  it  is  perfectly  just  that 
he  who  makes  such  assertion  should  be  personally  responsible  for  the 
consequences,  rather  than  that  the  injury  should  be  borne  by  the 
other  party  who  has  been  misled  by  it."  Story  on  Agency,  §  264. 
This  principle  is  sustained  by  the  authorities  there  cited,  among 
which  is  Smout  v.  Ilbery,  10  M.  &  W.  1,  9. 

Without  pursuing  the  subject  further,  we  are  of  the  opinion  that 
upon  the  facts  established  by  the  verdict,  judgment  should  have  been 
entered  for  the  plaintiff,  on  the  question  of  law  reserved. 

Judgment  reversed,  and  judgment  is  now  entered  in  favor  of  the 
plaintiff  for  $3,027.20,  the  amount  foimd  by  the  jury,  with  interest 
from  January  20,  1882,  the  date  of  the  verdict. 

Judgment  reversed} 

»  Accord :  CoUen  v.  Wright,  7  E.  &  B.  301,  8  E.  &  B.  647.  But  If  the  third  party 
knows  that  the  agent  has  not  authority  there  is  no  warranty.  Halbot  v.  Lens,  [1900] 
1  Ch.  344,  where  Keeewich,  J.,  says :  "  In  order  to  maintain  such  an  action  there 
must  be  misrepresentation  in  fact  trusted  by  the  person  to  whom  it  is  made,  and  I 
cannot  myself  see  how  a  man  can  be  properly  said  to  have  made  such  a  representa- 
tion when  in  truth  and  substance  he  has  said,  '  Although  I  will,  if  you  wish  it,  sign 
this  on  behalf  of  the  alleged  principal,  I  tell  you  plainly  that  I  have  no  authority 
from  him  to  do  so,  and  have  every  reason  to  believe  that  such  authority  will  not  be 
forthcoming.'  A  man,  of  course,  might  say,  '  I  have  no  authority,  and  probably  can- 
not obtain  such  authority,  but  yet  I  will  contract  to  obtain  it,  and  run  the  risk  of 
damages.'  Such  a  contract  is  conceivable,  and  would  be  good  in  law,  but  ought  not, 
I  think,  to  be  inferred  except  from  facts  leading  directly  to  that  conclusion." 


CHAP.   XV.]      LIABILITY   UPON   UNAUTHORIZED   CONTRACT.  533 

BALTZEN   V.   NICOLAY. 

53  N.  Y.  467.     1873. 

Action  for  damages  against  an  auctioneer.  Judgment  for 
plaintiffs. 

Defendant,  without  disclosing  his  principal,  sold  stock  to  plaintiffs. 
The  principal  refused  to  perform  because  the  stock  was  sold  at  a  price 
lower  than  that  authorized.  Defendant  sets  up  that  the  contract  of 
sale  was  void  because  not  in  writing. 

Andrews,  J.  There  are  but  two  theories  upon  which  the  plain- 
tiffs can  claim  to  recover  in  this  action.  The  one  is  that  the  defend- 
ant, acting  as  agent  for  Belmont  &  Co.  in  selling  the  stock,  exceeded 
his  authority  by  selling  it  below  the  price  limited  by  them  for  the 
sale.  The  other  is  that  the  defendant  did  not  at  the  time  of  the  sale 
disclose  his  principals,  and  thereby  became  bound  as  principal  upon 
the  contract  made.  WTien  an  agent  makes  a  contract  beyond  his 
authority,  by  which  the  principal  is  not  bound,  by  reason  of  the  fact 
that  it  was  unauthorized,  the  agent  is  liable  in  damages  to  the  person 
dealing  with  him.  upon  the  faith  that  he  possessed  the  authority 
which  he  assumed.  The  ground  and  form  of  his  liability  in  such 
a  case  has  been  the  subject  of  discussion,  and  there  are  conflicting 
decisions  upon  the  point ;  ^  but  the  later  and  better  considered  opinion 
seems  to  be  that  his  liability,  when  the  contract  is  made  in  the  name 
of  his  principal,  rests  upon  an  implied  warranty  of  his  authority 
to  make  it,  and  the  remedy  is  by  an  action  for  its  breach.  CoUen  v. 
Wright,  8  E.  &  B.  647;  White  v.  Madison,  26  N.  Y.  117;  Dung  v. 
Parker,  52  Id.  494. 

The  reason  why  the  agent  is  liable  in  damages  to  the  person  with 
whom  he  contracts,  when  he  exceeds  his  authority,  is  that  the  party 
dealing  with  him  is  deprived  of  any  remedy  upon  the  contract  against 
the  principal.  The  contract,  though  in  form  the  contract  of  the 
principal,  is  not  his  in  fact,  and  it  is  but  just  that  the  loss  occasioned 
by  there  being  no  valid  contract  with  him  should  be  borne  by  the 
agent  who  contracted  for  him  without  authority.  In  order  to  make 
the  agent  liable  in  such  a  case,  however,  the  unauthorized  contract 
must  be  one  which  the  law  would  enforce  against  the  principal  if 
it  had  been  authorized  by  him.  Dung  v.  Parker,  supra.  Otherwise 
the  anomaly  would  exist  of  giving  a  right  of  action  against  the 
assumed  agent  for  an  unauthorized  representation  of  his  power  to 
make  a  contract,  when  the  breach  of  the  contract  itself,  if  he  had 
been  authorized  to  make  it,  would  have  furnished  no  ground  of  action. 
That  the  agent  who  makes  a  contract  for  an  undisclosed  principal 

'  See  Cochran  v.  Baker,  34  Or.  555 ;  Anderson  v.  Adams,  43  Or.  621 ;  Farmers', 
•tc,  Trust  Co.  t'.  Floyd,  47  Oh.  St.  525. 


534  BALTZEN   V.   NICOLAT.  [CHAP.   XV. 

is  personally  bound  by  it,  although  the  party  dealing  with  him  may 
know  the  general  fact  that  he  is  acting  as  agent,  is  well  settled ;  nor 
does  the  fact  that  the  agent  is  an  auctioneer,  and  tliat  the  contract 
arises  upon  a  sale  by  him  as  such,  withdraw  it  from  the  operation 
of  the  rule.  Thomson  v.  Davenport,  9  B.  &  C.  78 ;  Mills  v.  Hunt, 
20  Wend.  431. 

Applying  these  principles  to  the  case,  the  recovery  cannot  be  up- 
held. There  was  no  payment  on  account  of  the  purchase  of  the  stock, 
and  no  delivery;  and  no  memorandum  in  writing,  of  the  sale,  was 
shown  to  have  been  made  by  the  auctioneer.  The  plaintiffs  upon  the 
case  made  must  recover,  if  at  all,  upon  the  basis  of  the  existence 
of  a  contract,  valid  in  form,  for  the  purchase  of  the  stock.  If  they 
rely  upon  the  false  warranty  of  authority  by  the  defendant,  then, 
if  the  contract  was  invalid  within  the  Statute  of  Frauds,  they  can 
recover  nothing,  for  in  a  legal  sense  they  have  sustained  no  injury. 
If  they  say  that  the  contract  was  the  personal  contract  of  the  de- 
fendant, he  has  a  right  to  interpose  the  statute  as  his  defence.  The 
validity  of  the  contract,  under  the  Statute  of  Frauds,  was  put  in  issue 
by  the  pleadings.  It  appeared  upon  the  trial  that  there  was  no  de- 
livery of  the  stock,  and  that  the  purchase  money,  although  tendered, 
was  not  accepted  by  the  defendant.  The  defendant,  at  the  conclu- 
sion of  the  plaintiff's  case,  moved  to  dismiss  the  complaint  on  the 
ground  that  no  liability  had  been  shown,  and  no  valid  contract  of 
purchase  or  sale,  within  the  statute,  had  been  proved.  The  referee 
denied  the  motion  and  the  defendant  excepted.  The  exception  was 
well  taken. 

It  was  part  of  the  plaintiffs'  case  to  show  a  valid  contract  for  the 
sale  of  the  stock ;  and,  upon  objection  being  interposed  on  the  ground 
of  the  statute,  it  appearing  that  the  contract  proved  was  within  it, 
they  were  bound  to  establish  affirmatively  the  existence  of  an  agree- 
ment valid  by  its  provisions. 

The  fact  that  the  law  imposes  upon  auctioneers  the  duty  to  make 
memoranda  of  sales  made  by  them  did  not  relieve  the  plaintiffs  from 
the  necessity,  in  this  action,  of  proving  a  valid  contract;  and  the 
presumption  which  in  many  cases  is  indulged,  in  favor  of  the  per- 
formance of  official  duty,  cannot  stand  for  proof  that  there  was  a 
written  contract  of  sale  as  against  the  defendant,  who  denies  the  fact, 
and  against  whom  the  contract  is  directly  or  indirectly  sought  to 
be  enforced. 

The  waiver,  by  the  defendant,  of  the  deposit  of  a  part  of  the  pur- 
chase money  required  by  the  conditions  of  sale,  precluded  him  from 
alleging  the  omission  to  make  it  as  a  breach  of  the  contract  by  the 
plaintiffs;  but  it  did  not  estop  him  from  showing  that  there  was  no 
actual  payment  on  the  contract,  without  which  the  statute  is  not 
satisfied,  where  the  fact  of  payment  is  relied  upon  to  take  a  contract 
out  of  it. 


CHAP.  XV.]      LIABILITY   FOB  INCOMPETENT  PRINCIPAL.  535 

The  judgment  should  be  reversed  and  a  new  trial  ordered,  with 
costs  to  abide  the  event. 

Kapallo,  Allen,  and  Folger,  JJ.,  concur. 
Church^  C.  J.,  Grover  and  Peckham,  JJ.,  dissent. 

Judgment  reversed} 


2.    Liability  of  Agent  who  Acts  for  Incompetent  Principal. 
PATTERSON   V.   LIPPINCOTT. 

47  N.  J.  L.  457.     1886. 

Action  of  debt.  Judgment  of  non-suit  against  plaintiff.  Defend- 
ant appeals.    The  opinion  states  the  facts. 

ScuDDER,  J.  An  action  of  debt  was  brought  in  the  court  for  the 
trial  of  small  causes  by  Jacob  M.  Patterson  against  Barclay  Lippin- 
cott,  to  recover  the  balance,  $75,  claimed  under  a  contract  in  writing 
for  the  sale  of  the  exclusive  right  to  use,  manufacture  and  sell  the 
plaintiff's  patent  "  air-heating  attachment,"  in  Atlantic  County,  New 
Jersey.  The  writing  was  signed  "  Geo.  P.  Lippineott,  per  Barclay 
Lippincott,"  on  the  part  of  the  purchaser.  The  state  of  demand 
avers  that  by  virtue  of  this  agreement  the  plaintiff  did  in  due  form 
convey  said  patent-right  to  said  George  P.  Lippineott,  that  said 
George  and  Barclay,  on  request,  have  refused  to  pay  said  balance, 
and  that,  since  payment  became  due,  the  plaintiff  has  found  out  and 
charges  that  said  George  is  under  the  age  of  twenty-one  years.  He 
further  avers  that  he  never  had  any  contract  or  negotiations  with 
George,  and  that  Barclay's  warranty  of  authority  to  act  for  his  minor 
son  is  broken,  whereby  an  action  has  accrued  to  the  plaintiff  against 
the  defendant. 

The  averment  that  the  plaintiff  never  had  any  contract  or  nego- 
tiations with  George,  is  not  sustained  by  the  proof,  for  the  testimony 
of  Joseph  N".  Risley,  the  agent  who  made  the  sale,  which  is  the  only 
evidence  on  this  point  that  appears  in  the  case,  is,  that  the  defendant 
told  him  he  was  going  out  of  business  and  intended  to  transfer  it 
to  George ;  requested  him  to  see  George ;  he  did  so,  talked  with  him ; 
he  looked  at  the  patent;  was  satisfied  with  it,  and  talked  with  his 
father  about  buying  it.  The  deed  for  the  patent-right  in  Atlantic 
County  was  drawn  to  George  P.  Lippineott.  It  is  proved  by  the  ad- 
mission of  the  defendant,  Barclay  Lippineott,  that  at  the  time  of 

*  An  agent  of  a  corporation  does  not  warrant  that  the  contract  made  In  its  name 
Is  not  ultra  vires.  "  The  Implied  warranty  of  the  agent  does  not  relate  to  the  power 
of  the  principal  to  enter  into  the  particular  contract.  He  simply  covenants  that  he 
has  authority  to  act  for  bis  principal,  not  that  the  act  of  the  principal  is  legal  and 
binding."    Thilmany  v.  Iowa  Paper-Bag  Co.,  108  Iowa,  357,  361-362. 


536  PATTEESON   V.   LIPPINCOTT.  [CHAP.   XV, 

Buch  sale  and  transfer  his  son  George  was  a  minor.  This  admission 
is  competent  testimony  in  this  suit  against  him. 

A  verdict  of  the  jury  was  given  for  the  plaintiff  against  the  de- 
fendant in  the  court  for  the  trial  of  small  causes;  and  on  the  trial 
of  the  appeal  in  the  court  of  common  pleas  there  was  a  judgment 
of  non-suit  against  the  plaintiff.  The  reason  for  the  non-suit  does 
not  appear  on  the  record,  but  the  counsel  have  argued  the  cause  be- 
fore us  on  the  case  presented  by  the  pleadings  and  proofs,  the  con- 
tention being  here,  as  it  was  below,  that  the  plaintiff  could  not  aver 
and  show  the  infancy  of  George  P.  Lippincott,  and  bring  this  action 
against  Barclay  Lippincott,  as  principal  in  the  contract,  in  contra- 
diction of  its  express  terms. 

On  the  face  of  the  written  agreement  George  P.  Lippincott  is  the 
principal,  and  Barclay  Lippincott  the  agent.  The  suit  on  the  con- 
tract should  therefore  be  against  the  principal  named,  and  not  against 
the  agent,  unless  there  be  some  legal  cause  shown  to  change  the 
responsibility.  The  cause  assigned  by  the  plaintiff  is  the  infancy  of 
George  at  the  time  the  agreement  was  made  in  his  name  by  his 
father.  The  authority  on  which  he  bases  his  right  of  action  is  Bay 
V.  Cook,  2  Zab.  (X.  J.)  343,  which  follows  and  quotes  Mott  v.  Hicks, 
1  Cow.  (N.  Y.)  513,  13  Am.  Dec.  550,  to  the  effect  that  if  a  person 
undertakes  to  contract  as  agent  for  an  individual  or  corporation, 
and  contracts  in  a  manner  which  is  not  legally  binding  upon  liis  prin- 
cipal, he  is  personally  responsible ;  and  the  agent,  when  sued  on  such 
contract,  can  exonerate  himself  from  the  personal  responsibility  only 
by  showing  his  authority  to  bind  those  for  whom  he  has  undertaken 
to  act.  Bay  v.  Cook  was  an  action  against  an  overseer  who  had 
employed  a  physician  to  attend  a  sick  pauper,  without  an  order  for 
relief  under  the  provisions  of  the  Act  concerning  the  poor.  As  his 
parol  contract  with  the  physician  was  entirely  without  authority  to 
bind  the  township,  it  was  said  that  he  had  only  bound  himself  to 
pay  for  the  services  rendered  at  his  request. 

Later  cases  have  held  that  an  agent  is  not  directly  liable  on  an 
instrument  he  executes,  without  authority,  in  another's  name;  that 
the  remedy  in  such  case  is  not  on  the  contract,  but  that  he  may  be 
sued  eitlier  for  breach  of  warranty  or  for  deceit,  according  to  the 
facts  of  the  case.  Jenkins  v.  Hutchinson,  13  Q.  B.  744;  Lewis  v. 
Nicholson,  18  Q.  B.  503 ;  Baltzen  v.  Nicolay,  53  N.  Y.  467 ;  White 
V.  Madison,  26  N.  Y.  117,  and  many  other  cases  collected  in  the  notes 
in  Wharton  on  Agency,  §§  524,  532,  and  notes  to  Thomson  v.  Daven- 
port, 9  B.  &  C.  78,  ^in  2  Smith's  Leading  Cases,  377  (Am.  ed.). 
Andrews^  J.,  in  Baltzen  v.  Nicolay,  supra,  says :  "  The  ground  and 
form  of  the  agent's  liability  in  such  a  case  has  been  the  subject  of 
discussion,  and  there  are  conflicting  decisions  upon  the  point;  but 
the  later  and  better-considered  opinion  seems  to  be,  that  his  liability, 
when  the  contract  is  made  in  the  name  of  his  principal,  rests  upon 


CHAP.   XV.]      LIABILITY   FOB  INCOMPETENT  PRINCIPAL.  537 

an  implied  warranty  of  his  authority  to  make  it,  and  that  the  remedy 
is  by  an  action  for  its  breach." 

Although  the  state  of  demand  in  the  present  case  is  uniformly 
drawn,  there  is  in  the  last  sentence  a  charge  that  the  defendant's 
warranty  of  authority,  in  pretending  to  act  for  said  minor,  is  broken, 
whereby  an  action  has  accrued.  This  alleged  breach  of  an  implied 
warranty  is  founded  on  the  assumption  that  the  son  could  not  confer 
any  authority  during  his  minority  to  his  father  to  act  for  him  in 
the  purchase  of  this  patent-right.  There  are  two  answers  to  this 
position.  The  act  of  an  infant  in  making  such  a  contract  as  this, 
which  may  be  for  his  benefit  in  transacting  business,  either  directly 
or  through  the  agency  of  another,  is  voidable  only,  and  not  absolutely 
void,  and  therefore  there  is  no  breach  of  the  implied  warranty  unless 
there  be  proof  showing  that  the  act  of  the  agent  was  entirely  without 
the  infant's  knowledge  or  consent.  The  mere  fact  of  the  infancy  of 
the  principal  will  not  constitute  such  breach. 

It  was  argued  in  Whitney  v.  Dutch,  14  Mass.  457,  7  Am.  Dec.  229, 
that  a  promissory  note  signed  by  Dutch  for  his  partner  Green,  who 
was  a  minor,  was  void  as  to  Green,  because  he  was  not  capable  of 
communicating  authority  to  Dutch  to  contract  for  him,  and  that 
being  void,  it  was  not  the  subject  of  a  subsequent  ratification.  But 
the  court  held  that  it  was  voidable  only,  and  having  been  ratified  by 
the  minor  after  he  came  of  age,  it  was  good  against  him.  See  Tyler, 
Inf.  Ch.  III.  §§  14,  18. 

Another  answer  is  that  the  defence  of  infancy  to  this  contract  with 
the  plaintiff  can  only  be  set  up  by  the  infant  himself  or  those  who 
legally  represent  him.  Infancy  is  a  personal  privilege  of  which  no 
one  can  take  advantage  but  himself.  Voorhees  v.  "Wait,  3  Green 
(N.  J.),  343;  Tyler,  Inf.  Ch.  IV.  §  19;  Bingham,  Inf.  49. 

In  this  case  the  plaintiff  seeks  to  disaffirm  the  infant's  contract 
with  him,  in  his  own  behalf,  and  sue  a  third  party  on  the  contract, 
whose  authority  to  bind  him  the  infant  has  not  denied.  The  privilege 
of  affirming  or  disaffirming  the  contract  belongs  to  the  infant  alone, 
and  the  plaintiff  cannot  exercise  it  for  him.  The  mere  refusal  to 
pay,  charged  in  the  demand  and  proved,  is  not  a  denial  of  the  de- 
fendant's authority  to  bind  the  infant;  for  it  may  be  based  on  the 
failure  of  consideration,  the  invalidity  of  the  patent,  fraudulent 
representations,  or  other  causes. 

The  judgment  of  non-suit  entered  in  the  Court  of  Common  Pleas 
will  be  affirmed. 


538  COMFORT  V.   GRAHAM.  [CHAP.   XV. 

3.    Liability  of  Agent  who  Acts  for  Fictitiotis  Principal. 
COMFORT   V.    GRAHAM. 

87  Iowa,  295.     1893. 

Action  for  services  rendered  as  attorney.  Judgment  for  defendant. 

Defendant,  in  behalf  of  an  unincorporated  society,  engaged  plain- 
tiff to  perform  services  as  an  attorney.  The  facts  appear  in  the 
opinion. 

KiNNE,  J.  ...  It  is  insisted  that,  in  making  the  contract  with 
the  plaintiff,  the  defendant  was  acting  in  a  representative  capacity 
only,  and  hence  is  not  personally  liable.  It  appears  that  the  plaintiff 
was  a  member  of  the  order,  and  knew  that  the  defendant  was  acting 
in  behalf  of  the  branch  of  the  order  in  Iowa,  of  which  he  was  then 
the  head,  and  it  is  true  that  the  defendant,  in  writing  the  plaintiff 
about  the  work  he  w£is  to  do,  expressed  the  hope  that  he  (plaintiff) 
*'  would  consider  it  a  labor  of  love.''  But  the  plaintiff  in  his  reply 
says :  "  My  labors  of  love  are  somewhat  extensive  here,  but  will  do 
the  best  I  can  in  part,  and  you  can  send  me  the  balance  if  you  re- 
cover." The  plaintiff  did  not  charge  full  value  for  his  services. 
Except  the  defendant's  naked  statement  in  his  testimony  that  he  was 
acting  in  the  matter  in  a  representative  capacity,  we  find  no  evidence 
whatever  to  justify  the  contention  that  such  was  the  arrangement 
or  understanding  between  the  plaintiff  and  the  defendant.  It  ap- 
pears to  us,  also,  that  if  the  defendant  sought,  as  he  did,  to  shield 
himself  from  personal  liability  because  the  contract  for  services  was 
made  in  a  representative  capacity,  it  was  incumbent  on  him  to  estab- 
lish that  fact.  He  has  not  done  so.  On  the  contrary,  we  think  it 
clearly  appears  that  the  order  which  the  defendant  claimed  to  repre- 
sent was  an  unincorporated,  voluntary  association,  and  hence  he 
represented  no  principal  which  the  law  recognized;  hence,  if  it  be 
conceded  that  the  defendant  undertook  to  act  for  such  an  association, 
he  is  personally  liable.  Lewis  v.  Tilton,  64  Iowa,  220;  Reding  v. 
Anderson,  72  Iowa,  498. 

It  is  true  that  the  judgment  in  this  case  stands  as  the  verdict  of 
a  jury,  and  cannot  be  disturbed  if  it  finds  support  in  the  evidence. 
We  are  unable,  however,  to  see  that  the  defendant  has  established 
any  of  his  claims,  and  the  judgment  must  be  Reversed.^ 

»  See  also  In  re  Northumberland  Ave.  Hotel,  L.  R.  33  Ch.  D.  16,  ante,  p.  57; 
McArthur  v.  Times  Printing  Co.,  48  Minn.  319,  ante,  p.  59 ;  Western  Pub.  House  v. 
District  Tp.  of  Rock,  84  Iowa,  101,  ante,  p.  62. 


CHAP.   XV.]  EXCLUSIVE   CREDIT   TO   AGENT.  539 

4.    Rights  and  Liahilities  of  Agent  where  Credit  is  extended  to 

him  exclusively. 

KELLY   V.   THUEY. 

102  Mo.  522.     1890. 

Action  for  specific  performance  of  a  contract  brought  by  James 
T.  Kelly  against  defendant.     Judgment  for  plaintiff. 

The  contract  was  made  and  executed  by  defendant  and  D.  T. 
Kelly  for  the  sale  and  purchase  of  land.  Plaintiff  claimed  to  be  the 
real  party  in  interest,  and  as  such  offered  to  perform  the  contract, 
and  demanded  a  deed.  Defendant  had  no  knowledge  of  the  interest 
of  plaintiff  in  the  contract. 

Black,  J.  .  .  .  We  must  take  this  verified  answer  as  an  admission 
that  Thuey  knew  D.  T.  Kelly  was  buying  the  property  for  an  un- 
named person.  The  other  evidence  shows  that  he  was  acting  for 
plaintiff,  but  this  Thuey  did  not  know.  The  contract  was  taken  in 
the  name  of  the  agent  by  the  directions  of  the  plaintiff,  for  he  had 
it  prepared.  Under  these  circumstances  can  the  plaintiff  compel 
specific  performance? 

Where,  as  here,  the  contract  is  not  under  seal,  if  it  can  be  gathered 
from  the  whole  instrument  that  one  party  acted  as  agent,  the  prin- 
cipal will  be  bound,  or  he  may  sue  thereon  in  his  own  name.  Indeed, 
if  the  instrument  is  so  uncertain  in  its  terms  as  to  leave  it  in  doubt 
whether  the  principal  or  agent  is  to  be  bound,  such  uncertainty  may 
be  obviated  by  the  production  of  parol  evidence.  Hartzell  v.  Crumb, 
90  Mo.  630 ;  Klostermann  v.  Loos,  58  Mo.  290.  But  these  principles 
cannot  aid  the  plaintiff  in  this  case,  for  there  is  nothing  whatever 
on  the  face  of  this  contract  to  show  that  D.  T.  Kelly  acted  as  agent 
for  any  one. 

The  plaintiff  insists  that  a  much  more  comprehensive  doctrine 
should  be  applied,  and  he  refers  to  the  often  cited  case  of  Higgins 
V.  Senior,  8  M.  &  W.  834,  which  was  a  contract  for  the  sale  of  goods. 
The  question  presented  there  was,  whether  the  defendant  could  dis- 
charge himself  by  proving  that  the  agreement,  though  made  in  his 
own  name,  was  really  made  by  him  as  the  agent  of  a  third  person, 
and  that  this  was  known  to  the  plaintiff  when  the  contract  was  signed. 
*'  There  is  no  doubt,"  says  the  court,  "  that,  where  such  an  agreement 
is  made,  it  is  competent  to  show  that  one  or  both  of  the  contracting 
parties  were  agents  for  other  persons,  and  acted  as  such  agents  in 
making  the  contract  so  as  to  give  the  benefit  of  the  contract  on  the 
one  hand  to,  and  charge  with  liability  on  the  other,  the  unnamed 
principal ;  and  this,  whether  the  agreement  be  or  be  not  required  to 
be  in  writing  by  the  Statute  of  Frauds." 


040  KELLY  V.   THUEY.  [CHAP.   XV. 

Such  proof,  it  is  said,  does  not  violate  the  rule  of  law  which  says, 
parol  evidence  will  not  be  received  to  vary  the  terms  of  a  written 
contract,  because  it  only  shows  that  the  agreement  binds  another 
person  by  reason  of  the  act  of  the  agent  in  signing  the  agreement 
pursuant  to  his  authority.  The  doctrine  of  that  case  has  been  quoted 
with  approval  by  this  court  on  two  occasions.  Briggs  v.  Munchon, 
56  Mo.  467;  Higgins  v.  Dellinger,  22  Mo.  397.  The  following,  and 
many  other  authorities,  are  to  the  same  effect:  Story  on  Agency 
(9th  ed.),  §  160  a;  Whart.  on  Agents,  §  403;  Fry  on  Spec.  Perf. 
§  148;  Huntington  v.  KJiox,  7  Cush.  371;  Briggs  v.  Partridge, 
64  N.  Y.  357. 

This  broad  doctrine,  that,  when  an  agent  makes  a  contract  in  his 
own  name  only,  the  known  or  unknown  principal  may  sue  or  be  sued 
thereon,  may  be  applied  in  many  cases  with  safety,  and  especially 
in  cases  of  informal  commercial  contracts.  But  it  is  certain  that 
it  cannot  be  applied  where  exclusive  credit  is  given  to  the  agent, 
and  it  is  intended  by  both  parties  that  no  resort  shall  be  had  by  or 
against  the  principal  (Story  on  Agency,  §  160  a),  nor  does  it  apply 
to  those  cases  where  skill,  solvency,  or  any  personal  quality  of  one 
of  the  parties  to  the  contract  is  a  material  ingredient  in  it.  Fry 
on  Spec.  Perf.  §  149. 

Now,  in  this  case,  the  written  contract  is  full,  complete,  and 
formal.  It  expresses  just  what  the  parties  thereto  intended  it  should 
express.  The  plaintiff  had  it  prepared,  and  must  be  taken  to  have 
directed  it  to  be  made  in  the  name  of  D.  T.  Kelly  and  not  in  his 
own  name.  In  short,  the  contract  is  one  between  Thuey  and  D.  T. 
Kelly,  and  was  so  intended  by  all  the  parties.  It  contains  agree- 
ments to  be  performed  by  both  parties.  Thuey  agreed  to  sell  the 
land  to  D.  T.  Kelly,  and  agreed  to  take  the  latter's  notes  and  deed 
of  trust  for  the  deferred  payments.  He  did  not  agree  to  take  the 
notes  and  deed  of  trust  of  the  plaintiff  for  the  deferred  payments. 
To  admit  parol  evidence  to  show  that  D.  T.  Kelly  acted  as  an  agent 
of  the  plaintiff,  and  then  substitute,  or  add,  the  plaintiff  as  a  party, 
is  simply  to  make  a  new  contract  for  the  parties.  To  say  that  the 
admission  of  such  evidence  does  not  alter  the  written  contract,  in 
a  case  like  the  one  in  hand,  is  a  doctrine  too  subtle  and  refined  to 
be  comprehended.  D.  T.  Kelly  contracted  for  the  warranty  deed 
of  Thuey,  and  he  is  entitled  to  Thuey^s  covenant  of  warranty,  and 
could  not  be  required  to  take  the  covenants  of  some  person  to  whom 
Thuey  should  sell  the  properly.  Steiner  v.  Zwickey,  43  N.  W. 
Rep.  376. 

So,  on  the  other  hand,  Thuey  contracted  for,  and  is  entitled  to 
have,  the  notes  and  deed  of  trust  of  D.  T.  Kelly,  and  he  cannot  be 
compelled  to  take  the  notes  of  another  person.  Whatever  the  rights 
may  be  as  between  the  Kellys,  the  plaintiff  is  not  a  party  to  the 
contract  with  Thuey,  and  he  cannot  enforce  specific  performance 


CHAP.   XV.}  EXCLUSIVE  CREDIT  TO  AGENT.  541 

of  it,  and  thereby  compel  Thuey  to  accept  his  obligations  for  the 
deferred  payments. 

The  right  to  enforce  specific  performance  of  this  contract  exists 
in  D.  T.  Kelly,  and  not  the  plaintiff.  D.  T.  Kelly  must  make  the 
note  and  deed  of  trust,  and  to  that  end  the  title  must  be  vested  in 
him,  and  he  is,  therefore,  a  necessary  and  indispensable  party  to 
this  suit. 

The  judgment  is,  therefore,  reversed  and  the  cause  remanded. 
All  concur.^ 


CLEVELAND   v.   PEARL   &   CO. 

63  Vt.  127.     1890. 

Assumpsit  for  the  price  of  wool.  The  wool  was  sold  to  defendants 
who  directed  that  it  be  delivered  to  one  Hoyt,  and  gave  Hoyt  thel 
money  with  which  to  pay  for  it.  Upon  delivery  to  Hoyt,  he  paid 
plaintiff  part  cash  and  gave  his  own  check  for  the  balance.  The 
check  was  dishonored.  Meantime  defendants  had  settled  various 
accounts  with  Hoyt  paying  him  a  balance  greater  than  the  amount 
of  this  check.    Judgment  for  plaintiff. 

RowELL^  J.  It  not  having  been  found  how  it  was  in  fact,  this 
was  in  law  a  sale  for  cash  on  delivery.  And  it  is  manifest  that  the 
parties  so  understood  it ;  for  the  defendants  put  Ho}i;  in  funds  where- 
with to  pay  on  delivery,  and  the  plaintiff  called  for  payment  in  money 
when  he  delivered.  And  when  he  found  that  he  could  not  get  cash 
in  full  according  to  his  right  he  had  an  option  not  to  deliver  at  all. 
But  he  chose  to  deliver  notwithstanding,  and  take  Hoyt's  check, 
payable  to  himself,  for  the  unpaid  balance,  in  the  giving  of  which 
Hoyt  was  not  defendant's  agent,  for  he  was  acting  outside  the  scope 
of  his  authority,  which  was,  to  pay  cash  down,  and  the  plaintiff 
ought  to  have  known  it ;  but  if  he  did  not,  the  law  will  treat  him  just 
as  though  he  did,  for  he  who  deals  with  an  agent  having  only  a  special 
and  limited  authority,  is  bound  at  his  peril  to  know  the  extent  of  his 
authority.  White  v.  Langdon,  30  Vt.  599;  Sprague  v.  Train, 
34  Vt.  150. 

By  taking  the  check  in  the  circumstances  disclosed,  agreeing  for 
his  own  convenience  for  delay  in  presenting  it,  and  subsequently 
parting  with  it  in  payment  of  his  debt,  the  defendants  having  been 
prejudiced,  if  liable  here,  by  paying  their  debt  to  Hoyt  in  the  mean- 
time, when,  had  they  known  how  it  was  they  could  have  paid  the 

>  In  Heffron  v.  Pollard,  73  Tex.  96,  it  was  held  that  where  a  contract  was  made 
in  the  name  of  John  W.  Fry  (a  real  person)  and  was  signed  "  John  W.  Fry,  per 
Heffron,"  parol  evidence  would  not  be  heard  to  show  that  Heffron  signed  (or  his  own 
l>enefit  and  intending  to  bind  himself. 


542  KAULBACK  V.   CHUECHILL.  [CHAP.   XV. 

plaintiff  and  saved  themselves,  —  the  plaintiff  must  be  deemed  to 
have  made  the  check  his  own,  and  to  have  accepted  the  credit  and 
responsibility  of  Hoyt  instead  of  that  of  the  defendants,  and  to 
liave  discharged  the  latter.  In  other  words,  Hoyt's  check  paid  the 
debt  as  between  these  parties. 

The  plaintiff  stands  no  better  than  he  would  had  he  taken  the 
check  in  preference  to  the  money,  or  had  given  a  receipt  acknowl- 
edging payment,  when  he  would  certainly  have  discharged  the 
defendants,  for  so  are  all  the  authorities. 

The  case  is  not  like  those  in  which  the  plaintiff  had  no  option 
and  could  do  no  better  than  to  take  a  bill  or  a  note,  and  no  injury 
resulted  to  the  defendant  in  consequence  of  taking  it.  In  such  case 
the  check  is  a  conditional  and  not  an  absolute  payment.  Robinson 
V.  Eead,  9  B.  &  C.  449,  is  of  that  class. 

But  here  was  no  antecedent  debt,  and  the  plaintiff  had  the  staff 
in  his  own  hands,  and  might  have  kept  his  wool;  but  he  chose  to 
deliver  it  and  to  take  Hoyt's  check  for  it,  without  authority  from 
the  defendants  or  notice  to  them,  and  he  has  no  standing  to  claim 
that  the  check  was  only  conditional  payment. 

Judgment  reversed  and  cause  remanded.^ 

EoYCE^  C.  J.,  being  indisposed,  did  not  sit. 


5.    LiabilUy  of  Agent  who  Acts  for  a  Foreign  Principal. 
KAULBACK   v.    CHUECHILL. 

59  N.  H.  296.     1879. 

Assumpsit  for  apples  sold  and  delivered.  The  defendant,  residing 
in  this  state,  was  the  agent  of  A.  &  0.  W.  Mead  &  Co.,  a  firm  doing 
business  in  Boston,  and  all  its  members  resident  in  Massachusetts. 
At  the  time  of  the  sale  of  the  apples,  the  plaintiff  was  informed  and 
knew  that  the  defendant  was  acting  as  agent  of  the  firm.  A  referee 
found  for  the  defendant. 

Clark,  J.  "  If  a  duly  authorized  agent  uses  such  terms  as  legally 
import  an  undertaking  by  the  principal  only,  the  contract  is  that 
of  the  principal,  and  he  alone  is  the  party  by  whom  it  is  to  be  per- 
formed." Met.  on  Cont.  106.  Whether  the  defendant  assumed 
a  personal  liability  in  making  the  contract  is  a  question  of  fact,  which 
has  been  determined  by  the  finding  of  the  referee.  Noyes  v.  Patrick, 
68  N.  H.  618.    The  fact  that  the  firm  of  A.  &  0.  W.  Mead  were 

>  See  Paige  v.  Stone,  10  Met.  (Mass.)  160 ;  Merrell  v.  Witherby,  120  Ala.  418 ; 
Gates  V.  Brower,  9  N.  Y.  205 ;  Coleman  v.  Bank,  53  N.  Y.  388  ;  Atlas  S.  S.  Co.  v. 
Columbian  Land  Co..  102  Fed.  Rep.  358. 


CHAP.   XV.]      LIABILITY   ON   NEGOTIABLE   INSTRUMENT.  543 

residents  of  Massachusetts,  doing  business  there,  is  not  of  itself 
a  ground  for  holding  the  defendant  personally  liable.  "  The  present 
doctrine  is,  that  when  the  terms  of  a  contract  made  by  an  agent  are 
clear,  they  are  to  have  the  same  construction  and  legal  effect,  whether 
made  for  a  domestic  or  for  a  foreign  principal."  Met.  on  Cont.  111. 
The  statement  cited  by  the  plaintiff  from  Story,  Agency,  §  268,  is 
not  now  recognized  as  the  law,  excepting,  perhaps,  in  Maine  and 
Louisiana.  Met.  on  Cont.  Ill;  Bray  v.  Kettell,  1  Allen,  80;  Kirk- 
patrick  V.  Stanier,  22  Wend.  344;  Oelricks  v.  Ford,  23  How.  49. 

Judgment  for  the  defendant. 


6.    Liability  of  Agent  who  Contracts  in  his  own  Name  in  an  Instrw 

ment  under  Seal. 

BRIGGS   V.   PARTEIDGE. 

64  N.  Y.  357.     1876. 
[Reported  herein  at  page  410.] 


7.    Liability  of  an  Agent  who  Contracts  in  his  own  Name  in  a 
Negotiable  Instrument. 

a.   Construction  from  Signature  Alone. 

RENDELL   v.   HARRIMAN   et   al. 
75  Me.  497.     1883. 

Assumpsit  upon  the  following  promissory  note. 

The  plea  was  the  general  issue  with  brief  statement  that  the  instru- 
ment declared  on  was  the  note  of  the  Prospect  and  Stockton  Cheese 
Company. 

[Note.] 
-     $246.50  Stockton,  October  19,  1878. 

For  value  received,  we  promise  to  pay  S.  A.  Rendell,  or  order,  two  hundred 
forty-six  and  fifty  one-hundreths  dollars,  in  one  year  from  date,  with  interest. 


Otis  Harbiman, 
R.  M.  Tbevett, 
L.  Mudgett, 
W.  H.  GiNN, 


President. 
Directors  of 
Prospect  and  Stockton 
Cheese  Company. 


644  RENDELL  V.   HARRIMAN   ET   AL.  [CHAP.   XV. 

Defendants  offered  to  show  that  they  signed  the  above  instrument 
as  duly  authorized  agents  of  the  Prospect  and  Stockton  Cheese  Com- 
pany; that  plaintiff  knew  that  fact  when  he  accepted  the  note;  that 
a  payment  had  been  made  thereon  by  the  company  and  receipted  for 
by  plaintiff;  and  that  the  note  was  for  a  balance  due  plaintiff  for 
machinery  purchased  by  the  company  from  plaintiff  and  paid  for  by 
the  company  save  for  this  balance.  If  this  evidence  is  admissible  the 
action  is  to  stand  for  trial ;  otherwise  defendants  are  to  be  defaulted. 

Danfoeth,  J.  All  the  questions  which  have  been  or  can  be  raised 
in  this  case  growing  out  of  the  common  law,  as  well  the  purpose  and 
effect  of  K.  S.  c.  73,  §  15,  were  raised  and  fully  discussed  and  settled 
in  Sturdivant  v.  Hull,  59  Me.  172.  A  case  so  well  considered  and 
80  fully  sustained  by  the  authorities  as  that  would  seem  to  be  deci- 
sive of  all  the  questions  involved  and  would  undoubtedly  have  been 
so  considered,  but  for  a  hope  raised  by  what  is  claimed  "  as  a  modi- 
fication of  the  rule  established  by  it,  in  Simpson  v.  Garland,  72  Me. 
40,  following  a  more  liberal  construction  of  the  statute  in  Nobleboro* 
V.  Clark,  68  Me.  87."  But  upon  a  review  of  Sturdivant  v.  Hull, 
we  see  no  occasion  to  depart  from  its  teachings,  nor  do  we  perceive 
any  modification  of  its  doctrine  in  any  case  which  follows.  On  the 
other  hand,  Mellen  v.  Moore,  68  Me.  390,  "is  exclusively  based" 
upon  it;  it  is  referred  to  as  authority  in  Nobleboro'  v.  Clark,  and  is 
followed  in  the  still  later  case  of  Eoss  v.  Brown,  74  Me.  352;  nor 
do  we  find  anything  inconsistent  with  it  in  Simpson  v.  Garland. 
In  the  latter  case  the  note  contained  language  purporting  to  show 
-that  the  promise  was  that  of  the  principal  and  which  the  court  held 
did  show  it;  while  in  Sturdivant  v.  Hull,  no  such  language  is  used. 
True,  in  the  case  of  Eoss  v.  Brown,  it  is  suggested  that  it  does  not 
appear  that  the  maker  of  the  note  had  any  authority  to  bind  the 
town;  but  from  the  opinion  it  clearly  appears  that  the  liability  is 
fixed  upon  the  agent  by  force  of  the  terms  of  the  contract  and  not 
by  any  extraneous  evidence,  or  the  want  of  it.  In  Nobleboro'  v. 
Clark,  the  contract  was  set  up  as  binding  upon  the  principal,  and 
was  so  held  because  by  its  terms  it  appeared  that  such  was  the  in- 
tention of  the  agent,  and  such  being  the  intention,  it  was  necessary 
with  or  without  the  statute  to  show  the  authority  of  the  agent  before 
the  contract  could  be  regarded  as  that  of  the  principal.  The  action 
at  bar  is  against  the  alleged  agents,  and  as  suggested  in  Sturdivant 
V.  Hull,  whatever  may  be  the  effect  of  the  statute  in  "extending 
a  liability  to  the  real  party  in  interest  and  affording  a  remedy  against 
him,  it  cannot  be  so  construed  as  to  discharge  one  who,  for  a  suffi- 
cient consideration,  has  expressly  assumed  a  liability  by  means  of 
a  written  contract,  or  to  allow  proof  aliunde  for  that  purpose."  Nor 
do  we  find  any  case  at  common  law  to  go  so  far.  All  the  authorities, 
including  those  cited  by  the  defendant  in  this  case,  concur  in  holding 
that  the  liability  of  the  one  party  or  the  other  must  be  ascertained 


CHAP.   XV.]       LIABILITY   ON    NEGOTIABLE   INSTRUMENT.  545 

from  the  terms  of  the  written  instrument,  and  parol  proof  cannot 
be  received  to  vary  or  control  such  terms. 

That  an  agent  may  make  himself  responsible  for  his  principaFs 
debt  is  beyond  doubt.  That  the  defendants  in  this  case  have  done 
so  by  the  terms  of  the  note  in  suit,  uncontrolled  by  extraneous  evi- 
dence, is  settled  by  the  uniform  decisions  in  this  state,  supported, 
as  shown  in  Sturdivant  v.  Hull,  by  the  weight  of  reason,  as  well  as 
of  authority  elsewhere. 

The  evidence,  then,  offered,  if  admitted,  would  not  avail  the  de- 
fendants unless  it  had  the  effect  to  discharge  them  from  a  contract 
into  which  they  have  entered. 

It  is  true,  that  in  the  cases  cited,  such  evidence  was  admitted  and 
was  perhaps  admissible,  under  the  well  established  rule  of  law,  that 
when  there  is  an  ambiguity  in  the  contract,  when  the  language  used 
is  equally  susceptible  of  two  different  constructions,  evidence  of  the 
circumstances  by  which  the  parties  were  surrounded  and  under  which 
the  contract  was  made  may  be  given,  not  for  the  purpose  of  proving 
the  intention  of  the  parties  independent  of  the  writing,  but  that  the 
intention  may  be  more  intelligently  ascertained  from  its  terms.  But 
to  make  this  evidence  admissible  some  ambiguity  must  first  appear; 
there  must  be  language  used  such  as  may,  without  doing  violence 
to  its  meaning,  be  explained  consistently  with  the  liability  of  either 
party,  some  language  which,  as  in  Simpson  v.  Garland,  tends,  in  the 
words  of  the  statute,  to  show  that  the  contract  was  made  by  the 
agent  "  in  the  name  of  the  principal,  or  in  his  own  name  for  his 
principal." 

In  this  case  no  such  ambiguity  exists,  no  such  language  is  used. 
The  promise  is  that  of  the  defendants  alone  without  anything  to 
indicate  that  it  was  for  or  in  behalf  of  another.  True,  the  defend- 
ants affixed  to  their  names  their  official  title,  with  the  name  of  the 
corporation  in  which  they  held  office,  but  nothing  whatever  to  qualify 
their  promise  or  in  the  slightest  degree  to  show  it  other  than  their 
own.  The  statute  as  well  as  the  decisions,  with  few  exceptions, 
as  we  have  seen,  requires  more  than  this  to  make  the  testimony 
admissible.    Bray  v.  Kettell,  1  Allen,  80. 

Defendants  defaulted  for  the  amount  of  the  note  and  interest. 


35 


546  KEIDAN   V.   WINEGAE.  [CHAP,  X7. 

KEIDAN   V.   WINEGAE. 

95  Mich.  430.     1893. 

McGeath,  J.  Plaintiff  had  judgment  upon  the  following  promis- 
ory  note: 

"  $336.96-100.  Grand  Rapids,  Mich.,  December  22,  1887. 

"  Ninety  days  after  date,  I  promise  to  pay  to  the  order  of  Geo.  Keidan 
three  hundred  thirty-six  and  96-100  dollars  at  the  Old  National  Bank  of  Grand 
Kapids,  Mich.,  value  received,  with  inte]:est  at  the  rate  of  eight  per  cent,  per 
annum  until  paid. 

"  W.  S.  WiNEGAB,  Agt." 

Defendant,  with  his  plea,  filed  an  affidavit  setting  forth  — 

"  That  the  note,  a  copy  of  which  is  attached  to  the  declaration  in 
said  cause,  and  served  upon  said  deponent  with  a  copy  of  said  declara- 
tion, is  not  the  note  of  this  deponent,  defendant  as  aforesaid;  and 
he  denies  the  same  and  the  execution  thereof,  and  says  that  he,  said 
defendant,  is  not  indebted  to  said  plaintiff  upon  said  note,  nor  for 
any  part  thereof,  nor  is  he  indebted  to  said  plaintiff  in  any  sum 
whatever,  nor  in  any  manner  whatever." 

Upon  the  trial  defendant  offered  to  show  that  in  1884,  before  plain- 
tiff had  any  dealings  with  defendant,  plaintiff  was  informed  that 
defendant  was  carrying  on  business  as  the  agent  of  Maggie  G.  Wine- 
gar,  and  was  not  doing  business  for  himself;  that  business  relations 
were  then  established  between  plaintiff  and  said  Maggie  G,  Wine- 
gar;  that  said  business  relations  continued  from  the  early  part  of 
1884  to  and  including  the  year  1887,  and  embraced  many  trans- 
actions between  plaintiff  and  Maggie  G.  Winegar;  that  many  instru- 
ments were  made  between  the  parties,  which  were  signed  exactly 
as  the  note  sued  upon  is  signed,  and  that  this  form  of  execution  had 
come  to  be  recognized  and  adopted  between  the  parties  as  binding 
Maggie  G.  Winegar ;  that  during  that  time  no  business  was  transacted 
by  the  defendant  in  his  individual  capacity,  and  all  the  business  done 
was  that  of  his  principal,  and  known  and  understood  to  be  such  by 
plaintiff ;  that  the  said  note  was  given  and  accepted  as  the  obligation 
of  Maggie  G.  Winegar;  that  the  note  was  given  for  due-bills  and 
goods  furnished  by  plaintiff  to  Maggie  G.  Winegar,  and  such  due- 
bills  and  goods  were  by  plaintiff  charged  to  said  Maggie  G.  Winegar 
on  the  books  of  plaintiff;  that  the  taking  of  these  notes  did  not  in 
the  least  change  the  character  of  the  indebtedness;  and  that  defend- 
ant never  received  any  benefit  or  consideration  for  said  note.  The 
court  refused  to  admit  the  testimony,  and  directed  a  verdict  for 
the  plaintiff. 

The  clear  weight  of  authority  is  that  the  promise  in  the  present 
case  is  prima  facie  the  promise  of  William  S.  Winegar,  and,  as  be- 


CHAP.   XV.]      LIABILITY  ON   NEGOTIABLE  INSTRUMENT.  547 

tween  one  of  the  original  parties  and  a  third  party,  the  addition  of 
the  word  "  agent "  is  not  sufficient  to  put  such  third  party  upon 
inquiry.  The  question  here,  however,  is  whether,  as  between  the 
inmiediate  parties  to  the  instrument,  parol  evidence  is  admissible 
to  show  the  real  character  of  the  transaction. 

[The  court  then  quotes  §  443  of  Mechem  on  Agency,  cites  1  Amer. 
&  Eng.  Enc.  Law,  390,  391,  and  cites  and  quotes  from  Metcalf 
V.  Williams,  104  U.  S.  93,  98,  and  Kean  v.  Davis,  21  N.  J.  L. 
683,  687.] 

In  Hicks  v.  Hinde,  9  Barb.  528,  where  an  agent  drew  a  bill  on 
his  principal  for  a  debt  due  from  the  principal  to  the  payee,  adding 
the  word  "  agent "  to  his  signature,  and  the  payee  knew  that  the 
drawer  was  authorized  by  his  principal  to  draw  the  bill  as  his  agent, 
and  it  was  the  understanding  of  all  parties  that  the  drawer  had 
signed  only  as  agent,  and  not  with  a  view  of  binding  himself,  it  was 
held  that  the  drawer  was  not  personally  liable  on  the  bill. 

To  the  rule  that  extrinsic  evidence  cannot  be  received  to  contradict 
or  vary  the  terms  of  a  valid  instrument,  there  are  many  exceptions. 
As  between  the  original  parties,  the  consideration  may  be  impeached ; 
fraud  or  illegality  in  its  inception  may  be  shown.  It  may  be  shown 
that  the  note  was  delivered  conditionally,  or  for  a  specified  purpose, 
only ;  that  it  was  made  for  accommodation,  merely.  And  it  has  been 
held  that  if,  by  mistake,  one  party  indorses  before  another,  such 
mistake  may  be  shown  to  relieve  him  from  his  apparent  liability; 
that  a  party  who  indorses  his  name  upon  the  back  of  a  note  may  be 
maker  or  indorser,  dependent  upon  parol  proof  as  to  when  he  placed 
his  signature;  that,  although  the  legal  effect  of  successive  indorse- 
ments is  to  make  the  indorsers  liable  to  each  other  in  the  order  of 
time  in  which  they  signed  their  names,  yet  such  legal  effect  may  be 
rebutted  by  parol  proof  that  all  were  accommodation  indorsers,  and, 
by  agreement  among  themselves,  co-sureties;  that  the  fact  of  a  note 
being  Joint  and  several  does  not  exclude  proof  that  one  of  the  signers 
was  a  surety,  merely,  and,  where  the  creditor  knew  of  the  fact  of 
suretyship,  an  extension  of  time,  for  a  consideration,  without  the 
consent  of  such  surety,  released  the  surety.  Stevens  v.  Oaks,  58  Mich. 
343 ;  Farwell  v.  Ensign,  66  Id.  600. 

In  Hubbard  v.  Gurney,  64  N.  Y.  463,  Chief  Justice  Church  says 
[quoting  a  passage]  : 

As  is  so  often  said,  it  is  the  intent  of  the  parties  which  is  to  be 
carried  out  by  the  courts.  The  rule  that  rejects  words  added  to  the 
signature  is  an  arbitrary  one.  Its  reason  is  not  so  much  that  the 
words  are  not,  or  may  not  be,  suggestive,  but  that  they  are  but 
suggestive,  and  the  instrument,  as  a  whole,  is  not  sufficiently  com- 
plete to  point  to  other  parentage.  The  very  suggestiveness  of  these 
added  words  has  given  rise  to  an  irreconcilable  confusion  in  the 
authorities  as  to  the  legal  effect  of  such  an  instrument.     Extrinsic 


548  KEIDAN   V.    WINEGAR.  [CHAP.    XV. 

evidence,  therefore,  is  admissible  in  such  case,  between  the  immediate 
parties,  to  explain  a  suggestion  contained  on  the  face  of  the  instru- 
ment and  to  carr}'  out  the  contract  actually  entered  into  as  suggested, 
but  not  fully  shown,  by  the  note  itself.  The  presumption  that  per- 
sons dealing  with  negotiable  instruments  take  them  on  the  credit  of 
the  parties  whose  names  appear  should  not  be  absolute  in  favor  of 
the  immediate  payee,  from  whom  the  consideration  passed,  who  must 
be  deemed  to  have  known  all  the  facts  and  circumstances  surrounding 
the  inception  of  the  note,  and  with  such  knowledge  accepted  a  note 
containing  such  a  suggestion. 

In  the  case  of  Tilden  v.  Barnard,  43  Mich.  376,  under  a  state  of 
facts  similar  to  those  offered  to  be  shown  here,  it  was  held  that 
defendants  were  not  liable. 

We  think  that  in  the  present  case  defendant  was  entitled  to  make 
the  showing  offered.  Under  the  general  issue,  defendant  was  entitled 
to  give  in  evidence  any  matter  of  defence  going  to  the  existence  of 
any  promise  having  legal  force,  as  against  him.  1  Shinn,  PI.  & 
Pr.  §  740. 

The  judgment  is  reversed,  and  a  new  trial  ordered. 

The  other  Justices  concurred.^ 

Western  Wheeled  Scraper  Co.  v.  McMillen,  71  Neb.  686. 
1904.  Action  on  a  note  signed  "  J.  M.  McMillen,  G.  W.  Miller, 
G.  L.  Matthews,  Directors  of  Thedford  Irrigation  &  Power  Co."  and 
reading  "  we  promise  to  pay  to  the  Western  Wheeled  Scraper  Co.,  or 
order." 

DuFFiE,  C.  ...  It  is  undoubtedly  true  that  the  modern  cases 
are  more  liberal  than  was  formerly  the  case  in  allowing  one  who 
signs  a  negotiable  instrument,  designating  himself  as  agent  or 
trustee,  to  show  by  parol  evidence  that  he  was  acting  for  another, 
who  received  all  the  benefits  of  the  consideration  for  which  the  note 
was  given.  Keidan  v.  Winegar,  95  Mich.  430,  54  N.  W.  501, 
20  L.  E.  A.  705,  is  a  case  in  point,  and  other  cases  referred  to  in 
the  notes  of  the  editor  will  furnish  examples  of  the  relaxation  of 
the  rule  adopted  by  the  courts  at  an  earlier  date  upon  this  question. 
If  this  court  had  not  put  itself  on  record,  we  should  be  disposed  to 
follow  the  modem  decisions,  but  as  early  as  1886,  in  Webster  v. 
Wray,  19  Neb.  558,  27  N.  W.  644,  56  Am.  Eep.  754,  the  court,  after 
a  full  review  of  the  authorities,  held  that  "no  party  can  be  charged 
as  principal  upon  a  negotiable  note  or  bill  of  exchange  unless  his 
name  is  thereon  disclosed ; "  and  it  was  further  held  in  that  case 
that  parol  evidence  was  not  admissible  to  show  that  one  who  appeared 
upon  the  face  of  the  notes  to  be  the  maker  was  in  fact  acting  as 
agent  for  another,  or  as  the  officer  of  some  corporation  who  had 
received  the  benefit  of  the  consideration.     This  case  was  followed 

*  This  case  Is  quite  fully  annotated  In  20  L.  B.  A.  705. 


CHAP.   XV.]      LIABILITY   ON   NEGOTIABLE   INSTRUMENT.  549 

by  Andres  v.  Kridler,  47  Neb.  585,  66  N.  W.  649,  where  suit  was 
brought  upon  a  note  made  and  signed  substantially  in  the  manner 
of  those  in  suit,  and  it  was  held  that,  "  where  the  pleadings  disclose 
a  cause  of  action  against  a  defendant  personally,  superadded  words, 
such  as  '  agent,'  '  executor,'  or  '  director,'  should  be  rejected  as 
descriptio  personce."  We  think  this  court  is  now  fully  committed 
to  the  doctrine  that,  in  order  to  exempt  an  agent  from  liability  upon 
an  instrument  executed  by  him  within  the  scope  of  his  agency,  he 
must  not  only  name  his  principal,  but  he  must  express  by  some  form 
of  words  that  the  writing  is  the  act  of  the  principal,  though  done 
by  the  hand  of  the  agent.  If  he  expresses  this,  the  principal  is 
bound,  and  the  agent  is  not.  But  a  mere  description  of  the  general 
relation  or  office  which  the  person  signing  the  paper  holds  to  another 
person  or  to  a  corporation  without  indicating  that  the  particular 
signature  is  made  in  the  execution  of  the  office  and  agency,  is  not 
sufficient  to  charge  the  principal  or  to  exempt  the  agent  from 
personal  liability.  .  .  . 


KANSAS    NATIONAL   BANK   v.   BAY. 
62  Kans.  692.     1901. 

Action  on  a  negotiable  promissory  note  payable  to  the  order  of 
W.  W.  Graves  &  Co.,  and  signed  "  H.  K.  Sloan,  by  C.  M.  Bay,  attor- 
ney in  fact."  The  plaintiff  was  informed  when  it  first  discounted 
the  note  that  Bay  was  doing  business  in  the  name  of  Sloan  under  a 
power  of  attorney;  that  he  could  not  do  business  in  his  own  name 
because  of  indebtedness  held  against  him.  Upon  a  renewal  the  bank 
tried  to  induce  Bay  to  assume  personal  responsibility  on  the  note  by 
signing  his  own  name,  but  Bay  refused  to  do  so.  There  is  no  ques- 
tion but  that  the  transaction  for  which  the  note  was  given  was  Bay's 
individual  business.    Judgment  for  defendant. 

DosTER,  C.  J.  .  .  .  The  plaintiff  in  error  contends  that  Bay  is 
liable,  because,  as  it  says,  the  name  of  Sloan  was  a  trade  name  adopted 
by  Bay  for  the  transaction  of  his  own  business,  and,  inasmuch  as 
the  giving  of  the  note  was  his  own  business,  he  is  liable  on  it  as 
though  executed  in  his  own  name.  There  are  authorities  to  the  effect 
that  one  who,  for  his  own  purposes,  adopts  the  name  of  another,  will 
be  held  liable  in  a  transaction  of  his  own  conducted  thereunder. 
We  have  no  occasion  to  question  the  soundness  of  these  authorities. 
We  think,  however,  that  they  are  limited  to  cases  where  it  appeared 
that,  under  the  name  of  another  as  a  trade  name,  the  party  contracted 
to  bind  himself  and  not  the  other;  and,  in  some  of  them,  the  party 
using  the  name  of  another  was  held  liable,  not  on  the  contract,  but 
upon  the  transaction  out  of  which  the  contract  grew.    It  may  be  that 


550  BRADLEE  V.   BOSTON  GLASS   MANUF'Y.  [cHAP.   XV. 

Bay  is  liable  in  an  action  charging  him  upon  the  original  trans- 
action, but  he  is  not  liable  upon  the  promissory  note.  He  is  not  liable 
because  he  never  made  that  note  his  contract.  He  never  agreed  to 
be  bound  upon  it,  but,  on  the  contrary,  refused  to  sign  it  as  his 
contract  or  bind  himself  by  it  as  an  instrument  of  writing. 

No  cases  precisely  in  point  have  been  cited  to  us,  nor  in  con- 
siderable research  among  the  authorities  have  we  been  able  to  find 
one  entirely  similar  in  its  facts.  We  think,  however,  that  the  case 
is  covered  by  the  general  principle  of  law,  and  that  these  are  well 
stated  and  elucidated  in  Bartlett  v.  Tucker,  104  Mass.  336,  6  Am. 
Rep.  240,  the  opening  paragraph  of  the  opinion  in  which  case  reads : 
"  It  is  well  settled  that  any  person  taking  a  negotiable  promissory 
note  contracts  with  those  only  whose  names  are  signed  to  it  as  parties, 
and  cannot  therefore  maintain  an  action  upon  the  note  against  any 
other  person.  That  rule,  of  course,  does  not  preclude  charging  a 
party  who,  instead  of  the  name  by  which  he  is  usually  known,  signs, 
with  intent  to  bind  himself  thereby,  his  initials,  or  a  mark,  or  any 
name  under  which  he  is  proved  to  have  held  himself  out  to  the  world 
and  carried  on  business." 

The  judgment  of  the  court  below  is  affirmed. 


h.  Construction  from  Signature  aided  by  Eecitals  in 
THE  Instrument. 

BEADLEE   v.   BOSTON   GLASS   MANUFACTORY. 

16  Pick.  (Mass.)  347.     1835. 

Assumpsit  on  the  following  promissory  note:  — 

"Boston,  January  13,  1823. 
For  value  received,  we,  the  subscribers,  jointly  and  severally,  promise  to 
pay  Messrs.  J.  and  T.  Bradlee  or  order,  for  the  Boston  Glass  Manufactory, 
thirty-five  hundred  dollars,  on  demand,  with  interest. 

Jonathan  Hunnewell, 
Samuel  Gobe, 
Chables  F.  Kupfee. 
Thirty  days'  notice  shall  be  given  before  payment  of  this  note,  by  either  side." 

Plaintiffs  loaned  the  company  $3,500,  for  which  they  received 
the  note  of  the  company,  signed  by  Kupfer  as  treasurer,  and  by  Hun- 
newell and  Gore  as  sureties.  That  note  was  cancelled  and  this  note 
given  in  its  stead.  The  company  continued  to  pay  the  interest  on  this 
note.  Plaintiffs  have  already  recovered  a  judgment  against  Hunne- 
well, Gore,  and  Kupfer  on  this  note,  and  issued  a  body  execution 


CHAP.   XV.]      LIABILITY   ON   NEGOTIABLE   INSTRUMENT.  551 

thereon  against  Hunnewell,  and  covenanted  with  Gore,  upon  his 
payment  of  one-third  of  the  judgment,  not  to  proceed  further  against 
him. 

Shaw,  C.  J.,  delivered  the  opinion  of  the  court. 

The  first  question  which  arises  here  is,  whether  this  was  the 
promissory  note  of  the  Boston  Glass  Manufactory,  or  of  the  indi- 
viduals who  signed  it.  It  is  not  now  contended  that  a  corporation 
may  not  give  a  promissory  note  by  its  agents,  and  is  not  to  be  treated, 
in  this  respect,  like  a  natural  person.  The  main  question  in  the 
present  case  arises  from  the  form  of  the  contract;  and  the  question 
is,  whether  in  this  form  it  binds  the  persons  who  signed  it,  or  the 
company  for  whose  use  the  money  was  borrowed.  As  the  forms  of 
words  in  which  contracts  may  be  made  and  executed  are  almost  in- 
finitely various,  the  test  question  is,  whether  the  person  signing 
professes  and  intends  to  bind  himself,  and  adds  the  name  of  another 
to  indicate  the  capacity  or  trust  in  which  he  acts,  or  the  person  for 
whose  account  his  promise  is  made;  or  whether  the  words  referring 
to  a  principal  are  intended  to  indicate  that  he  does  a  mere  ministerial 
act  in  giving  effect  and  authenticity  to  the  act,  promise,  and  contract 
of  another.  Does  the  person  signing  apply  the  executing  hand  as 
the  instrument  of  another,  or  the  promising  and  engaging  mind  of 
a  contracting  party?  It  is  held  in  many  cases,  that  although  the 
contract  of  one  is  given  for  the  debt  of  another,  and  although  it  is 
understood  between  the  person  promising  and  the  party  for  whom 
the  contract  is  entered  into,  that  the  latter  is  to  pay  it,  or  to  reim- 
burse and  indemnify  the  contracting  party,  if  he  should  be  required 
to  pay  it,  it  is  still,  as  between  the  parties  to  it,  the  contract  of  the 
party  making  it.  A  leading  and  decisive  case  on  this  point  is 
Stackpole  v.  Arnold,  11  Mass.  K.  27. 

With  these  views  as  to  what  the  question  is,  and  the  grounds  on 
which  it  is  to  be  considered,  we  are  of  opinion  that  this  was  the 
promissory  note  and  obligation  of  the  three  makers,  and  not  of 
the  company. 

The  words,  "for  the  Boston  Glass  Manufactory,"  if  they  stood 
alone,  would  perhaps  leave  it  doubtful  and  ambiguous,  whether  they 
meant  to  bind  themselves  as  promisors  to  pay  the  debt  of  the  com- 
pany, or  whether  they  meant  to  sign  a  contract  for  the  company, 
by  which  they  should  be  bound  to  pay  their  own  debt;  though  the 
place  in  which  the  words  are  introduced  would  rather  seem  to  warrant 
the  former  construction. 

But  other  considerations  arise  from  other  views  of  the  whole  tenor 
of  the  note.  The  fact  is  of  importance  that  it  is  signed  by  three 
instead  of  one,  and  with  no  designation  or  name  of  office,  indicating 
any  agency  or  connection  with  the  company.  No  indication  appears 
on  the  note  itself  that  either  of  them  was  president,  treasurer,  or 
director,  or  that  they  were  a  committee  to  act  for  the  company. 


552  FRANKLAND  V.   JOHNSON.  [CHAP.   XV. 

But  the  words  "  jointly  and  severally  "  are  quite  decisive.  The  per- 
sons are  "  we,  the  subscribers,"  and  it  is  signed  Jonathan  Hunnewell, 
Samuel  Gore,  and  Charles  F.  Kupfer.  This  word,  "  severally  "  must 
have  its  effect;  and  its  legal  effect  was  to  bind  each  of  the  signers. 
This  fixes  the  undertaking  as  a  personal  one.  It  would  be  a  forced 
and  wholly  untenable  construction  to  hold,  that  the  company  and 
signers  were  all  bound;  this  would  be  equally  inconsistent  with  the 
terms  and  the  obvious  meaning  of  the  contract. 

If  we  go  out  of  the  contract  itself,  and  look  at  the  relation  in 
which  the  parties  stood  to  each  other,  with  the  view  of  giving  effect 
to  the  language  of  their  contract  for  one  purpose,  we  must  for 
another.  It  is  a  circumstance  relied  on  for  the  plaintiffs  with  some 
confidence,  that  the  money  was  originally  borrowed  for  the  company, 
that  the  note  was  entered  on  the  books  as  the  debt  of  the  company, 
and  that  the  interest  was  paid  by  them.  But  it  further  appears  that 
from  1814  to  1823  these  promisees  held  the  note  of  the  company, 
guaranteed  by  two  of  these  promisors.  Gore  and  Hunnewell,  the 
other,  Kupfer,  having  signed  it  as  treasurer,  which  did  not  render 
him  personally  liable,  and  that  at  that  time  all  the  parties  were  in 
good  credit.  Now  upon  the  plaintiffs'  hypothesis,  they  must  have 
voluntarily  relinquished  the  liability  of  two  responsible  guarantors, 
retaining  the  liability  of  the  company  only,  and  that  for  a  large  debt, 
which,  from  the  clause  providing  for  a  mutual  notice  of  thirty  days, 
seems  intended  to  have  been  a  kind  of  permanent  loan.  But  upon 
the  other  hypothesis  they  retained  the  names  of  two  responsible  per- 
sons, and  that  in  the  more  direct  and  unquestionable  form  of  joint 
and  several  promisors,  together  with  the  name  of  another  responsible 
person  as  promisor,  in  lieu  of  that  of  the  company. 

Plaintiffs  non-suit. 


FEANKLAND   v.   JOHNSON. 

147  111.  520.     1893. 

Assumpsit  upon  the  following  instrument :  — 

$5,592.00  Chicago,  June  1,  1885. 

On  or  before  the  first  day  of  June,  1888,  the  Western  Seaman's  Friend 
Society  agrees  to  pay  to  L.  M.  Johnson,  or  order,  the  sum  of  five  thousand  fire 
hundred  and  ninety-two  dollars,  with  interest  at  the  rate  of  six  per  cent,  per 
annum. 

B.  Fbankland,  Oen.  Sup't. 

Judgment  was  given  for  the  plaintiff,  and  the  defendant  (Frank- 
land)  appeals. 

Mr.  Justice  Wilkin.  .  .  .  The  writing  on  its  face  is  not  dis- 
tinctly the  note  of  Frankland.     A  personal  note  by  him,  in  proper 


CHAP.   XV.]       LIABILITY   ON    NEGOTIABLE   INSTRUMENT.  553 

form,  would  have  used  the  personal  pronoun  "  I,"  instead  of  the 
name  of  the  corporation,  and  would  have  been  signed  without  the 
designation  "  Gen.  Sup't."  Neither  is  it,  by  its  terms,  the  note  of 
a  corporation.  As  such,  it  should  have  been  signed  with  the  name 
of  the  corporation,  by  its  president,  secretary,  or  other  officers  au- 
thorized to  execute  it,  or,  as  in  Scanlan  v.  Keith,  102  111.  634,  by 
the  proper  officers  designating  themselves  officers  of  the  corporation 
for  which  they  asssumed  to  act,  or,  as  in  New  Market  Savings  Bank 
V.  Gillet,  100  111.  254,  using  the  corporate  name  both  in  the  body 
of  the  note  and  in  the  signatures  to  it. 

But  if  it  be  conceded  that,  prima  facie,  a  general  superintendent 
of  a  corporation  has  authority  to  make  promissory  notes  in  its  name, 
and  this  instrument  be  held  to  appear,  on  its  face,  to  be  the  obliga- 
tion of  the  society,  rather  than  of  Frankland,  certainly  it  could  not 
even  then  be  contended  that  it  was  conclusively  so.  It  is  well  under- 
stood that  if  the  agent,  either  of  a  corporation  or  an  individual, 
makes  a  contract  which  he  has  no  authority  to  make,  he  binds  him- 
self personally,  according  to  the  terms  of  the  contract.  Angell  & 
Ames  on  Corp.  §  303.  It  was  said  by  Sutherland,  J.,  in  Mott  v. 
Hicks,  1  Cow.  573  (13  A.  D.  556):  "It  is  perfectly  well  settled 
that  if  a  person  undertake  to  contract,  as  agent,  for  an  individual 
or  corporation,  and  contracts  in  a  maimer  which  is  not  legally  bind- 
ing upon  his  principal,  he  is  personally  responsible  (citing  authori- 
ties). And  the  agent,  when  sued  upon  such  a  contract,  can  exonerate 
himself  from  personal  liability  only  by  showing  his  authority  to  bind 
those  for  whom  he  has  undertaken  to  act.  It  is  not  for  the  plaintiff 
to  show  that  he  had  not  authority.  The  defendant  must  show, 
affirmatively,  that  he  had."  ^  This  rule  is  quoted  with  approval  in 
Wheeler  v.  Reed  et  al.,  36  111.  81. 

This  action  is  against  Frankland,  individually.  The  note  is  de- 
clared upon  as  his  personal  promise  to  pay.  The  question,  then, 
as  to  whether  it  is  his  contract  or  that  of  the  Western  Seaman's 
Friend  Society,  is  one  of  fact,  and  so  it  was  treated  on  the  trial. 
Both  parties  went  fully  into  the  facts  and  circumstances  leading  to 
and  attending  the  making  of  the  note.  So  far  from  showing  affirma- 
tively that  appellant  had  authority  to  make  the  note  so  as  to  bind 
the  corporation,  the  evidence  strongly  tends  to  show  the  contrary, 
and  that  it  was  the  intention  of  the  parties  that  he  should  be  indi- 
vidually responsible.  No  record  proceedings  whatever,  on  the  part 
of  the  corporation,  pertaining  to  appellant's  transactions  witli 
appellee  or  her  husband,  were  shown.  It  is  clear  that  if  suit  had  been 
against  the  society  there  could  have  been  no  recovery  on  the  evidence 
in  this  record.  At  all  events,  the  facts  have  been  settled  adversely 
to  appellant,  and  are  not  open  to  review  in  this  court. 

*  But  see  Baltzen  v.  Nicolay,  ante,  p.  533.  The  decision  may  be  approved  without 
assenting  to  this  line  of  argument. 


554  mechanics'  bank,  etc.  v.  the  bank,  etc.   [chap.  XV. 

The  propositions  submitted  to  the  trial  court  by  appellant,  to  be 
held  as  law  applicable  to  the  case,  are  mainly  requests  to  hold  certain 
facts  to  have  been  proved,  and,  under  the  evidence,  they  were  all 
properly  refused.  In  fact,  no  argument  is  made  in  support  of  them. 
There  is  but  one  theory  on  which  the  judgment  below  could  be 
reversed  by  this  court,  and  that  is,  that  the  note  sued  on  must  be 
held  to  be  the  contract  of  the  corporation,  absolutely  and  conclusively, 
and  all  parol  proof  tending  to  establish  appellant's  liability,  was 
incompetent,  and  that  theory  is  clearly  untenable. 

As  to  the  judgment  on  the  attachment,  it  is  only  necessary  to  say 
that  the  evidence  at  least  tended  to  support  the  allegations  of  the 
original  aflSdavit,  and  the  judgment  of  aflfirmance  in  the  Appellate 
Court  is  conclusive. 

The  judgment  of  the  Appellate  Court  will  be  affirmed. 

Judgment  affirmed. 

c.    Construction  feom  Signature  aided  by  Marginal  Head- 
ings OR  Memoranda. 

MECHANICS'   BANK   OF   ALEXANDRIA   v.    THE 
BANK   OF   COLUMBIA. 

5  Wh.  (U.  S.)  326.     1820. 

Assumpsit  on  the  following  check :  — 

No.  18. 

MECHAiacs'  Baitk  of  Alexandria. 

June  25,  1817. 


Cashier  of  the  Bank  of  Columbia, 

Pay  to  the  order  of  P.  H.   Minor,   Esq.,  Ten  Thousand 
Dollars. 

Wm.  Paton,  Jb. 

$10,000. 


Paton  was  cashier  and  Minor  teller  of  the  Mechanics'  Bank. 
Minor  turned  over  the  check  to  the  Bank  of  the  United  States  in 
payment  of  a  balance  due  that  bank  by  the  Mechanics'  Bank.  The 
Bank  of  the  United  States  presented  the  check  to  the  Bank  of  Colum- 
bia, which  paid  it  and  charged  it  to  the  account  of  the  Mechanics' 
Bank,  treating  it  as  the  check  of  the  latter  bank.  The  Mechanics' 
Bank  contended  that  the  check  was  Paton's  private  obligation;   that 


CHAP.   XV.]      LIABILITY  ON   NEGOTIABLE   INSTRUMENT,  555 

it  bought  it  for  value ;  that  he  had  funds  in  the  Bank  of  Columbia 
to  meet  it;  and  that  it  should  be  charged  to  his  account.  The  court 
heard  parol  evidence  to  establish  the  official  character  of  the  check, 
and  gave  judgment  for  the  plaintiff.  Defendant  objected  to  this 
evidence  and  requested  a  charge  that  the  check  was  on  its  face  a 
private  check  of  Paton's,  which  charge  was  refused. 

Mr.  Justice  Johnson.  .  .  .  The  only  ground  on  which  it  can 
be  contended  that  this  check  was  a  private  check,  is,  that  it  had  not 
below  the  name  the  letters  Cos  or  Ca.  But  the  fallacy  of  the  propo- 
sition will  at  once  appear  from  the  consideration,  that  the  conse- 
quence would  be,  that  all  Paton's  checks  must  have  been  adjudged 
private.  For  no  definite  meaning  could  be  attached  to  the  addition 
of  those  letters  without  the  aid  of  parol  testimony. 

But  the  fact  that  this  appeared  on  its  face  to  be  a  private  check 
is  by  no  means  to  be  conceded.  On  the  contrary,  the  appearance  of 
the  corporate  name  of  the  institution  on  the  face  of  the  paper,  at 
once  leads  to  the  belief  that  it  is  a  corporate,  and  not  an  individual 
transaction:  to  which  must  be  added  the  circumstances,  that  the 
cashier  is  the  drawer,  and  the  teller  the  payee;  and  the  form  of 
ordinary  checks  deviated  from  by  the  substitution  of  to  order,  for 
to  hearer.  The  evidence,  therefore,  on  the  face  of  the  bill  pre- 
dominates in  favor  of  its  being  a  bank  transaction.  Applying,  then, 
the  plaintiff's  own  principle  to  the  case,  and  the  restriction  as  to  the 
production  of  parol  or  extrinsic  evidence  could  have  been  only  appli- 
cable to  himself.  But  it  is  enough  for  the  purposes  of  the  defendant 
to  establish,  that  there  existed,  on  the  face  of  the  paper,  circum- 
stances from  which  it  might  reasonably  be  inferred,  that  it  was  either 
one  or  the  other.  In  that  case,  it  became  indispensable  to  resort  to 
extrinsic  evidence  to  remove  the  doubt.  The  evidence  resorted  to 
for  this  purpose  was  the  most  obvious  and  reasonable  possible,  viz., 
that  this  was  the  appropriate  form  of  an  official  check;  that  it  was, 
in  fact,  cut  out  of  the  official  check-book  of  the  bank,  and  noted  on 
the  margin;  that  the  money  was  drawn  in  behalf  of,  and  applied 
to  the  use  of,  the  Mechanics'  Bank;  and  by  all  the  banks,  and  all 
the  officers  of  the  banks  through  which  it  passed,  recognized  as  an 
official  transaction.  It  is  true,  it  was  in  evidence  that  this  check 
was  credited  to  Paton's  own  account  on  the  books  of  his  bank.  But 
it  was  done  by  his  own  order,  and  with  the  evidence  before  their 
eyes  that  it  was  officially  drawn.  This  would  never  have  been  sanc- 
tioned by  the  directors,  unless  for  reasons  which  they  best  understood, 
and  on  account  of  debits  which  they  only  could  explain. 

It  is  by  no  means  true,  as  was  contended  in  argument,  that  the 
acts  of  agents  derive  their  validity  from  professing,  on  the  face  of 
them,  to  have  been  done  in  the  exercise  of  their  agency.  In  the  more 
solemn  exercise  of  derivative  powers,  as  applied  to  the  execution  of 
instruments  known  to  the  common  law,  rules  of  form  have  been 


556  HITCHCOCK   V.   BUCHANAN.  [CHAP,    XV. 

prescribed.  But  in  the  diversified  exercise  of  the  duties  of  a  general 
agent,  the  liability  of  the  principal  depends  upon  the  facts:  (1) 
That  the  act  was  done  in  the  exercise,  and,  (3)  Within  the  limits 
of  the  powers  delegated.  These  facts  are  necessarily  inquirable  into 
by  a  court  and  jury;  and  this  inquiry  is  not  confined  to  written 
instruments  (to  which  alone  the  principle  contended  for  could 
apply),  but  to  any  act  with  or  without  writing,  within  the  scope  of 
the  power  or  confidence  reposed  in  the  agent;  as,  for  instance,  in 
the  case  of  money  credited  in  the  books  of  a  teller,  or  proved  to  have 
been  deposited  with  him,  though  he  omits  to  credit  it. 

Judgment  affirmed. 


HITCHCOCK   V.    BUCHANAN. 

105  U.  S.  416.     1881. 

This  was  an  action  of  assumpsit  by  Hitchcock  as  indorsee,  against 
Buchanan  and  Waugh  as  drawers,  of  the  following  bill  of  ex- 
change :  — 

Office  of  Belleville  Nail  Mill  Co., 
$5,477.13.  Belleville, -III.,  Dec.  15,  1875. 

Four  months  after  date,  pay  to  the  order  of  John  Stevens,  Jr.,  cashier,  fifty- 
four  hundred  and  seventy-seven  ^^/mo  dollars,  value  received,  and  charge  same 
to  account  of  Belleville  Nail  Mill  Co. 

Wm.  C.  Buchanax,  Pres't. 
James  C.  Waugh,  8e&y. 
To  J.  H.  Piepeb,  Treas.,  Belleville,  Illinois. 

Demurrer  to  a  declaration  against  the  defendants  as  drawers  of 
the  bill  was  sustained,  and  judgment  given  for  the  defendants,  on 
the  ground  that  the  instrument  was  the  bill  of  the  Belleville  Nail 
Mill  Company,  and  not  the  bill  of  the  defendants. 

Mr.  Justice  Gray,  after  stating  the  case,  delivered  the  opinion  of 
the  court. 

The  bill  of  exchange  declared  on  is  manifestly  the  draft  of  the 
Belleville  Nail  Mill  Company,  and  not  of  the  individuals  by  whose 
hands  it  is  subscribed.  It  purports  to  be  made  at  the  office  of  the 
company,  and  "directs  the  drawee  to  charge  the  amount  thereof  to 
the  account  of  the  company,  of  which  the  signers  describe  themselves 
as  president  and  secretary.  An  instrument  bearing  on  its  face  all 
these  signs  of  being  the  contract  of  the  principal  cannot  be  held 
to  bind  the  agents  personally.  Sayre  v.  Nichols,  7  Cal.  535 ;  Carpen- 
ter V.  Farnsworth,  106  Mass.  561,  and  cases  there  cited. 

The  allegation  in  the  declaration,  that  the  defendants  made 
**  their  "  bill  of  exchange,  is  inconsistent  with  the  terms  of  the  writ- 
ing sued  on  and  made  part  of  the  record,  and  is  not  admitted  by  the 


CHAP.    XV.]       LIABILITY   ON    NEGOTIABLE   INSTRUMENT.  557 

demurrer.    Dillon  v.  Barnard,  21  Wall.  430;  Binz  v.  Tyler,  79  III. 
248. 

The  provision  of  the  statute  of  Illinois  (ed.  1877,  title  Practice, 
§§  34,  36)  prohibiting  defendants  sued  on  written  instruments  from 
denying  their  signatures,  except  under  plea  verified  by  affidavit,  has 
no  application  where  the  fact  of  signature  is  admitted  by  demurrer, 
and  the  only  issue  is  one  of  law. 

Judgment  affirmed. 


CHIPMAN   V.   FOSTER   et   al. 

119  Mass.  189.     1875. 

Contract  against  the  defendants  as  drawers  of  three  drafts  in- 
dorsed in  blank  by  the  payees,  of  which  the  following  is  a  copy :  — 


Foster  &  Cole, 
General  Agents 

for  the 
New  England 

States, 
15  Devonshire 

Street, 

Boston. 


No.  176.  $5,000. 

New  England  Agenct  of  the  Pennstxvania.  Fibe  In- 

SUBANCB  Company,  Philadelphia. 

Boston,  August  18,  1873. 
Pay  to  the  order  of  Haley,  Morse  &  Company,  five 
thousand  dollars,  being  in  full  of  all  claims  and  demands 
against  said  company  for  loss  and  damage  by  fire  on  the 
30th  day  of  May,  1873,  to  property  insured  under  policy 
No.  824,  of  Boston,  Mass.,  agency. 

Foster  &  Colb. 
To  the  Pennsylvania  Fire  Insurance  Company,  Phila- 
delphia. 


Defendants  were  general  agents  of  the  Pennsylvania  Fire  Insur- 
ance Company  of  Philadelphia,  and  drew  the  drafts  in  question  in 
pa}Tnent  of  three  policies  issued  by  that  company.  The  company 
refused  to  honor  the  drafts,  and  they  were  duly  protested. 

Gray,  C.  J.  Each  of  these  drafts,  upon  its  face,  purports  to  be 
issued  by  the  New  England  agency  of  the  Pennsylvania  Fire  Insur- 
ance Company,  and  shows  that  Foster  &  Cole  are  the  general  agents 
of  that  corporation  for  the  New  England  States,  as  well  as  that  the 
draft  is  drawn  in  payment  of  a  claim  against  the  corporation.  It 
thus  appears  that  Foster  &  Cole,  in  drawing  it,  acted  only  as  agents 
of  the  corporation,  as  clearly  as  if  they  had  repeated  words  expressing 
their  agency  after  their  signature ;  and  they  cannot  be  held  personally 
liable  as  drawers  thereof.  Carpenter  v.  Famsworth,  106  Mass.  561, 
and  cases  cited.  Judgment  for  the  defendants. 


568  CASCO  NAT.  BANK  V.   CLAEK  ET  AL.  [CHAP.  XV. 

CASCO   NATIONAL  BANK  v.   CLAEK  et  al. 

139  N.  Y.  307.     1893. 

Action  against  defendants  as  makers  of  a  promissory  note.  Judg- 
ment for  plaintiff.    The  opinion  states  the  facts. 

Gray,  J.  The  action  is  upon  a  promissory  note,  in  the  following 
form,  viz. :  — 


Bbookltn,  N.  Y.,  August  2,  1890. 
$7,500.     Three  months  after  date,  we  promise  to  pay  to  the  order  of 
Clark   &  Chaplin  Ice  Company,  seventy-five  hundred  dollars  at  Me- 
chanics' Bank:    value  received. 

John  Clabk,  Prest. 
E.  H.  Close,  Treas. 


It  was  delivered  in  payment  for  ice  sold  by  the  payee  company 
to  the  Eidgewood  Ice  Company,  under  a  contract  between  those  com- 
panies, and  was  discounted  by  the  plaintiff  for  the  payee,  before  its 
maturity.  The  appellants,  Clark  and  Close,  appearing  as  makers  upon 
the  note,  the  one  describing  himself  as  "  Prest."  and  the  other  as 
"  Treas.,"  were  made  individually  defendants.  They  defended  on 
the  ground  that  they  had  made  the  note  as  officers  of  the  Eidgewood 
Ice  Company,  and  did  not  become  personally  liable  thereby  for  the 
debt  represented. 

Where  a  negotiable  promissory  note  has  been  given  for  the  pay- 
ment of  a  debt  contracted  by  a  corporation,  and  the  language  of  the 
promise  does  not  disclose  the  corporate  obligation,  and  the  signatures 
to  the  paper  are  in  the  names  of  individuals,  a  holder,  taking  bona 
fide,  and  without  notice  of  the  circumstances  of  its  making,  is  en- 
titled to  hold  the  note  as  the  personal  undertaking  of  its  signers, 
notwithstanding  they  affix  to  their  names  the  title  of  an  office.  Such 
an  affix  will  be  regarded  as  descriptive  of  the  persons  and  not  of  the 
character  of  the  liability.  Unless  the  promise  purports  to  be  by 
the  corporation,  it  is  that  of  the  persons  who  subscribe  to  it;  and 
the  fact  of  adding  to  their  names  an  abbreviation  of  some  official 
title  has  no  legal  signification  as  qualifying  their  obligation,  and 
imposes  no  obligation  upon  the  corporation  whose  officers  they  may 
be.  This  must  be  regarded  as  the  long  and  well-settled  rule.  Byles 
on  Bills,  §§  36,  37,  71 ;  Pentz  v.  Stanton,  10  Wend.  271 ;  Taft  v. 
Brewster,  9  Johns.  334;  Hills  v.  Bannister,  8  Cow.  31;  Moss  v. 
Livingston,  4  N.  Y.  208 ;  De  Witt  v.  Walton,  9  Id.  571 ;  Bottomley 
V.  Fisher,  1  Hurlst.  &  Colt.  211.  It  is  founded  in  the  general  prin- 
ciple that  in  a  contract  every  material  thing  must  be  definitely 
expressed,  and  not  left  to  conjecture.    Unless  the  language  creates, 


CHAP.   XV.]      LIABILITY   ON   NEGOTIABLE   INSTRUMENT.  559 

or  fairly  implies,  the  undertaking  of  the  corporation,  if  the  purpose 
is  equivocal,  the  obligation  is  that  of  its  apparent  makers. 

It  was  said  in  Briggs  v.  Partridge,  64  X.  Y.  357,  363,  that  per- 
sons taking  negotiable  instruments  are  presumed  to  take  them  on  the 
credit  of  the  parties  whose  names  appear  upon  them,  and  a  person 
not  a  party  cannot  be  charged,  upon  proof  that  the  ostensible  party 
signed,  or  indorsed,  as  his  agent.  It  may  be  perfectly  true,  if  there 
is  proof  that  the  holder  of  negotiable  paper  was  aware,  when  he 
received  it,  of  the  facts  and  circumstances  connected  with  its  making, 
and  knew  that  it  was  intended  and  delivered  as  a  corporate  obliga- 
tion only,  that  the  persons  signing  it  in  this  manner  could  not  be 
held  individually  liable.  Such  knowledge  might  be  imputable  from 
the  language  of  the  paper,  in  connection  with  othei*  circumstances, 
as  in  the  case  of  Mott  v.  Hicks,  1  Cow.  513,  where  the  note  read, 
"  the  president  and  directors  promise  to  pay,"  and  was  subscribed 
by  the  defendant  as  "  president."  The  court  held  that  that  was  suffi- 
cient to  distinguish  the  case  from  Taft  v.  Brewster,  supra,  and  made 
it  evident  that  no  personal  engagement  was  entered  into  or  intended. 
Much  stress  was  placed  in  that  case  upon  the  proof  that  the  plaintiff 
was  intimately  acquainted  with  the  transaction  out  of  which  arose 
the  giving  of  the  corporate  obligation. 

In  the  case  of  Bank  of  Genesee  v.  Patchin  Bank,  19  N.  Y.  312, 
referred  to  by  the  appellants'  counsel,  the  action  was  against  the 
defendant  to  hold  it  as  the  indorser  of  a  bill  of  exchange,  drawn  to 
the  order  of  "  S.  B.  Stokes,  Cas.,"  and  indorsed  in  the  same  words. 
The  plaintiff  bank  was  advised,  at  the  time  of  discounting  the  bill, 
by  the  president  of  the  Patchin  Bank,  that  Stokes  was  its  cashier, 
and  that  he  had  been  directed  to  send  it  in  for  discount;  and  Stoke& 
forwarded  it  in  an  official  way  to  the  plaintiff.  It  was  held  that  the 
Patchin  Bank  was  liable,  because  the  agency  of  the  cashier  in  the 
matter  was  communicated  to  the  knowledge  of  the  plaintiff  as  well 
as  apparent. 

Incidentally,  it  was  said  that  the  same  strictness  is  not  required 
in  the  execution  of  commercial  paper  as  between  banks,  that  is,  in 
other  respects,  between  individuals. 

In  the  absence  of  competent  evidence  showing  or  charging  knowl- 
edge in  the  holder  of  negotiable  paper  as  to  the  character  of  the 
obligation,  the  established  and  safe  rule  must  be  regarded  to  be  that 
it  is  the  agreement  of  its  ostensible  maker  and  not  of  some  other 
party,  neither  disclosed  by  the  language,  nor  in  the  manner  of  exe- 
cution. In  this  case  the  language  is,  "  we  promise  to  pay,"  and  the 
signatures  by  the  defendants,  Clark  and  Close,  are  perfectly  consistent 
with  an  assumption  by  them  of  the  company's  debt. 

The  appearance  upon  the  margin  of  the  paper  of  the  printed  name 
"  Ridgewood  Ice  Company  "  was  not  a  fact  carrying  any  presump- 
tion that  the  note  was,  or  was  intended  to  be,  one  by  that  company. 


560  SOUHEGAN   NAT.   BANK  V.  BOARDMAN,  [CHAP.  XV. 

It  was  competent  for  its  officers  to  obligate  themselves  personally, 
for  any  reason  satisfactory  to  themselves;  and,  apparently  to  the 
world,  they  did  so  by  the  language  of  the  note,  which  the  mere  use 
of  a  blank  form  of  note,  having  upon  its  margin  the  name  of  their 
company,  was  insufficient  to  negative. 

(The  court  then  decides  that  the  fact  that  one  Winslow  was  a 
director  in  the  payee  company,  and  also  in  the  plaintiff  bank,  did  not 
charge  the  latter  with  notice  as  to  the  origin  of  the  paper.) 

Judgment  affirmed. 


d.  Indorsees  of  Bills  and  Notes. 

SOUHEGAN   NATIONAL   BANK   v.   BOAKDMAN. 

46  Minn.  293.     1891. 

Action  against  defendant  as  indorser  upon  the  following  prom- 
issory note :  — 

$1,000.  MiNiwiAPOUS,  May  12,  1884. 

Six  months  after  date  we  promise  to  pay  to  the  order  of  A.  J.  Boardman, 
treasurer,  one  thousand  dollars,  value  received,  with  interest  at  eight  per 
cent,  after  maturity. 

Minneapolis  Engine  &  Machine  Wobks. 
By  A.  L.  Cbockeb,  Se&y. 
[Indorsed:]  A.  J.  Boabdman,  Treasurer. 

Defendant  was  treasurer  of  the  Minneapolis  Engine  &  Machine 
Works,  and  claims  to  have  made  the  indorsement  in  that  capacity. 
Judgment  for  plaintiff. 

Mitchell,  J.  (after  stating  the  facts,  and  deciding  that  the  trial 
court  erred  in  not  submitting  to  the  jury  a  question  as  to  the  exten- 
sion of  the  time  of  payment  without  the  consent  of  the  defendant). 
With  a  view  to  another  trial  it  is  necessary  to  consider  the  questions 
involved  in  the  first  defence.  These  are  (1)  whether,  on  the  face 
of  the  paper,  this  is  the  indorsement  of  the  corporation  or  of  de- 
fendant individually;  and  (2)  whether  its  character  is  conclusively 
determined  by  the  terms  of  the  instrument  itself,  or  whether  extrin- 
sic evidence  is  admissible  to  show  in  what  character  —  officially  or 
individually  —  the  defendant  made  the  indorsement. 

Where  both  the  names  of  a  corporation  and  of  an  officer  or  agent 
of  it  appear  upon  a  bill  or  note,  it  is  often  a  perplexing  question 
to  determine  whether  it  is  in  legal  effect  the  contract  of  the  corpora- 
tion, or  the  individual  contract  of  the  officer  or  agent.  It  is  very 
desirable  that  the  rules  of  interpretation  of  commercial  paper  should 
be  definite  and  certain;  and  if  the  courts  of  the  highest  authority 
on  the  subject  had  laid  down  any  exact  and  definite  rules  of  con- 


CHAP.   XV.]      LIABILITY   ON   NEGOTIABLE  INSTRUMENT.  561 

struction  for  such  cases,  we  would,  for  the  sake  of  uniformity,  be 
glad  to  adopt  them.  But,  unfortunately,  not  only  do  different  courts 
differ  with  each  other,  but  we  are  not  aware  of  any  court  whose 
decisions  furnish  any  definite  rule  or  system  of  rules  applicable  to 
such  cases.  Each  case  seems  to  have  been  decided  with  reference 
to  its  own  facts.  If  what  the  courts  sometimes  call  "  corporate 
marks"  greatly  predominate  on  the  face  of  the  paper,  they  hold  it 
to  be  the  contract  of  the  corporation,  and  that  extrinsic  evidence 
is  inadmissible  to  show  that  it  was  the  individual  contract  of  the 
officer  or  agent.  If  these  marks  are  less  strong,  they  hold  it  prima 
facie  the  individual  contract  of  the  officer  or  agent,  but  that  extrinsic 
evidence  is  admissible  to  show  that  he  executed  it  in  his  official  capa- 
city in  behalf  of  the  corporation ;  while  in  still  other  cases  they  hold 
that  it  is  the  personal  contract  of  the  party  who  signed  it,  that  the 
terras  "  agent,"  "  secretar}',"  and  the  like,  are  merely  descriptive  of 
the  person,  and  that  extrinsic  evidence  is  not  admissible  to  show  the 
contrary.  See  Daniel,  Neg.  Inst,  §  398  et  seq.  WTien  others  have 
thus  failed  we  can  hardly  hope  to  succeed.  Perhaps  the  difficulty 
is  inherent  in  the  nature  of  the  subject. 

This  court  has  in  a  line  of  decisions  held  that  where  a  party  signs 
a  contract,  affixing  to  his  signature  the  term  "  agent,"  "  trustee," 
or  the  like,  it  is  prima  facie  his  individual  contract,  the  term  affixed 
being  presumptively  merely  descriptive  of  his  person,  but  that  ex- 
trinsic evidence  is  admissible  to  show  that  the  words  were  understood 
as  determining  the  character  in  which  he  contracted.  See  Pratt 
V.  Beaupre,  13  Minn.  177  (187)  ;  Bingham  v.  Stewart,  13  Minn. 
96  (106),  and  14  Minn.  153  (214);  Deering  v.  Thorn,  29  Minn. 
120  (12  N".  W.  Eep.  350)  ;  Eowell  v.  Oleson,  32  Minn.  288  (20 
N.  W.  Kep.  227)  ;  Peterson  v.  Homan,  44  Minn.  166  (46  N.  W. 
Rep.  303)  ;  Brunswick-Balke  Co.  v.  Boutell,  45  Minn»  21  (47  N.  W. 
Rep.  261).  Only  one  of  these,  however  (Bingham  v.  Stewart),  was 
a  case  of  commercial  paper  where  the  name  of  a  corporation  appeared 
on  its  face,  and  in  that  case  possibly  the  court  did  not  give  due  weight 
to  all  the  "  corporate  marks  "  upon  it.  Where  there  is  nothing  on 
the  face  of  the  instrument  to  indicate  in  what  capacity  a  party  exe- 
cuted it  except  his  signature  with  the  word  "  agent,"  "  treasurer," 
or  the  like  suffixed,  there  can  be  no  doubt  of  the  correctness  of  the 
proposition  that  it  is  at  least  prima  fa^ie  his  individual  contract,  and 
the  suffix  merely  a  description  of  his  person.  But  bills,  notes, 
acceptances,  and  indorsements  are  to  some  extent  peculiar,  —  at  least, 
the  different  relations  of  the  parties,  respectively,  to  the  paper  are 
circumstances  which  in  themselves  throw  light  upon,  and  in  some 
cases  control,  its  interpretation,  regardless  of  the  particular  form  of 
the  signature.  For  example,  if  a  draft  were  drawn  on  a  corporation 
by  name,  and  accepted  by  its  duly  authorized  agent  or  officer  in  his 
individual  name,  adding  his  official  designation,  the  acceptance  would 


562  HORAN   V.   HUGHES.  [CHAP.   XV. 

be  deemed  that  of  the  corporation,  for  only  the  drawee  can  accept 
a  bill;  while,  on  the  other  hand,  if  drawn  on  the  drawee  as  an  indi- 
vidual, he  could  not  by  words  of  official  description  in  his  acceptance 
make  it  the  acceptance  of  some  one  else.  So  if  a  note  was  made 
payable  to  a  corporation  by  its  corporate  name,  and  is  indorsed  by 
its  authorized  official,  it  would  be  deemed  the  indorsement  of  the 
corporation;  for  it  is  only  the  payee  who  can  be  first  indorser,  and 
transfer  the  title  to  the  paper.  But  this  is  not  such  a  case.  It  does 
Dot  appear  on  the  face  of  this  note  what  the  defendant  was -treasurer 
of.  Extrinsic  evidence  has  to  be  resorted  to  at  the  very  threshold 
of  the  case  to  prove  that  fact. 

Counsel  for  the  defendant  relies  very  largely  upon  the  case  of 
Palk  V.  Moebs,  127  U.  S.  597  (8  Sup.  Ct.  Rep.  1319),  which  comes 
nearer  sustaining  his  contention  than  any  other  case  to  which  we 
have  been  referred.  But  that  case  differs  from  this  in  the  very  im- 
portant particular  that  it  appeared  upon  the  face  of  the  paper  itself 
that  the  payee  and  indorser  was  the  secretary  and  treasurer  of  the 
corporation,  and  that  as  such  he  himself  executed  the  note  in  its 
behalf.  The  case  was  also  decided  largely  upon  the  authority  of 
Hitchcock  V.  Buchanan,  105  U.  S.  416,  which  is  also  clearly  dis- 
tinguishable from  the  present  case,  for  there  the  bill  sued  on  pur- 
ported on  its  face  to  be  drawn  at  the  office  of  the  company,  and 
directed  the  drawee  to  charge  the  amount  to  the  account  of  the  com- 
pany, of  which  the  signers  described  themselves  as  president  and 
secretary. 

Our  conclusion  is  that  there  is  nothing  upon  the  face  of  the  note 
sued  on  to  take  it  out  from  under  the  rule  laid  down  in  the  decisions 
of  this  court  already  referred  to,  that  upon  its  face  this  is  prima  facie 
the  indorsement  of  defendant  individually,  but  that  extrinsic  evidence 
is  admissible  to  show  that  he  made  the  indorsement  only  in  his 
official  capacity  as  the  indorsement  of  the  corporation. 

Order  reversed. 


8.    Liability  of  Agent  who  Contracts  in  his  own  Name  for  an  Undis- 
closed Principal. 

HORAN   V.    HUGHES. 
129  Fed.  (Dist.  Ct.  S.  D.  N.  Y.)  248.     1903. 

In  admiralty. 

Holt,  District  Judge.  Hughes  made  the  contract  with  Horan. 
He  is  therefore  presumably  responsible  on  it.  His  defence  is,  in 
substance,  that  he  was  acting  as  agent  for  a  principal.  To  maintain 
such  a  defence,  he  must  prove  that  he  disclosed  the  name  of  his  prin- 


CHAP.   XV.]         LIABILITY   FOR   UNDISCLOSED  PRINCIPAL.  563 

cipal.  It  is  not  sufficient  that  he  was  acting  as  agent,  or  that  the 
other  party  to  the  contract  supposed  he  was  acting  as  agent,  if  he  did 
not  know  who  the  principal  was.  De  Remer  v.  Brown,  165  N.  Y. 
419;  Tew  V.  Wolfsohn,  174  N.  Y.  272.  The  evidence  in  this  case, 
in  my  opinion,  preponderates  that  Hughes  either  chartered  Horan's 
boat  himself,  or  that,  if  Horan  supposed  Hughes  was  acting  as  agent, 
he  did  not  know  who  Hughes'  principal  was. 

There  should  be  a  decree  for  the  libellant  for  the  amount  demanded 
in  the  libel,  with  costs. 

De  Remer  v.  Brown,  165  N".  Y.  410,  419.  Martin,  J.  A  per- 
son, even  though  making  an  agreement  for  another,  makes  himself 
personally  liable  thereon  if  he  contracts  in  his  own  name  without 
disclosing  his  principal,  although  the  other  party  to  the  contract  may 
suppose  that  he  is  acting  as  agent.  Mills  v.  Hunt,  17  Wend.  333; 
Newman  v.  Greeff,  101  N.  Y.  663;  Kernochan  v.  Murray,  111  N.  Y. 
306;  Argersinger  v.  Macnaughtan,  114  N.  Y.  535;  Welch  v.  Goodwin, 
123  Mass.  71;  Worthington  v.  Cowles,  112  Mass.  30;  Blakely  v. 
Bennecke,  59  Mo.  193;  Eichbaum  v.  Irons,  6  Watts  &  Serg.  67; 
McClure  v.  Central  Trust  Co.  of  N.  Y.,  165  N.  Y.  108 ;  Mechem  on 
Agency,  §  555;  Dunlap's  Paley  on  Agency,  368. 

Nor  is  it  sufficient  to  exonerate  the  agent  from  liability  that  the 
seller  has  means  of  ascertaining  the  name  of  the  principal.  He  must 
have  actual  knowledge.  Holt  v.  Ross,  54  N.  Y.  472,  475;  Cobb  v. 
Knapp,  71  N.  Y.  348,  352.  In  the  Holt  case  Judge  Earl  said: 
"  Knowledge  in  plaintiffs  that  defendant  might  have  acted  as  agent 
was  not  enough,  and  it  was  not  the  duty  of  the  plaintiffs  to  inquire, 
before  paying,  whether  the  defendant  was  acting  as  principal  or  agent. 
It  was  the  duty  of  defendant,  if  it  desired  to  be  protected  as  agent, 
to  have  given  notice  of  its  agency."  In  Cobb  v.  Knapp,  Church, 
Ch.  J.,  said :  "  It  is  not  sufficient  that  the  seller  may  have  the  means 
of  ascertaining  the  name  of  the  principal.  If  so,  the  neglect  to  in- 
quire might  be  deemed  sufficient.  He  must  have  actual  knowledge. 
There  is  no  hardship  in  ihe  rule  of  liability  against  agents.  They 
always  have  it  in  their  own  power  to  relieve  themselves,  and  when  they 
do  not,  it  must  be  presumed  that  they  intend  to  be  liable."  ^ 

*  The  use  of  the  name  Campbell  &  Co.  does  not  necessarily  disclose  any  agency. 
Amans  v.  Campbell,  70  Minn.  493. 


564  HIQGINS   V.   8ENI0B.'  [OHAP.   XV. 


9.    Liability  of  Agent  who  Contracts  in  his  own  Name  in  a  Simple 

Contract. 

HIGGINS   V.    SENIOR. 

8  M.  &  W.   (Exch.)   834.     1841. 

Special  assumpsit  to  recover  compensation  for  the  non-delivery 
of  iron.  Judgment  for  plaintiffs.  Rule  for  a  non-suit  or  a  new  trial. 
The  contract  of  sale  was  signed  by  defendant,  but  he  was  known  to 
be  acting  for  the  Varteg  Iron  Co. 

Pabke,  B.  The  question  in  this  case,  which  was  argued  before  us 
in  the  course  of  last  term,  may  be  stated  to  be,  whether  in  an  action 
on  an  agreement  in  writing,  purporting  on  the  face  of  it  to  be  made 
by  the  defendant,  and  subscribed  by  him,  for  the  sale  and  delivery 
by  him  of  goods  above  the  value  of  £10,  it  is  competent  for  the  de- 
fendant to  discharge  himself,  on  an  issue  on  the  plea  of  nan  assumpsit 
by  proving  that  the  agreement  was  really  made  by  him  by  the  au- 
thority of,  and  as  agent  for,  a  third  person,  and  that  the  plaintiff  knew 
those  facts  at  the  time  when  the  agreement  was  made  and  signed. 
Upon  consideration,  we  think  that  it  was  not,  and  that  the  rule  for 
a  new  trial  must  be  discharged.  - 

There  is  no  doubt  that,  where  such  an  agreement  is  made,  it  is 
competent  to  show  that  one  or  both  of  the  contracting  parties  were 
agents  for  other  persons,  and  acted  as  such  agents  in  making  the 
contract,  so  as  to  give  the  benefit  of  the  contract  on  the  one  hand  to 
(Garrett  v.  Handley,  4  B.  &  C.  664;  Bateman  v.  Phillips,  15  East, 
272),  and  charge  with  liability  on  the  other  (Paterson  v.  Gandasequi, 
15  East,  62),  the  unnamed  principals;  and  this,  whether  the  agree- 
ment be  or  be  not  required  to  be  in  writing  by  the  Statute  of  Frauds : 
and  this  evidence  in  no  way  contradicts  the  written  agreement.  It 
does  not  deny  that  it  is  binding  on  those  whom,  on  the  face  of  it, 
it  purports  to  bind;  but  shows  that  it  also  binds  another,  by  reason 
that  the  act  of  the  agent,  in  signing  the  agreement,  in  pursuance  of 
his  authority,  is  in  law  the  act  of  the  principal. 

But,  on  the  other  hand,  to  allow  evidence  to  be  given  that  the  party 
who  appears  on  the  face  of  the  instrument  to  be  personally  a  con- 
tracting party,  is  not  such,  would  be  to  allow  parol  evidence  to 
contradict  the  written  agreement,  which  cannot  be  done.  And  this 
view  of  the  law  accords  with  the  decisions,  not  merely  as  to  bills  of 
exchange  (Sowerby  v.  Butcher,  2  C.  &  M.  368;  Le  Fevre  v.  Lloyd, 
5  Taunt.  749)  signed  by  a  person,  without  stating  his  agency  on  the 
face  of  the  bill,  but  as  to  other  written  contracts,  namely,  the  cases 
of  Jones  V.  Littledale,  6  Ad.  &  Ell.  486,  1  Nev.  &  P.  677,  and  Magee 


CHAP.   XV.]       LIABILITY   OF   AGENT   IN    SUBJECT-MATTER.  565 

V.  Atkinson,  2  M.  &  W.  440.  It  is  true  that  the  case  of  Jones  v. 
Littledale  might  be  supported-  on  the  ground  that  the  agent  really 
intended  to  contract  as  principal,  but  Lord  Denman^  in  delivering 
the  judgment  of  the  court,  lays  down  this  as  a  general  proposition, 
"  that  if  the  agent  contracts  in  such  a  form  as  to  make  himself 
personally  responsible,  he  cannot  afterwards,  whether  his  principal 
were  or  were  not  known  at  the  time  of  the  contract,  relieve  himself 
from  that  responsibility."  And  this  is  also  laid  down  in  Story  on 
Agency,  §  269.  Magee  v.  Atkinson  is  a  direct  authority,  and  cannot 
be  distinguished  from  this  case. 

The  case  of  Wilson  v.  Hart,  7  Taunt.  295,  1  Moore,  45,  which  was 
cited  on  the  other  side,  is  clearly  distinguishable.  The  contract  in 
writing  was,  on  the  face  of  it,  with  another  person  named  Eead, 
appearing  to  be  the  principal  buyer ;  but  there  being  evidence  that  the 
defendant  fraudulently  put  forward  Eead  as  the  buyer,  whom  he 
knew  to  be  insolvent,  in  order  to  pay  a  debt  from  Eead  to  himself 
with  the  goods  purchased,  and  having  subsequently  got  possession  of 
them,  it  was  held,  on  the  principle  of  Hill  v.  Perrott,  3  Taunt.  274, 
and  other  cases,  that  the  defendant  was  liable;  and  as  is  observed 
by  Mr.  Smith  in  the  very  able  work  to  which  we  were  referred 
(Leading  Cases,  Vol.  11.  p.  125),  that  decision  turned  altogether 
upon  the  fraud,  and  if  it  had  not,  it  would  have  been  an  authority 
for  the  admission  of  parol  evidence  to  charge  the  defendant  not  to 
discharge  Eead.    .  Rule  discharged. 


BRIGGS   V.   PARTRIDGE. 

64  N.  Y.  357.     1876. 
[Reported  herein  at  page  410.] 


10.    Lidbility  of  Agent  Arising  from  Interest  in  Subject-matter. 

WOOLFE   V.   HORNE. 
2  Q.  B.  D.  355.     1877. 

Action  to  recover  damages  for  non-delivery  of  goods  sold  by  de- 
fendants, as  auctioneers,  to  plaintiff.  Plaintiff  was  non-suited. 
Order  to  show  cause  why  non-suit  should  not  be  set  aside  and  verdict 
entered  for  plaintiff.  Defendants  relied  upon  the  fact  that  they  sold 
as  agents  for  a  disclosed  principal. 

Mellor,  J.  I  am  of  opinion  that  the  verdict  must  be  entered  for 
the  plaintiff.    The  general  doctrine  with  regard  to  the  authority  of 


566  WILSON  V.   SMiXES.  [chap.   XV. 

auctioneers  is  laid  down  in  the  case  of  Williams  v.  Millington, 
1  H.  Bl.  81,  at  pp.  84,  85,  by  Lord  Loughborough,  who  says ;  "  An 
auctioneer  has  a  possession  coupled  with  an  interest  in  goods  which 
he  is  employed  to  sell,  not  a  bare  custody,  like  a  servant  or  shopman. 
There  is  no  difference  whether  the  sale  be  on  the  premises  of  the 
owner,  or  in  a  public  auction-room ;  for  on  the  premises  of  the  owner 
an  actual  possession  is  given  to  the  auctioneer  and  his  servants  by 
the  owner,  not  merely  an  authority  to  sell.  I  have  said  a  possession 
coupled  with  an  interest ;  but  an  auctioneer  has  also  a  special  property 
in  him,  with  a  lien  for  the  charges  of  the  sale,  the  commission,  and  the 
auction  duty,  which  he  is  bound  to  pay."  Now,  it  was  conceded  by 
the  counsel  for  the  defendants  that  an  auctioneer  is  entitled  to  sue 
for  the  price  of  goods  which  he  has  put  up  to  auction;  but  it  was 
contended  that  an  auctioneer  is  no  more  a  contracting  party,  and 
no  more  liable  to  be  sued,  than  a  broker  or  any  other  kind  of  agent. 
But,  having  regard  to  the  general  doctrine  which  I  have  stated,  and 
to,  the  conditions  of  sale  by  which  the  auctioneer  undertakes  to  de- 
liver the  goods,  and  particularly  to  the  condition  by  which,  in  case 
the  auctioneers  are  unable  to  deliver  any  lot,  the  purchaser  is  to 
accept  compensation,  I  think  that  in  the  present  case  the  auctioneer 
is  responsible  for  his  neglect  to  deliver. 

Then  it  was  contended  that  the  plaintiff  had  not  complied  with 
the  conditions  of  sale  as  to  the  removal  of  his  lot  within  three  days, 
and  that  he  had,  therefore,  no  right  of  action.  My  answer  to  this 
objection  is  that  these  stipulations  cannot  be  looked  upon  as  condi- 
tions precedent.  I  cannot  think  that  the  mere  fact  that  the  pur- 
chaser did  not  present  himself  till  Monday  morning  deprived  him 
of  the  right  to  claim  his  goods.  I  think,  therefore,  the  action  was 
properly  brought  against  the  auctioneers,  and  that  the  conditions 
afford  them  no  defence. 

Field,  J.,  concurred.  Order  absolute. 

11.    Where  neither  Principal  nor  Agent  is  Bound. 
LONG   V.   THAYER. 

150  U.  S.  520.     1893. 
[Reported  herein  at  p.  186.] 


WILSON   V.    SMALES. 

[1892]  1  Q.  B.  456. 

Action"  for  damages  against  agents.     The  agents,  having  doubt 
as  to  the  correctness  of  a  telegraphic  authority,  signed  the  contract 


CHAP.   XV.]  MONEY   RECEIVED  THEOUGH   MISTAKE.  567 

*'  by  telegraphic  authority  of  Sam  Eeischer,  —  Smales,  Eeles  &  Co., 
as  agents."  There  was  a  mistake,  and  Keischer  refused  to  be  bound. 
Plaintiffs  sue  the  agents  as  upon  a  warranty  of  authority.  Defendants 
contend  that  the  signature  negatives  a  warranty. 

Dexman,  J.  ...  It  appeared  from  the  evidence  of  trustworthy 
witnesses  for  the  defendants,  that  whenever  charters  are  entered  into 
by  brokers  in  accordance  with  telegraphic  instructions,  it  is  usual 
to  sign  in  this  form  with  the  very  object  of  avoiding  the  implication 
of  an  absolute  warranty.  I  see  no  reason  to  doubt  that  this  was  the 
real  object  of  the  defendants  in  signing  as  they  did;  and  this  being 
my  opinion,  I  think  that  there  can  be  no  ground  for  fixing  them  with 
a  warranty,  such  as  they  never  intended  to  give,  and  which  would  be 
wholly  inconsistent  with  the  general  understanding  of  persons  en- 
gaged in  the  business  in  which  they  were  employed.  I  therefore  give 
judgment  for  defendants  with  costs. 

Judgment  for  defendants. 


BALTZEN   V.    NICOLAY. 

53  N.  Y.  467.     1873. 
[Reported  herein  at  page  533.] 


12.  Liability  of  Agent  for  Money  Received  through  Mistake  or  Fraud. 

LA   FARGE   v.   KNEELAND. 
7  Cow.  (N.  Y.)  456.     1827. 

Assumpsit  to  recover  a  balance  of  an  advance  made  by  plaintiffs 
on  certain  cotton  consigned  to  them  by  defendant  acting  for  B.  & 
A.    Judgment  for  plaintiffs. 

When  defendant  received  the  advance  from  plaintiffs  it  was  carried 
to  the  credit  of  B.  &  A.,  who  already  had  a  balance  in  their  favor. 
Later  this  balance  was,  by  order  of  B.  &  A.,  credited  on  defendant's 
account  against  B.,  individually,  who,  after  such  credit,  still  owed 
defendant. 

Curia,  per  Savage,  C.  J.  (after  deciding  that  the  court  erred 
in  receiving  certain  testimony).  The  main  question  in  the  case  is, 
whether  the  defendant  can  be  made  liable,  he  having  disclosed  his 
principal  at  the  time  ?  And  if  that  alone  is  not  a  sufficient  defence, 
then  whether  he  has  so  paid  over  or  disposed  of  the  money,  as  to 
alter  his  relation  to  his  principals  in  respect  to  it. 


568  LA   FARGE   V,   KNEELAND.  [CHAP.   XV. 

The  general  rule,  no  doubt,  is  well  settled,  that  an  agent  who  dis- 
closes his  principal,  and  so  contracts  as  to  give  a  remedy  against  the 
principal,  is  not  liable  personally,  unless  it  was  clearly  his  intention 
to  assume  personal  responsibility.  But  where  money  has  been  paid 
to  an  agent  for  his  principal,  under  such  circumstances  that  it  may 
be  recovered  back  from  the  latter,  then  it  may  be  recovered  from 
the  agent,  provided  he  has  not  paid  it  to  his  principal,  nor  altered 
his  situation  in  relation  to  him;  for  instance,  by  giving  fresh  credit. 
That  point  was  so  decided  in  Buller  v.  Harrison,  Cowp.  565.  There 
was  in  that  case,  no  doubt  of  a  right  once  to  recover  from  the  prin- 
cipal ;  but  the  agent  of  the  defendant  had  given  credit  to  his  principal, 
and  rendered  him  his  account  containing  the  credit.  His  situation, 
however,  was  not  altered  in  any  other  respect.  Lord  Mansfield 
said  the  jury  were  embarrassed  with  the  question,  whether  this  was 
a  payment  over.  He  said,  for  some  purposes,  it  would  be  a  payment 
over ;  and  the  law  was  clear  that  an  agent  who  received  money  by 
mistake,  and  paid  it  over,  was  not  liable,  but  the  principal.  As  there 
was  no  alteration,  however,  in  the  situation  of  the  agent  in  relation 
to  his  principal,  it  was  held  wrong  that  he  should  be  in  any  better 
situation  than  if  the  mistake  had  not  happened.  It  was,  therefore, 
the  opinion  of  the  court,  that  the  agent  should  pay  back  the  money. 
In  Cox  V.  Prentice  (3  M.  &  S.  344),  Lord  Ellenborodgh  says,  "I 
take  it  to  be  clear  that  an  agent  who  receives  money  for  his  principal 
is  liable  as  a  principal,  so  long  as  he  stands  in  his  original  situation, 
and  until  there  has  been  a  change  of  circumstances,  by  his  having 
paid  over  the  money  to  his  principal,  or  done  something  equivalent 
to  it." 

In  this  case,  the  defendant  has  not  paid  over  the  money  to  Braham 
&  Atwood,  in  any  other  manner  than  by  passing  it  to  their  credit. 
There  was  then  a  large  balance  in  their  favor.  But  Bogart  &  Knee- 
land  had  also  an  account  with  Braham  alone,  who  did  business  upon 
his  own  account  as  well  as  in  connection  with  Atwood.  Atwood,  one 
of  the  partners,  was  in  New  York.  The  money  was  received  and 
credited  on  the  12th  of  November,  1818.  An  account  sales  was  ren- 
dered on  the  28th  of  the  same  month,  when  the  credit  due  to  Braham 
&  Atwood  was,  by  their  order,  transferred  to  the  credit  on  Braham's 
separate  account.  Had  this  transfer  been  made  to  the  account  of 
any  person  distinct  from  the  firm  of  Braham  &  Atwood,  it  would  be 
considered  equivalent  to  a  payment.  It  closed  the  concerns  of  Bogart 
&  Kneeland  with  Braham  &  Atwood.  Braham,  in  his  individual 
capacity,  had  nothing  to  do  with  Braham  &  Atwood.  I  think,  there- 
fore, the  judge  was  correct  in  charging  the  jury  that  this  was  such 
an  appropriation  of  the  money  as  excused  the  defendant  from  liability. 

The  ground  upon  which  agents  have  been  held  liable,  in  such 
cases,  is,  that  there  has  been  no  change  in  the  relative  situation  of 
the  parties.    Where  there  is  a  mere  passing  of  credit  on  the  books, 


CHAP.   XV,]         LIABILITY  OF  THIBD  PERSON   TO   AGENT.  569 

for  instance,  the  agent  still  has  it  in  his  power  to  redress  himself. 
It  is  not,  however,  in  the  power  of  Kneeland,  the  defendant,  to  alter 
the  credit  to  Braham.  He  cannot  retain  the  money,  as  he  might 
have  done  had  no  transfer  been  made.  Kneeland  virtually  paid  the 
money  to  Atwood,  and  received  the  same  amount  on  account  against 
Braham. 

I  think,  therefore,  the  plaintiffs  ought  not  to  recover,  and  that 
a  new  trial  should  be  granted. 

As  the  judge  erred  in  receiving  testimony,  and  as  the  question 
of  appropriation,  upon  which  the  jury  erred,  is  a  question  of  law 
(Cowper,  566),  I  think  the  costs  should  abide  the  event.  It  is  not 
strictly  a  verdict  against  evidence  only. 

Rule  accordingly. 


13.    Liability  of  Third  Person  to  Agent. 
KELLY   V.   THUEY. 

102  Mo.  522.     1890. 
[Reported  herein  at  page  539.] 


BEIGGS   V.   PARTEIDGE. 

64  N.  Y.  357.     1876. 
[Reported  herein  at  page  410.] 


ROWE   V.   RAND. 

Ill  Ind.  206.     1887. 

[Reported  herein  at  p.  166.] 


BTEVENSON   v.    MORTIMER. 

Cowp.  (K.  B.)  805.     1778. 
[Reported  herein  at  page  496.] 


570  LOUGH   V.   JOHN    DAVIS   &   CO.  [CHAP.   XVI. 


CHAPTER   XVI. 
Torts  between  Agent  and  Third  Party. 

1.    Liability  of  Agent  for  Non-feasance. 
LOUGH   V.   JOHN   DAVIS   &   CO.   et  al. 

30  Wash.  204.     1902. 

Action  by  Mona  Gertrude  Lough,  by  her  guardian  ad  litem,  Fred- 
erick Lough,  against  John  Davis  &  Co.,  a  corporation,  and  another. 
From  a  judgment  sustaining  a  demurrer  of  defendant  corporation 
to  the  complaint,  plaintiff  appeals. 

Dunbar,  J.  This  is  an  action  against  an  agent,  who  was  authorized 
to  rent  and  repair  the  tenement  house  described  in  the  complaint, 
for  permitting  the  house  to  become  unsafe  for  want  of  repairs,  from 
which  cause  the  plaintiff  was  injured.  Paragraph  2  of  the  complaint 
is  as  follows : 

"  That  at  all  said  times,  and  for  a  long  time  before,  the  above- 
named  defendant,  Sheldon  K.  Webb,  has  been  and  still  is  the  owner 
of  that  certain  real  property  known  as  lots  8  and  9,  in  block  38,  of 
A.  A.  Denny^s  addition  to  the  city  of  Seattle,  and  of  the  buildings 
thereon  situated,  and  that  the  above-named  defendant  John  Davis 
&  Co.  has  had,  and  still  has,  sole  and  absolute  control  and  manage- 
ment of  said  real  property  as  the  servant  and  agent  of  said  Sheldon 
E.  Webb,  with  full  power,  authority,  and  direction  from  their  said 
principal  to  rent  and  repair  the  same,  and  to  keep  the  same  in  repair 
and  safe  condition  for  tenants." 

The  other  pertinent  allegations  are  to  the  effect  that  a  wide  veranda, 
extending  along  two  sides  of  the  building  about  15  feet  from  the 
ground,  was  used  in  common  by  all  of  the  tenants,  and  was  inclosed 
by  a  railing ;  that  the  railing  was  allowed  to  become  old,  rotten,  and 
unsafe  through  the  negligence  of  the  defendants,  and  that,  while  the 
plaintiff  was  playing  on  said  veranda,  by  reason  of  the  unsafe  condi- 
tion, the  railing  gave  way,  and  she  fell  from  said  veranda  from  a  height 
of  15  feet  and  more  from  the  ground,  and  was  injured,  etc.  To  this 
complaint  the  defendant  John  Davis  &  Co.  interposed  a  demurrer 
on  the  ground  that  it  did  not  state  facts  sufficient  to  constitute  a 
cause  of  action  against  it,  the  demurring  defendant.  There  was  no 
appearance  by  Sheldon  K.  Webb.    The  demurrer  was  sustained,  and. 


CHAP.   XVI.]  LIABILITY   FOR   NON-FEASANCE.  571 

the  plaintiff  electing  to  stand  on  her  complaint,  judgment  was  entered 
on  the  demurrer.  From  such  judgment  sustaining  the  demurrer  this 
appeal  was  taken.  .  .  . 

It  is  the  contention  of  the  respondent  that  the  law  is  well  settled 
that  for  a  misfeasance  the  agent  is  personally  liable,  but  that  he  is 
never  liable  for  a  mere  non-feasance;  and  that,  the  respondent  being 
charged  only  with  a  non-feasance  or  neglect  to  do  its  duty,  and  not 
with  any  misfeasance  or  act  which  it  ought  not  to  do,  the  complaint 
on  its  face  shows  that  it  is  not  liable,  and  that  the  demurrer  was  there- 
fore properly  sustained.  This  rule  is  announced  by  some  of  the  law 
writers  and  many  of  the  courts.  One  of  the  leading  cases  sustaining 
this  doctrine  is  Delaney  v.  Eochereau,  34  La.  Ann.  1123,  where  it  was 
held  that  under  the  doctrine  of  both  the  common  and  civil  law  agents 
are  not  liable  to  third  persons  for  non-feasance  or  mere  omissions  of 
duty,  being  responsible  to  such  parties  only  for  the  actual  commission 
of  those  positive  wrongs  for  which  they  would  be  otherwise  account- 
able in  their  individual  capacity  under  obligations  common  to  all  men. 
In  this  case  a  balcony  which  needed  repairs  fell,  fatally  injuring  the 
plaintiff;  and,  while  the  agent  was  not  responsible  for  the  injured 
party's  being  in  the  house  at  that  particular  time,  —  he  having  ob- 
tained entrance  by  means  of  a  key  obtained  from  some  one  else,  — 
the  case  is  discussed  and  the  judgment  based  upon  the  doctrine  above 
announced.  This  is  also  the  established  doctrine  in  New  York.  The 
case  of  Carey  v.  Eochereau  (C.  C.)  16  Fed.  87,  is  a  Louisiana  case, 
and  bases  its  decision  on  Delaney  v.  Eochereau,  supra,  without  discus- 
sion. Labadie  v.  Hawley,  61  Tex.  177,  held,  in  accordance  with  the 
same  rule,  that  an  agent  renting  his  principal's  house  with  authority 
to  construct  a  cooking  range  was  not  liable  for  injury  to  an  adjoining 
proprietor,  caused  by  the  use  of  the  range;  citing  Story,  Ag.  309, 
and  other  authorities.  In  Feltus  v.  Swan,  62  Miss.  415,  it  was  held 
that  an  agent  in  charge  of  a  plantation  was  not  liable  to  the  owner 
of  an  adjoining  plantation  for  damage  resulting  from  the  malicious 
neglect  and  refusal  of  the  agent  to  keep  open  a  drain  which  it  was 
his  duty  as  such  agent  to  keep  open.  The  announcement  of  this  doc- 
trine is  accredited  by  many  of  the  courts  indorsing  it  to  the  opinion 
in  Lane  v.  Cotton,  12  Mod.  472,  but  it  was,  as  a  matter  of  fact, 
announced  only  incidentally  in  that  case  in  a  dissenting  opinion.  The 
question  of  the  responsibility  of  the  agent  could  not  have  been  before 
that  court,  for  the  action  was  against  a  postmaster  for  the  loss  of 
a  letter  which  was  taken  from  the  mail  by  a  clerk,  and  it  was  only  the 
responsibility  of  the  master,  and  not  that  of  the  servant  or  agent, 
■which  was  under  discussion. 

The  reason  assigned  to  sustain  this  rule  is  that  the  responsibility 
must  arise  from  some  express  or  implied  obligations  between  the 
particular  parties  standing  in  privity  of  law  or  contract  with  each 
other.    If  this  be  true,  it  is  difficult  to  see  what  difference  there  is 


672  LOUGH   V.   JOHN   DAVIS   &    CO.  [CHAP.    XVI. 

in  the  obligation  to  their  principal  between  the  commission  of  an 
act  by  the  agents  which  they  are  bound  to  their  principal  not  to  do 
and  the  omission  of  an  act  which  they  have  obligated  themselves  to 
their  principal  to  do.  They  certainly  stand  in  privity  of  law  or  con- 
tract with  their  principal  exactly  as  much  in  the  one  instance  as  in 
the  other,  for  the  obligation  to  do  what  ought  to  be  done  is  no  more 
strongly  implied  in  the  ordinary  contract  of  agency  than  is  the  obliga- 
tion not  to  do  what  ought  not  to  be  done.  This  reason  for  the  rule 
not  being  tenable,  and  no  other  reason  being  obvious,  the  rule  itself 
ought  not  to  obtain;  for  jurisprudence  does  not  concern  itself  with 
such  attenuated  refinements.  It  rests  upon  broad  and  comprehensive 
principles  in  its  attempt  to  promote  rights  and  redress  wrongs.  If 
it  takes  note  of  a  distinction,  such  distinction  will  be  a  practical  one, 
founded  on  a  difference  in  principle,  and  not  a  distinction  without 
a  difference ;  and  there  can  be  no  distinction  in  principle  between  the 
acts  of  a  servant  who  puts  in  motion  an  agency  which,  in  its  wrongful 
operation,  injures  his  neighbor,  and  the  acts  of  a  servant  who,  when 
he  sees  such  agency  in  motion,  and  when  it  is  his  duty  to  control  it, 
negligently  refuses  to  do  his  duty,  and  suffers  it  to  operate  to  the 
damage  of  another.  There  is  certainly  no  difference  in  moral  respon- 
sibility; there  should  be  none  in  legal  responsibility.  Of  course,  if 
the  omission  of  the  act  or  the  non-feasance  does  not  involve  a  non- 
performance of  duty,  then  the  responsibility  would  not  attach.  If  it 
does  not  involve  a  non-performance  of  duty  to  such  an  extent  that 
the  agent  is  liable  to  the  principal  for  the  damages  ensuing  from  his 
neglect,  there  is  no  hardship  in  compelling  him  to  respond  directly 
to  the  injured  party.  Such  practice  is  less  circuitous  than  that  which 
necessitates  first  the  suing  of  the  master  by  the  party  injured,  and 
then  a  suit  by  the  master  against  the  servant  to  recoup  the  damages. 

But  the  honorable  judge  who  wrote  the  opinion  in  Delaney  v.  Roch- 
ereau,  supra,  was  mistaken  in  his  announcement  that  the  civil  law 
indorsed  the  distinction  upon  which  his  decision  was  based,  for,  while 
the  doctrine  is  stated  in  the  Justinian  Code  that  no  man  could 
usually  be  made  liable  for  a  mere  omission  to  act,  it  was  otherwise 
when  the  omission  to  act  involved  a  negligence  of  duty.  Domat  argues 
that,  as  an  agent  is  at  liberty  not  to  accept  the  order  and  power  which 
are  given  him,  so  he  is  bound,  if  he  does  accept  the  order,  to  execute 
it ;  and,  if  he  fail  to  do  so,  he  will  be  liable  for  the  damages  which  he 
shall  have  occasioned  by  his  not  acting.  Under  the  Aquilian  law  the 
distinction  between  omission  and  commission  was  not  recognized 
under  such  circumstances.  In  the  ninth  Digest  of  the  Aquilian  law 
the  following  instance  is  given :  One  servant  lights  a  fire,  and  leaves  it 
to  another.  The  latter  neglects  to  check  the  fire  at  the  proper  time 
and  place,  and  a  villa  is  burned.  The  first  servant  was  charged  with 
no  negligence,  because  it  was  his  duty  to  light  the  fire,  and  it  is 
argued,  very  sensibly,  that,  if  the  second  could  not  be  charged  be- 


CHAP.    XVI.]  LIABILITY   FOR   NON-FEASANCE.  5T3 

cause  not  putting  out  the  fire  was  simply  an  omission  of  duty,  there 
would  be  a  miscarriage  of  justice.  Is  the  keeper  of  a  draw-bridge, 
whose  duty  it  is  to  close  the  draw  after  a  ship  passes  through,  and 
who  negligently  fails  to  perform  that  duty,  allowing  a  car  loaded  with 
passengers  to  be  hurled  into  the  river  below,  to  escape  responsibility 
to  the  injured,  while  the  man  who  attempts  to  operate  it,  but,  in  so 
attempting,  operates  it  negligently  and  unskilfully,  is  held  respon- 
sible? Instances  in  the  ordinary  transactions  of  life  might  be 
multiplied  almost  without  end,  the  very  statement  of  which  shows 
conclusively  the  fallacy  of  the  rule. 

The  attempt  by  the  courts  to  maintain  this  indistinguishable  dis- 
tinction has  led  to  many  inconsistent  decisions.  Thus,  in  Albro  v. 
Jaquith,  4  Gray,  99,  the  plaintiff  was  not  allowed  to  recover  of  the 
superintendent  of  a  canal  company  for  damages  caused  by  negligence 
in  the  management  of  the  apparatus  used  for  the  purpose  of  generat- 
ing, containing,  and  burning  inflammable  gas;  the  superintendent 
being  the  agent  of  the  company,  and  being  charged  with  carelessly, 
negligently,  and  unskilfully  managing  the  business.  It  was  held 
that  he  was  not  charged  with  any  direct  act  of  misfeasance,  but  only 
with  non-feasance,  and  that  there  was  no  redress,  because,  as  the 
court  said,  the  obligation  to  be  faithful  and  diligent  was  founded  in 
an  express  contract  with  his  principal.  As  we  have  before  indicated, 
this  would  be  equally  true  of  the  acts  of  commission  or  misfeasance 
in  his  stewardship.  But  in  Bell  v.  Josselyn,  3  Gray,  309,  —  also  a 
Massachusetts  case,  and  decided  the  same  year,  —  it  was  held  that 
an  agent  who  negligently  directed  water  to  be  admitted  to  a  water 
pipe  was  liable  to  a  third  person,  because  such  action  was  misfeasance. 
In  that  case  it  was  not  claimed  that  the  admission  of  water  to  the 
pipe  was  negligent  or  wrongful,  but  the  negligent  act  or  omission  was 
in  allowing  the  pipe  to  become  obstructed,  —  certainly  as  pure  an 
omission  or  non-feasance  as  could  be  conceived  of.  But  the  court, 
in  order  to  maintain  the  distinction  which  it  deemed  itself  bound  by 
precedent  to  do,  virtually  obliterated  the  distinction  by  the  following 
circuitous  reasoning :  "  The  defendant's  omission  to  examine  the 
state  of  the  pipes  in  the  house  before  causing  the  water  to  be  let  on 
was  a  non-feasance.  But  if  he  had  not  caused  the  water  to  be  let  on, 
that  non-feasance  would  not  have  injured  the  plaintiff.  If  he  had 
examined  the  pipes,  and  left  them  in  a  proper  condition,  and  then 
caused  the  letting  on  of  the  water,  there  would  have  been  neither 
non-feasance  or  misfeasance.  As  the  facts  are,  the  non-feasance  caused 
the  act  done  to  be  a  misfeasance.  But  from  which  did  the  plaintiff 
suffer?  Clearly,  from  the  act  done,  which  was  not  less  a  misfeasance 
by  reason  of  it  being  preceded  by  a  non-feasance." 

Much  more  cogent  and  judicial  is  the  reasoning  of  the  same  court 
many  years  after  in  Osborne  v.  Morgan,  130  Mass.  102,  39  Am.  Rep. 
437,  where  an  agent  of  premises  was  held  responsible  to  a  third  person 


674  LOUGH   V.   JOHN   DAVIS   &   CO.  [CHAP.   XVI. 

for  suffering  to  remain  suspended  from  a  room  a  tackle  block,  which 
fell  upon  and  injured  the  plaintiff.  The  court,  speaking  through 
Chief  Justice  Gray,  said :  "  The  principal  reason  assigned  was  that 
no  misfeasance  or  positive  act  of  wrong  was  charged,  and  that  for 
non-feasance,  —  which  was  merely  negligence  in  the  performance  of 
a  duty  arising  from  some  express  or  implied  contract  with  his  prin- 
cipal or  employer,  —  an  agent  or  servant  was  responsible  to  him  only, 
and  not  to  any  third  person.  It  is  often  said  in  the  books  that  an 
agent  is  responsible  to  third  persons  for  misfeasance  only,  and  not  for 
non-feasance.  And  it  is  doubtless  true  that,  if  an  agent  never  does 
anything  towards  carrying  out  his  contract  with  his  principal,  but 
wholly  omits  and  neglects  to  do  so,  the  principal  is  the  only  person 
who  can  maintain  any  action  against  him  for  the  non-feasance.  But 
if  the  agent  once  actually  undertakes  and  enters  upon  the  execution 
of  a  particular  work,  it  is  his  duty  to  use  reasonable  care  in  the 
manner  of  executing  it,  so  as  not  to  cause  any  injury  to  third  persons 
which  may  be  the  natural  consequence  of  his  acts ;  and  he  cannot,  by 
abandoning  its  execution  midway,  and  leaving  things  in  a  dangerous 
condition,  exempt  himself  from  liability  to  any  person  who  suffers 
injury  by  reason  of  his  having  so  left  them  without  proper  safeguards. 
This  is  not  non-feasance,  or  doing  nothing;  but  it  is  misfeasance, 
doing  improperly." 

There  is  still  another  class  of  cases  which  hold  what  seems  to  us 
to  be  the  correct  doctrine,  viz.,  that  the  obligation,  whether  for  mis- 
feasance or  non-feasance,  does  not  rest  in  contract  at  all,  but  is  a 
common-law  obligation  devolving  upon  every  responsible  person  to 
so  use  that  which  he  controls  as  not  to  injure  another,  whether  he 
is  in  the  operation  of  his  own  property  as  principal  or  in  the  opera- 
tion of  the  property  of  another  as  agent.  One  of  the  leading  cases 
maintaining  this  view  is  Baird  v.  Shipman,  a  case  decided  in  1890, 
and  reported  in  132  111.  16.  There  it  was  held  that  an  agent  who 
has  complete  control  of  a  house  belonging  to  an  absent  principal,  and 
who  lets  the  house  in  a  dangerous  condition,  promising  to  repair  it, 
is  responsible  to  the  third  person  injured  by  an  accident  caused  by 
want  of  such  repair.  There  is  nothing  to  distinguish  this  case  from 
the  case  at  bar  excepting  the  promise  to  repair,  and  that  does  not 
Beem  to  have  been  deemed  by  the  court  an  important  feature;  but 
the  case  was  decided  upon  the  broad  principle  above  announced.  Said 
the  court :  "  It  is  not  his  contract  with  the  principal  which  exposes 
him  to  or  protects  him  from  liability  to  third  persons,  but  his 
common-law  obligation  to  so  use  that  which  he  controls  as  not  to  in- 
jure another.  That  obligation  is  neither  increased  nor  diminished 
by  his  entrance  upon  the  duties  of  agency,  nor  can  its  breach  be  ex- 
cused by  the  plea  that  his  principal  is  chargeable.  ...  If  the  agent 
once  actually  undertakes  and  enters  upon  the  execution  of  a  particular 
work,  it  is  his  duty  to  use  reasonable  care  in  the  manner  of  executing 


CHAP,   XVI.]  LIABILITY   FOR  NON-FEASANCE.  575 

it,  SO  as  not  to  cause  any  injury  to  third  persons  which  may  be  the 
natural  consequence  of  his  acts,"  —  citing  approvingly  Osborne  v. 
Morgan,  supra.  To  the  same  effect  is  Mayer  v.  Building  Co.,  104: 
Ala.  611.  The  court  there,  after  noticing  the  doctrine  that  the  agent 
can  be  held  liable  to  third  persons  for  misfeasance  only,  says :  "  It 
is  difficult  to  apply  the  same  principles  which  govern  in  matters  of 
contract  between  an  agent  and  third  persons  to  the  torts  of  an  agent 
which  inflict  injury  on  third  persons,  whether  they  be  of  misfeasance  or 
non-feasance,  or  to  give  a  sound  reason  why  a  person  who,  while  acting 
as  principal,  would  be  individually  liable  to  third  persons  for  an  omis- 
sion of  duty,  becomes  exempt  from  liability  for  the  same  omission  of 
duty  because  he  was  acting  as  servant  or  agent.  The  tort  is  none  the 
less  a  tort  to  the  third  person  whether  suffered  from  one  acting  as  prin- 
cipal or  agent,  and  his  rights  ought  to  be  the  same  against  the  one 
whose  neglect  of  duty  has  caused  the  injury."  In  that  case  Baird  v. 
Shipman,  supra,  is  cited  approvingly,  with  the  remark  that  the  rule 
laid  down  in  that  case  is  the  better  rule.  So,  in  Ellis  v.  McISTaughton, 
76  Mich.  237,  it  was  held  that  an  agent  who  had  entire  control  of 
premises  was  liable  for  injuries  resulting  from  the  removal  of  a  walk 
on  the  premises  by  one  of  his  employees,  contrary  to  his  orders,  if, 
after  such  removal,  he  knew  of  the  dangerous  condition  of  the  prem- 
ises, and  allowed  them  to  remain  in  that  condition.  It  would  seem 
that,  if  there  is  anything  in  definitions,  this  was  a  pure  non-feasance, 
and  yet  the  court,  in  trying  to  harmonize  the  distinction  with  the 
general  rule  announced  and  above  discussed,  said,  speaking  of  the 
agent's  duty  in  relation  to  the  work :  "  Every  day  it  was  so  permitted 
to  remain,  when  the  defendant  had  the  entire  control  of  it,  and  the 
authority,  without  question,  to  replace  it,  was  a  wrong  and  a  misfeas- 
ance." It  is  also  said  that,  irrespective  of  his  principal,  the  agent 
was  bound  while  doing  the  work  to  so  use  the  premises,  including  the 
fiidewalk,  as  not  to  injure  others.  Misfeasance,  said  the  court,  may 
involve  the  omission  to  do  something  which  ought  to  be  done,  —  as 
when  an  agent  engaged  in  the  performance  of  his  undertaking  omits 
to  do  something  which  it  is  his  duty  to  do  under  the  circumstances, 
as  when  he  does  not  exercise  that  degree  of  care  which  due  regard  for 
the  rights  of  others  required.  To  the  same  effect,  Campbell  v.  Sugar 
Co.,  62  Me.  552.  In  Lottman  v.  Barnet,  62  Mo.  159,  it  was  held 
that  one  having  the  general  charge  and  superintendence  of  the  con- 
struction of  a  building  was  responsible  for  the  killing  of  a  workman 
caused  by  the  falling  of  a  wall,  which  resulted  from  the  giving  way  of 
supports  on  which  the  wall  rested  under  the  working  of  a  jackscrew, 
although  the  appliance  was  put  to  work  under  the  immediate  direc- 
tion of  another  person,  employed  by  the  owner  of  the  building,  and 
while  the  architect  was  absent,  where  it  appeared  that  the  manager  of 
the  jackscrew  was  employed  under  the  advice  of  the  architect,  and  sub- 
ject to  his  discretion,  and  that  he  knew  and  approved  of  the  method 


576  LOUGH   V.   JOHN   DAVIS   &   CO.  [CHAP.   XVI. 

adopted  for  effecting  the  raising.  Whether  the  wall  fell  because  the 
plan  for  raising  it  was  a  bad  one,  or  because  the  supports  were  inade- 
quate, it  was  held  that  in  either  case  the  disaster  was  attributable  to 
positive  misfeasance  for  negligence  in  a  work  which  the  architect 
had  undertaken,  but  in  which  he  failed  to  exhibit  the  care  and  skill 
which  the  law  imposed  upon  him. 

To  make  this  distinction  more  shadowy,  if  possible,  Mr.  Mechem, 
in  his  work  on  Agency  (sect.  572),  after  announcing  the  general 
rule,  says :  "  Some  confusion  has  crept  into  certain  cases  from  a 
failure  to  observe  clearly  the  distinction  between  non-feasance  and 
misfeasance.  As  has  been  seen,  the  agent  is  not  liable  to  stran- 
gers for  injuries  sustained  by  them  because  he  did  not  undertake 
the  performance  of  some  duty  which  he  owed  to  his  principal, 
and  imposed  upon  him  by  his  relation,  which  is  non-feasance.  Mis- 
feasance may  involve,  also,  to  the  same  extent,  the  idea  of  not  doing, 
—  as  where  the  agent,  while  engaged  in  the  performance  of  his 
tmdertaking,  does  not  do  something  which  it  was  his  duty  to  do 
under  the  circumstances ;  does  not  take  that  precaution  —  does 
not  exercise  that  care  —  which  a  due  regard  for  the  rights  of 
others  requires.  All  this  is  not  doing,  but  it  is  not  the  not-doing 
of  that  which  is  imposed  upon  the  agent  merely  by  virtue  of  his 
relation,  but  of  that  which  is  imposed  upon  him  by  law  as  a  respon- 
sible individual  in  common  with  all  other  members  of  society.  It 
is  the  same  not-doing  which  constitutes  actionable  negligence  in  any 
relation."  The  author  then  quotes  approvingly  the  language  of  Chief 
Justice  Gray  in  Osborne  v.  Morgan,  supra,  and  of  Judge  Metcalf  in 
Bell  V.  Josselyn,  supra,  so  that  it  will  be  seen  that,  even  according  to 
Mr.  Mechem,  a  lack  of  care  and  a  lack  of  precaution,  when  once  the 
duty  is  assumed,  are  as  much  misfeasance  as  an  active  misdoing. 
The  irresistible  logic  of  his  statement  is  that  the  agent  is  responsible 
to  third  persons  when  he  is  negligent  in  the  performance  of  the  duties 
which  he  undertakes,  whether  such  act  be  termed  misfeasance  or 
non-feasance. 

The  rule  is  thus  announced  in  1  Am.  &  Eng.  Enc.  Law  (1st  ed.), 
p.  407 :  "  Where  a  principal  engages  an  agent  to  do  a  certain  work, 
and  to  take  entire  control  over  it,  while  the  principal  does  not  inter- 
fere, but  leaves  it  entirely  with  the  agent,  the  agent,  and  not  the  prin- 
cipal, will  be  liable  to  third  parties  for  injuries  or  damages  sustained 
by  the  negligence  or  unskillful  manner  in  which  the  work  is  done." 
The  question  of  whether  or  not  the  principal  is  liable  is  not  under 
discussion  here.  In  the  same  section,  and  in  another  paragraph,  that 
author  announces  that  an  agent  is,  in  general,  not  liable  to  third  par- 
ties for  acts  of  negligence  for  non-performance  of  duty ;  that  as  such 
he  is  only  responsible  to  the  principal,  and  the  principal  to  the  third 
party.  So  that  in  the  mind  of  the  author  the  distinction  must  have 
been  established  between  an  agent  that  did  not  have  complete  or  entire 


CHAP.   XVI.]  LIABILITY   FOR   NON-FEASANCE.  677 

control  and  one  who  did.    There  is  no  other  way  of  harmonizing  the 

two  statements. 

This  is,  in  effect,  the  same  rule  enunciated  by  Mr.  Wharton  in 
his  work  on  Agency  (sect.  538).  Under  the  announcement  that 
"  wherever  there  is  liberty  there  is  liability,"  it  is  said :  "  Hence,  to 
strike  at  the  general  principle  that  lies  at  the  basis  of  the  adjudication 
we  have  just  noticed,  wherever  the  agent  is  at  liberty  to  choose  his 
own  mode  of  action,  then  he  is  distinctively  liable  in  damages,  if  by 
such  mode  of  action  he  invades  another's  rights."  The  same  doctrine 
is  announced  in  section  537,  where  it  is  said :  "  Where  an  agent, 
who  has  general  liberty  of  action,  injures  a  third  person,  there  the 
agent  is  personally  liable  for  negligent  as  well  as  for  malicious  acts." 
The  author  here  discriminates  between  an  agent  and  a  servant,  hold- 
ing that  a  servant  is  a  part  of  the  machinery  by  which  the  master 
works,  and  there  is  no  emancipation  or  liberty  of  action ;  but  that  this 
reasoning  does  not  apply  to  agents  who  have  complete  control,  and 
therefore  perfect  liberty  of  action.  Doubtless  much  of  the  mist  and 
fog  which  have  enveloped  the  decisions  on  this  subject  is  due  to  con- 
fusing the  omission  of  an  act  which  one  is  not  bound  to  perform 
with  the  imperfect  performance  of  an  act  to  which  he  is  bound.  In 
other  words,  whoever  undertakes  a  duty,  and  is  clothed  with  authority 
to  perform  that  duty,  is  responsible  to  the  party  injured  for  negligent 
imperfection  in  the  discharge  of  such  duty,  on  the  broad  doctrine 
announced  above  that  he  is  obligated  in  transacting  business  to  so 
transact  it  that  his  neighbor  shall  not  thereby  be  injured ;  but  there 
is  no  liability  for  the  non-performance  of  a  duty  not  assumed,  or  not 
independently  controlled.  But  for  neither  the  non-performance  nor 
mal-performance  of  a  positive  duty  can  one  escape  responsibility, 
whether  that  duty  is  imposed  by  contract  or  by  general  obligation,  for 
under  any  and  all  circumstances  it  is  the  essence  of  negligence  to 
omit  to  do  something  which  ought  to  be  done.  While  some  detached 
expressions  of  Mr,  Wharton  have  been  quoted  in  support  of  the  dis- 
tinction contended  for  by  the  respondent,  that  author  puts  the  ques- 
tion at  rest  in  his  work  on  the  Law  of  Negligence  (2d  ed.,  sect.  539), 
where  he  says :  "  The  mere  fact  that  I  am  the  agent,  in  doing  the 
injurious  act  of  another,  does  not  relieve  me  from  liability  to  third 
persons  for  hurt  this  act  inflicts  on  them.  Judge  Story,  indeed,  tells 
us  that  for  omissions  of  the  agent  the  principal  alone  is  liable,  while 
for  misfeasances  the  agent  is  also  liable;  but  this  distinction,  as  has 
been  already  shown,  can  no  longer  be  sustained.  The  true  doc- 
trine is  that  when  an  agent  is  employed  to  work  on  a  particular 
thing,  and  has  surrendered  the  thing  in  question  into  the  princi- 
pal's hands,  then  the  agent  ceases  to  be  liable  to  third  persons  for 
hurt  received  by  them  from  such  thing,  though  the  hurt  is  remotely 
due  to  the  agent's  negligence;  the  reason  being  that  the  casual  re- 
lation between  the  agent  and  the  person  hurt  is  broken  by  the  inter- 

87 


678  WEBEB  V.   WiEBER.  [OHAP.   XVI. 

position  of  the  principal  as  a  distinct  centre  of  legal  responsibilities 
and  duties.  But  wherever  there  is  no  such  interruption  of  casual 
connection,  —  in  other  words,  wherever  the  agent's  negligence  directly 
injures  a  stranger,  the  agent  having  liberty  of  action  in  respect  to  the 
injury,  —  then  such  stranger  can  recover  from  the  agent  damages  for 
the  injury." 

There  is  some  contention  in  respondent's  brief  on  the  alleged  bar- 
renness of  the  allegations  of  the  complaint,  but  we  think  the  alle- 
gations were  ample  to  show  that  the  respondent  was  authorized  to 
keep  the  building  in  repair;  that  it  undertook  that  office  or  duty, 
and  was  in  complete  control  of  the  work.  It  is  alleged  that  it  was  in 
absolute  control  and  management,  with  full  power,  authority,  and 
direction  to  repair,  and  to  allege  that  it  agreed  to  do  so  would  only 
be  to  allege  the  agreement  to  do  the  duty  which  the  law  imposed  upon 
it  after  it  had  assumed  the  control  and  management  which  is  alleged. 

Our  conclusion  is  that  the  complaint  states  a  cause  of  action  against 
the  respondent.  The  judgment  is  therefore  reversed,  with  instruct 
tions  to  the  lower  court  to  overrule  the  demurrer  to  the  complaint. 

Eeavis,  C.  J.,  and  Anders^  Mount^  and  Fullerton,  JJ.,  concur. 


Z.   Liability  of  Agent  for  Misfeasance. 
WEBER   V.   WEBEE. 

47  Mich.  569.     1882. 

Campbell,  J.  Plaintiff  sued  defendant  in  case  for  making  false 
representations  to  him  concerning  the  freedom  from  incumbrance  of 
certain  land  which  she  sold  to  him  as  agent  for  her  husband,  Henry 
Weber.  The  declaration  contains  full  averments  showing  the  pur- 
chase and  payment  to  have  been  made  in  reliance  on  these  representa- 
tions,—  their  wilful  falsehood,  and  the  loss  of  the  entire  premises 
by  sale  under  the  mortgage  which  existed,  and  which  defendant  had 
said  did  not  exist,  by  declaring  that  there  was  no  incumbrance 
whatever. 

Defendant  demurred  to  the  declaration  on  the  grounds,  first,  that 
defendant  was  Henry  Weber's  wife,  and  that  he  should  have  been 
made  co-defendant;  second,  that  defendant  is  not  averred  to  have 
been  interested  in  the  property;  third,  that  it  does  not  appear  the 
representations  were  made  at  Henry  Weber's  request  and  by  his  au- 
thority; and  fourth,  that  the  mortgage  being  recorded  was  notice. 
The  court  below  sustained  the  demurrer,  and  gave  judgment  for 
defendant. 

It  is  not  now  claimed  that  the  fact  that  the  mortgage  was  recorded 


CHAP.   XVI.]  LIABILITY   FOR   MISFEASANCE.  579 

was  of  any  importance.  Where  positive  representations  are  made  con- 
cerning a  title  for  fraudulent  purposes,  and  are  relied  on,  it  can 
hardly  be  insisted  that  what  would  be  merely  constructive  notice  in 
the  absence  of  such  declarations  will  prevent  a  person  from  having 
the  right  to  rely  on  statements  which,  if  true,  would  render  a  search 
unnecessary.  And  it  is  not  necessarily  true  that  a  recorded  mort- 
gage is  unpaid,  merely  because  not  discharged. 

Neither  is  it  true  that  an  agent  is  exempt  from  liability  for  fraud 
knowingly  committed  on  behalf  of  his  principal.  A  person  cannot 
avoid  responsibility  merely  because  he  gets  no  personal  advantage 
from  his  fraud.  All  persons  who  are  active  in  defrauding  others 
are  liable  for  what  they  do,  whether  they  act  in  one  capacity  or  an- 
other. No  one  can  lawfully  pursue  a  knowingly  fraudulent  employ- 
ment; and,  while  it  may  be  true  that  the  principal  is  often  liable  for 
the  fraud  of  his  agent,  though  himself  honest,  his  own  fraud  will  not 
exonerate  his  fraudulent  agent.  Starkweather  v.  Benjamin,  32  Mich. 
305 ;  Josselyn  v.  McAllister,  22  Mich.  300. 

If  liable  at  all,  the  agent  may  as  well  be  sued  separately  as  any 
other  joint  wrongdoer.  It  is  not  usually  necessary  to  sue  jointly  in 
tort.  And  we  do  not  think  that  under  our  present  statutes  the  case 
of  husband  and  wife  makes  any  different  rule  applicable.  At  common 
law  the  husband  was  liable  personally  for  his  wife's  torts,  and  she 
could  not  be  sued  without  him.  But  under  our  statutes  now,  that 
liability  has  been  abolished,  and  she  is  solely  responsible  for  them. 
Comp.  L.  §§  6129,  7382.  This  being  the  case,  we  can  see  no  ground 
for  joining  them  in  a  suit,  unless  both  are  sued  as  wrongdoers.  The 
evident  purpose  of  the  law  was  to  put  him,  as  to  her  personal  wrongs, 
on  the  same  footing  with  any  third  person. 

•  The  demurrer  should  have  been  overruled.  The  judgment  below 
must  be  reversed,  with  costs  of  both  courts,  and  the  defendant  re- 
quired to  answer  over  within  twenty  days. 


SWIM   v.   WILSON. 

90  Cal.  126.     1891. 

De  Haven,  J.  The  plaintiff  was  the  owner  of  one  hundred  shares 
of  stock  of  a  mining  corporation,  issued  to  one  H.  B.  Parsons,  trustee, 
and  properly  indorsed  by  him.  This  stock  was  stolen  from  plaintiff  by 
an  employee,  in  his  office,  and  delivered  for  sale  to  the  defendant,  who 
was  engaged  in  the  business  of  buying  and  selling  stocks  on  commis- 
sion. At  the  time  of  placing  the  stock  in  defendant's  possession,  the 
thief  represented  himself  as  its  owner,  and  the  defendant,  relying 
upon  this  representation,  in  good  faith,  and  without  any  notice  that 


580  SWIM   V.   WILSON.  [chap.   XVI. 

the  stock  was  stolen,  sold  the  same  in  the  usual  course  of  business,  and 
subsequently,  still  without  any  notice  that  the  person  for  whom  he 
had  acted  in  making  the  sale  was  not  the  true  owner,  paid  over  to  him 
the  net  proceeds  of  such  sale.  Thereafter,  the  plaintiff  brought  this 
action  to  recover  the  value  of  said  stock,  alleging  that  the  defendant 
had  converted  the  same  to  his  owa  use,  and  the  facts  as  above  stated 
appearing,  the  court  in  which  the  action  was  tried  gave  judgment 
against  defendant  for  such  value,  and  from  this  judgment,  and  an 
order  refusing  him  a  new  trial,  the  defendant  appeals. 

It  is  clear  that  the  defendant's  principal  did  not,  by  stealing  plain- 
tiff's property,  acquire  any  legal  right  to  sell  it ;  and  it  is  equally  clear 
that  the  defendant,  acting  for  him,  and  as  his  agent,  did  not  have  any 
greater  right,  and  his  act  was  therefore  wholly  unauthorized,  and  in 
law  was  a  conversion  of  plaintiff's  property. 

"  It  is  no  defence  to  an  action  of  trover  that  the  defendant  acted  as 
the  agent  of  another.  If  the  principal  is  a  wrongdoer,  the  agent  is 
a  wrongdoer  also.  A  person  is  guilty  of  a  conversion  who  sells  the 
property  of  another  without  authority  from  the  owner,  notwithstand- 
ing he  acts  under  the  authority  of  one  claiming  to  be  the  owner,  and 
is  ignorant  of  such  person's  want  of  title."  Kimball  v.  Billings,  55 
Me.  147 ;  93  Am.  Dec.  581 ;  Coles  v.  Clark,  3  Cush.  399 ;  Koch  v. 
Branch,  44  Mo.  542 ;  100  Am.  Dec.  324. 

In  Stephens  v.  Elwall,  4  Maule  &  S.  259,  this  principle  was  applied 
where  an  innocent  clerk  received  goods  from  an  agent  of  his  employer, 
and  forwarded  them  to  such  employer  abroad,  and  in  rendering  his 
decision  on  the  case  presented.  Lord  Ellenboeough  uses  this  lan- 
guage :  "  The  only  question  is,  whether  this  is  a  conversion  in  the 
clerk,  which  undoubtedly  was  so  in  the  master.  The  clerk  acted 
imder  an  unavoidable  ignorance,  and  for  his  master's  benefit,  when 
he  sent  the  goods  to  his  master ;  but,  nevertheless,  his  acts  may 
amount  to  a  conversion ;  for  a  person  is  guilty  of  conversion  who  in- 
termeddles with  my  property,  and  disposes  of  it,  and  it  is  no  answer 
that  he  acted  under  the  authority  of  another  who  had  himself  no 
authority  to  dispose  of  it." 

To  hold  the  defendant  liable,  imder  the  circumstances  disclosed 
here,  may  seem  upon  first  impression  to  be  a  hardship  upon  him.  But 
it  is  a  matter  of  every-day  experience  that  one  cannot  always  be 
perfectly  secure  from  loss  in  his  dealings  with  others,  and  the  defend- 
ant here  is  only  in  the  position  of  a  person  who  has  trusted  to  the 
honesty  of  another,  and  has  been  deceived.  He  undertook  to  act  as 
agent  for  one  who,  it  now  appears,  was  a  thief,  and,  relying  on  his 
representations,  aided  his  principal  to  convert  the  plaintiff's  property 
into  money,  and  it  is  no  greater  hardship  to  require  him  to  pay  to 
the  plaintiff  its  value  than  it  would  be  to  take  the  same  away  from  the 
innocent  vendee,  who  purchased  and  paid  for  it.  And  yet  it  is  univer- 
sally held  that  the  purchaser  of  stolen  chattels,  no  matter  how  inno- 


CHAP.   XVI.]  LIABILITY    FOR   MISFEASANCE.  581 

cent  or  free  from  negligence  in  the  matter,  acquires  no  title  to  such 
property  as  against  the  owner ;  and  this  rule  has  been  applied  in  this 
court  to  the  case  of  an  innocent  purchaser  of  shares  of  stock.  Barstow 
V.  Savage  Mining  Co.,  64  Cal.  388 ;  49  Am.  Rep.  705 ;  Sherwood  v. 
Meadow  Valley  Mining  Co.,  50  Cal.  412. 

The  precise  question  involved  here  arose  in  the  case  of  Bercich  v. 
Marye,  9  Nev.  312.  In  that  case,  as  here,  the  defendant  was  a  stock- 
broker who  had  made  a  sale  of  stolen  certificates  of  stock  for  a  stran- 
ger, and  paid  him  the  proceeds.  He  was  held  liable,  the  court,  in  the 
course  of  its  opinion,  saying :  "  It  is  next  objected  that  as  the  defend- 
ant was  the  innocent  agent  of  the  person  for  whom  he  received  the 
shares  of  stock,  without  knowledge  of  the  felony,  no  judgment  should 
have  been  rendered  against  him.  It  is  well  settled  that  agency  is 
no  defence  to  an  action  of  trover,  to  which  the  present  action  is 
analogous." 

The  same  conclusion  was  reached  in  Kimball  v.  Billings,  55  Me. 
147,  92  Am.  Dec.  581,  the  property  sold  in  that  case  by  the  agent 
being  stolen  government  bonds,  payable  to  bearer.  The  court  there 
said :  "  'Not  is  it  any  defence  that  the  property  sold  was  government 
bonds  payable  to  bearer.  The  bond  fide  purchaser  of  a  stolen  bond 
payable  to  bearer  might  perhaps  defend  his  title  against  even  the  true 
owner.  But  there  is  no  rule  of  law  that  secures  immunity  to  the 
agent  of  the  thief  in  such  cases,  nor  to  the  agent  of  one  not  a  bond  fide 
holder.  .  .  .  The  rule  of  law  protecting  bond  fide  purchasers  of  lost 
or  stolen  notes  and  bonds  payable  to  bearer  has  never  been  extended 
to  persons  not  bond  fide  purchasers,  nor  to  their  agents." 

Indeed,  we  discover  no  difference  in  principle  between  the  case  at 
bar  and  that  of  Eogers  v.  Huie,  1  Cal.  429,  54  Am.  Dec.  300,  in  which 
case  Bennett,  J.,  speaking  for  the  court,  said :  "  An  auctioneer 
who  receives  and  sells  stolen  property  is  liable  for  the  conversion  to 
the  same  extent  as  any  other  merchant  or  individual.  This  is  so 
both  upon  principle  and  authority.  Upon  principle,  there  is  no  reason 
why  he  should  be  exempted  from  liability.  The  person  to  whom  he 
sells,  and  who  has  paid  the  amount  of  the  purchase  money,  would  be 
compelled  to  deliver  the  property  to  the  true  owner  or  pay  him  its 
full  value ;  and  there  is  no  more  hardship  in  requiring  the  auctioneer 
to  account  for  the  value  of  the  goods,  than  there  would  be  in  com- 
pelling the  right  owner  to  lose  them,  or  the  purchaser  from  the  auc- 
tioneer to  pay  for  them." 

It  is  true  that  this  same  case  afterwards  came  before  the  court, 
and  it  was  held,  in  an  opinion  reported  in  2  Cal.  571,  56  Am.  Dec. 
363,  that  an  auctioneer  who  in  the  regular  course  of  his  business 
receives  and  sells  stolen  goods,  and  pays  over  the  proceeds  to  the 
felon,  without  notice  that  the  goods  were  stolen,  is  not  liable  to  the 
true  owner  as  for  a  conversion.  This  latter  decision,  however,  cannot 
be  sustained  on  principle,  is  opposed  to  the  great  weight  of  authority, 


S82  SWIM  V.   WILSON.  [chap.  XVI. 

and  has  been  practically  overruled  in  the  later  case  of  Cerkel  v. 
Waterman,  63  Cal.  34.  In  that  case  the  defendants,  who  were  com- 
mission merchants,  sold  a  quantity  of  wheat,  supposing  it  to  be  the 
property  of  one  Williams,  and  paid  over  to  him  the  proceeds  of  the 
sale,  before  they  knew  of  the  claim  of  the  plaintiff  in  that  action. 
There  was  no  fraud  or  bad  faith,  but  the  court  held  the  defendants 
there  liable  for  the  conversion  of  the  wheat. 

It  was  the  duty  of  the  defendant  in  this  case  to  know  for  whom 
he  acted,  and,  unless  he  was  willing  to  take  the  chances  of  loss,  he 
ought  to  have  satisfied  himself  that  his  principal  was  able  to  save 
him  harmless  if  in  the  matter  of  his  agency  he  incurred  a  pei> 
sonal  liability  by  the  conversion  of  property  not  belonging  to  such 
principal. 

Judgment  and  order  aflfirmed. 

Gaeoutte,  McFarland,  and  Shaepstein,  JJ,,  concurred. 

Beatty^  C.  J.,  and  Patterson,  J.,  dissented. 

Rehearing  denied. 


OSBOBN^E   V.   MORGAN. 

130  Mass.  102,     1881. 
[Reported  herein  at  p.  816.] 


GEEENBEBG   v.   WHITCOMB   LUMBER   CO. 

90  Wis.  225.     1895. 
[Reported  herein  at  p.  819.] 


VAN   ANTWERP   v.   LINTON. 

89  Hun   (N.  Y.)   417.     1895. 
[Reported  herein  at  p.  821.] 


CHAP.   XVII.]  INDEPENDENT  CONTRACTORS.  583 

BOOK   11. 

MASTEK   AND   SEEVANT. 

PART  I. 

WHO    IS   A   SERVANT? 

CHAPTER    XVII. 
Independent  Conteactoes. 

ATLANTIC    TRANSPORT    CO.   v.    CONEYS. 

82  Fed.  (C.  C.  A.,  2d  Ct.)   177.     1897. 

In  Error  to  the  Circuit  Court  of  the  United  States  for  the  Southern 
District  of  New  York. 

This  writ  of  error  was  brought  to  reverse  a  judgment  for  $2,034.85 
rendered  upon  a  verdict  of  the  jury  in  favor  of  Michael  Coneys,  the 
plaintiff  below,  in  an  action  to  recover  damages  for  personal  injuries 
caused  by  the  negligence  of  persons  alleged  to  be  the  servants  of  the 
defendant,  a  steamship  company  having  a  line  of  steamers  running 
to  and  from  New  York,  and  engaged  in  the  transportation  from  New 
York  to  London  of  cattle,  horses,  grain,  and  general  merchandise. 
The  plaintiff  was  an  employee  of  an  elevator  company,  and  at  the  time 
of  the  accident  was  at  work  upon  a  canal  boat  alongside  of  the  de- 
fendant's steamer  Mississippi,  and  between  it  and  a  grain  elevator 
from  which  the  steamer  was  loading.  He  was  injured  by  the  fall 
upon  him  of  a  wooden  shutter  which  was  used  for  closing  a  gangway 
at  the  side  of  the  top  deck  of  the  steamer,  and  was  a  part  of  the 
fittings  of  the  vessel  for  the  carriage  of  cattle,  and  which  was  being 
handled  by  carpenters  in  the  emplo}Tnent  of  H.  P.  Kirkham  & 
Son,  a  firm  of  carpenters,  who  were  repairing  the  cattle  stalls.  The 
accident  happened  through  the  negligence  of  the  carpenters.  The 
defendant  relied  upon  the  position  that  the  workmen  were  in  the 
employment  of  independent  contractors,  and  were  not  its  servants, 
and,  in  various  forms,  requested  the  trial  court  to  thus  instruct 
the  jury.  The  court  charged  the  jury  that  the  evidence  showed  they 
were  not  the  servants  of  an  independent  contractor,  but  that  they 
were  doing  the  ship's  work  at  the  request  of,  and  under  the  direc- 
tion of,  the  ship's  officers.  To  this  charge  the  defendant  excepted, 
and  the  assignments  of  error  relate  to  this  exception,  and  to  the 
various  refusals  of  the  trial  judge  to  direct  otherwise.     The  facta 


584  ATLANTIC   TRANSPORT  CO.   V.   CONEYS.        [CHAP.   XVII. 

in  regard  to  the  course  of  business  of  the  defendant  with  the  firm 
of  H.  P.  Kirkham  &  Son  are  given  in  the  opinion. 

Before  Peckham,  Circuit  Justice,  and  Wallace  and  Shipman, 
Circuit  Judges. 

Shipman,  Circuit  Judge  (after  stating  the  facts  as  above).  The 
fact  of  a  distinction  between  the  liability  of  an  employer  for  an  in- 
jury caused  by  the  negligence  of  his  employee  or  his  servant,  and  the 
liability  of  an  owner  for  an  injury  caused  by  the  negligence  of  an 
independent  contractor  who  undertakes  to  execute  specified  work 
upon  the  owner's  property,  was  formerly  not  well  recognized  (Bush 
V.  Steinman,  1  Bos.  &  P.  404),  but  is  now  distinctly  understood 
(Hilliard  v.  Eichardson,  3  Gray,  349).  If  any  confusion  now  exists, 
it  is  in  regard  to  the  controlling  tests  that  determine  the  character 
of  the  particular  contract  which  is  under  examination.  The  two 
kinds  of  employment  are  frequently  close  to  each  other,  and,  while 
it  is  often  not  difiBcult  to  appreciate  and  understand  the  difference 
between  the  two  classes  of  contracts,  it  is  sometimes  difficult  to  ex- 
press the  distinctions  with  exactness  of  language.  The  cases  of 
Casement  v.  Brown,  148  U.  S.  615,  and  Railroad  Co.  v.  Hanning, 
15  Wall.  649,  illustrate  that,  while  two  contracts  may  apparently 
be  similar  in  phraseology,  yet  their  nature  and  subject-matter  may 
place  the  respective  contracting  parties  in  different  relations  to  each 
other.  The  tendency  of  modern  decisions  is  not  to  regard  as  essen- 
tial or  controlling  the  mere  incidentals  of  the  contract,  such  as  the 
mode  and  manner  of  payment  (Corbin  v.  American  Mills,  27  Conn. 
274),  or  whether  the  owner  can  discharge  the  subordinate  workmen, 
and  not  to  regard  as  essential,  or  an  absolute  test,  so  much  what  the 
owner  actually  did  when  the  work  was  being  done,  as  what  he  had 
a  right  to  do.  Many  circumstances  may  combine,  as  in  Butler  v. 
Townsend,  126  N.  Y.  105,  which  show  that  the  relation  of  an  inde- 
pendent contractor  exists,  but  the  significant  test,  which  courts  re- 
gard as  of  an  absolute  character,  has  been  variously  expressed  by 
them  as  follows :  "  The  test,  I  think,  always  is,  had  the  superior 
control  or  power  over  the  acting  or  mode  of  acting  of  the  subordi- 
nates ?  .  .  .  Was  there  a  control  or  direction  of  the  person,  in  opposi- 
tion to  a  mere  right  to  object  to  the  quality  or  the  description  of  the 
work  done?  .  .  .  On  the  other  hand,  if  an  employer  has  no  such 
personal  control,  but  has  merely  the  right  to  reject  work  that  is  ill 
done,  or  to  stop  work  that  is  not  being  rightly  done,  but  has  no 
power  over  the  person  or  time  of  the  workman  or  artisan  employed, 
then  he  will  not  be  their  superior,  in  the  sense  of  the  maxim,  and 
not  answerable  for  their  fault  or  negligence."  Lord  Gifford  in 
Stephen  v.  Commissioners,  3  Sess.  Cas.  (4th  Series  Scot.)  535, 
642. 

In  Linnehan  v.  Rollins,  137  Mass.  123,  125,  the  instruction  of 
the  trial  judge,  which  was  adopted  by  the  appellate  court,  was: 


CHAP.   XVII.]  INDEPENDENT   CONTRACTORS.  585 

"  The  absolute  test  is  not  the  exercise  of  the  power  of  control,  but 
the  right  to  exercise  power  of  control." 

In  Hexamer  v.  Webb,  101  N.  Y.  377,  the  court  said :  "  The  test 
to  determine  whether  one  who  renders  service  to  another  does  so  as 
a  contractor  or  not  is  to  ascertain  whether  he  renders  the  service  in  the 
course  of  an  independent  occupation,  representing  the  will  of  his 
employer  only  as  to  the  result  of  his  work,  and  not  as  to  the  means 
by  which  it  is  accomplished." 

In  Casement  v.  Brown,  supra,  the  court,  by  Mr.  Justice  Brewer, 
said:  "The  will  of  the  companies  [the  owners]  was  represented 
only  in  the  result  of  the  work,  and  not  in  the  means  by  which  it  was 
accomplished.  This  gave  to  the  defendants  the  status  of  independent 
contractors,  and  that  status  was  not  affected  by  the  fact  that,  instead 
of  waiting  until  the  close  of  the  work  for  acceptance  by  the  engi- 
neers of  the  companies,  the  contract  provided  for  their  daily  super- 
vision and  approval  of  both  material  and  work." 

Whereas,  in  Railroad  Co.  v.  Manning,  supra,  the  court  found  that 
the  essence  of  the  contract  to  rebuild  an  old  wharf,  and  "  make  it  as 
good  as  new,"  was  a  reservation  of  the  power,  "not  only  to  direct 
what  shall  be  done,  but  how  it  shall  be  done." 

In  the  case  now  under  consideration  the  contract  was  not  in  writ- 
ing, but  was  manifested  by  the  course  of  business  between  the  parties, 
and  the  witnesses  are  not  at  variance  as  to  its  terms.  There  was  no 
question  before  the  jury  as  to  the  evidence,  but  the  plaintiff  in  error 
insists  that  it  was  entitled  to  a  ruling  that  the  legal  conclusions 
from  the  evidence  must  be  that  the  firm  of  carpenters  stood  in  the 
position  of  independent  contractors,  or  at  least  that  the  question  of 
the  character  of  the  contract  was  one  for  the  jury.  The  members 
of  the  court  concur  in  the  opinion  that  the  facte  did  not  entitle 
the  plaintiff  to  the  absolute  ruling  which  was  asked  for,  and  the 
majority  are  of  opinion  that  the  only  just  inferences  from  the  tes- 
timony are  that  the  relation  between  the  shipowners  and  the  car- 
penter was  that  of  master  and  servant.  The  dissenting  judge  thinks 
that  the  inferences  might  be  twofold,  and  that  the  question  should 
have  been  submitted  to  the  jury. 

The  steamship  company  had  for  four  years  before  the  accident 
been  operating  a  line  of  steamers  carrying  horses,  cattle,  and  gen- 
eral cargo  from  New  York.  Whenever  a  steamer  arrived  in  port, 
its  fittings  for  cattle  and  other  equipments  for  the  carriage  of  freight 
required  repairs,  which  were  uniformly  made  by  Kirkham  &  Son, 
who  charged  for  work  by  the  hour,  and  for  material  by  the  foot. 
The  dock  superintendent  of  the  steamship  company,  in  reply  to  the 
question,  "  Describe  to  us  how  the  work  is  done ;  who  gives  the 
directions  ?  "  said :  "  There  are  hardly  any  directions  to  be  given. 
Mr.  Kirkham  has  a  foreman  there,  and  he  goes  to  work,  —  being 
used  to  this  work,  he  knows  just  what  is  to  be  done ;  and  he  goes  ahead 
and  does  this  work  regularly  each  week,  excepting  possibly  when  we 


586  ATLANTIC   TRANSPORT   CO.    V.   CONEYS.        [CHAP.    XVII. 

have  horses.    When  we  have  horses,  then  I  counsel  him  how  many 
horses." 

In  reply  to  the  question,  "What  kind  of  work  do  they  do  on  the 
ship,  and  how  long  are  they  there  generally  each  trip  ? "  he  said : 
*'  Some  of  them  are  there  most  all  the  time  while  the  ship  is  in  port. 
There  is  so  many  things  to  be  done — fitting  up  the  boat  for  grain,  and 
tinkering  around,  one  thing  and  another ;  fixing  up  the  cattle  fittings ; 
fixing  up  for  the  horses  —  that  it  tajces  a  larger  or  smaller  gang,  ac- 
cording to  the  amount  of  work,  most  of  the  time  the  ship  is  in  port." 

The  carpenters'  foreman  testified  that  he  goes  over  every  vessel  of 
the  steamship  company  as  it  arrives,  and  reports  the  result  of  his 
inspection  to  the  superintendent,  who  tells  him  to  go  ahead  with  the 
work;  that  when  the  Mississippi  came  in,  the  superintendent  being 
absent,  the  assistant  gave  orders  to  go  ahead  and  see  to  the  repair- 
ing the  same  as  usual;  that  in  practice  the  witness  got  instructions 
from  the  captains  once  in  a  while,  "  in  the  nature  of  alterations,  or 
any  thing  that  way";  and  that  it  was  a  part  of  his  general  duty 
to  do  any  repairing  that  he  sees  is  needed,  and  asked  for  by  the 
captain  or  by  the  dock  superintendent.  Kirkham  &  Son  are  the 
jobbing  carpenters  customarily  employed  by  this  steamship  line. 
Their  experience  has  been  such  that  their  ascertainment  of  the 
necessary  amount  of  repairs  is  relied  upon.  They  are  told  to  do  the 
work,  and,  as  a  rule,  need  no  other  directions.  But  both  the  captains 
and  the  superintendent  have  the  right  to  direct  the  extent  and  the 
manner  of  the  alterations  and  repairs.  It  is  a  right  not  often  exer- 
cised, for  the  carpenters  apparently  had  the  confidence  of  the  super- 
intendent, but  the  right  existed.  But  it  may  be  said  that,  while  it 
is  true  that  the  officers  of  the  defendant  had  some  general  power  to 
direct  how  alterations  and  repairs  should  be  made,  they  had  no 
particular  power  "to  direct  and  control  the  manner  of  performing 
the  very  work  in  which  the  carelessness  occurred,"  and  that  the 
existence  or  nonexistence  of  such  kind  of  power  is  the  real  ques- 
tion in  the  case,  which  is  true.  Charlock  v.  Freel,  125  N.  Y.  357; 
Vogel  V.  Mayor,  92  N.  Y.  18.  The  subject-matter  to  which  the 
course  of  business  related  —  that  of  a  series  of  minor  jobbing  repairs 
—  tells  with  a  good  deal  of  clearness  what  the  rights  of  the  respective 
parties  were.  The  contract  of  the  superintendent  was  not  analogous 
to  that  of  a  householder's  occasional  contract  with  a  tinman  to  tin  a 
roof,  or  with  a  painter  to  paint  a  house.  It  was  analogous  to  that 
of  the  owner  of  a  house  who  customarily  calls  in  the  jobbing  car- 
penter whom  he  is  in  the  habit  of  employing,  and  starts  him  in  the 
work  of  "  tinkering  around,  one  thing  after  another,"  and  doing 
the  various  jobs  of  repairs  which  time  has  shown  to  be  necessary. 
The  manner  in  which  the  work  shall  be,  done,  and  the  dangers  to  be 
avoided,  as  well  as  the  extent  to  which  the  work  shall  be  carried  on, 
are  under  the  control  and  guidance  of  the  owner.  In  this  case 
separate  bills  were  made  out  for  the  separate  kinds  of  work  upon 


CHAP.   5VII.]  INDEPENDENT   CONTRACTORS.  587 

each  vessel,  and  for  the  materials  furnished  for  each  job ;  and,  while 
the  mode  of  payment  is  not  essential,  it  was  not  in  harmony  with  the 
usual  incidents  of  the  contract  of  an  independent  contractor.  Inas- 
much as,  in  our  opinion,  the  only  inference  that  can  fairly  be  drawn 
from  the  testimony  is  that  the  steamship  company  and  the  carpen- 
ters were  in  the  usual  relation  of  master  and  servant,  the  judgment 
of  the  circuit  court  is  ajffirmed. 

Wallace,  Circuit  Judge  (dissenting).  I  think  that  the  evidence 
upon  the  trial  presented  a  question  of  fact  for  the  determination  of 
the  jury,  —  whether  Kirkham  &  Son  were  contractors,  exercising 
an  independent  calling,  and  delegated  with  the  responsibility  of  de- 
ciding how  the  carpenter  work  which  they  were  to  do  for  the  defen- 
dant should  be  done,  subject  to  the  right  of  the  defendant  to  object 
to  the  quality  of  the  work,  or  whether  the  relation  between  their 
subordinates  and  the  defendant  was  that  of  master  and  servant. 
Unless  the  defendant,  pursuant  to  the  understanding  or  course  of 
business  between  it  and  Kirkham  &  Son,  had  the  right  to  direct  and 
control  the  manner  of  performing  the  very  work  in  which  the  care- 
lessness occurred  by  which  the  plaintiff  was  injured,  the  employees 
of  Kirkham  &  Son  were  not  its  servants.  In  my  opinion,  the  trial 
judge  erred  in  taking  this  question  from  the  jury,  and  deciding  as 
matter  of  law  that  these  employees  were  the  servants  of  the  defen- 
dant.   I  therefore  dissent  from  the  opinion  of  the  court. 


LINNEHAN   V.   ROLLINS. 

137  Mass.  123.     1884. 

Elston  had  a  contract  with  defendants  to  take  down  the  tatter's 
building  "  all  said  work  to  be  done  carefully,  and  under  the  direction 
and  subject  to  the  approval  of  the  trustees."  There  was  also  evi- 
dence that  one  or  more  of  the  defendants  were  present  nearly  every 
day,  and  gave  directions  as  to  the  work  being  performed;  and 
evidence  contradicting  this.  Plaintiff  was  injured  by  the  negligence 
of  a  workman  employed  by  Elston. 

The  judge  instructed  the  jury  upon  the  effect  of  said  contract 
as  follows :  "  So  far  as  Elston  is  concerned,  the  relation  in  which 
he  stood  to  the  defendants  at  the  outset  is  a  matter  of  written  con- 
tract, and,  where  there  is  a  written  contract  between  parties,  the 
construction  of  that  written  contract  is  a  matter  of  law.  This  con- 
tract implies  in  substance  that  Elston  is  to  take  down  the  entire 
building  known  as  the  Adams  House,  or  so  much  thereof  as  the 
trustees  may  request;  and,  in  conclusion,  that  all  of  the  work  is  to 
be  done  carefully,  and  under  the  direction  and  subject  to  the  approval 
of  the  trustees.    This  contract  gives  the  defendants  the  right  to  con- 


588  LINNEHAN   V.   ROLLINS,  [CHAP.   XVII. 

trol  and  direct  tlie  action  of  Elston.  It  is  not  simply  a  provision  that 
the  work  must  finally  meet  their  approval  before  they  pay  him,  but 
it  is  a  provision  that,  in  the  first  instance,  he  is  to  take  down  just  so 
much  of  it  as  they  may  desire,  and  that  he  is  to  do  the  work  of  taking 
down  under  their  direction.  There  is  no  other  mode  of  construing  it 
than  so  as  to  mean  that  he,  by  this  contract,  was  subject  to  their  orders 
as  to  the  time  and  manner  and  mode  of  doing  the  work;  that  they 
liad  the  right  to  step  in  and  say  to  him,  *  You  are  not  doing  this  as  we 
directed  you  to  do  it.  We  direct  you  to  do  thus  and  so,  and  we 
direct  you  to  do  this  in  the  other  way.'  That  seems  to  me,  as  far  as 
the  contract  is  concerned,  to  bring  the  case  within  the  relation  of 
master  and  servant,  so  far  as  Elston  and  the  defendants  are  con- 
cerned.^ You  will  observe  that,  although  there  has  been  evidence  in- 
troduced upon  the  one  side  and  the  other,  as  to  the  actual  control 
which  the  trustees,  through  one  of  their  number,  exercised  over  the 
work,  and  that  is  all  proper  and  competent  evidence  for  you  in  con- 
sidering the  matter,  yet  that  the  absolute  test  is  not  the  exercise  of 
power  of  control,  but  the  right  to  exercise  power  of  control.  If,  for 
instance,  there  was  nothing  in  the  case  but  this  contract,  and  there 
were  no  question  that  the  parties  were  acting  under  it,  if  that  is 
the  view  you  take  of  it,  and  that  the  injury  was  occasioned  by  the 
negligence  of  Elston,  then,  although  the  trustees  should  be  across 
the  Atlantic,  nevertheless,  under  the  instructions  I  give  you,  if  they 
retained  the  power  to  control  and  direct  the  work,  they  would  be 
liable;  because  it  is  the  possession  of  the  right  of  interference,  the 
right  of  control,  that  puts  upon  a  party  the  duty  of  seeing  that  the 
person  who  stands  in  that  relation  does  his  duty  properly.  If  they 
have  retained  to  themselves  the  right  of  directing  the  mode  of  doing 
the  work,  then,  if  the  work  is  done  wrong,  the  simple  principle  is 
that  they  are  responsible." 

The  jury  returned  a  verdict  for  the  plaintiff,  in  the  sum  of  $5500 ; 
and  the  defendants  alleged  exceptions. 

Field,  J.  Whether  an  owner  of  a  building  retains  such  control 
over  work  to  be  done  and  the  manner  of  doing  it  as  to  render  himself 
responsible  for  injuries  occasioned  by  the  negligence  of  a  contractor 
and  his  employees  in  the  performance  of  the  work,  depends  upon 
the  construction  to  be  given  to  the  contract.  Erie  v.  Caulkins,  85 
Penn.  St.  247 ;  Eailroad  v.  Hanning,  15  Wall.  649 ;  Eaton  v.  Euro- 
pean &  North  American  Eailway,  59  Maine,  520;  Cincinnati  v. 
Stone,  5  Ohio  St.  38;  Newton  v.  Ellis,  5  El.  &  Bl.  115;  Blake  v. 
Thirst,  3  H.  &  C.  20. 

*  "  If  the  contract,  for  example,  Is  to  build  a  wall,  and  the  builder  '  has  a  right 
to  say  to  the  employer,  "  I  will  agree  to  do  it,  but  I  shall  do  it  after  my  own 
fashion ;  I  shall  begin  the  wall  at  this  end  and  not  at  the  other "  ;  there  the 
relation  of  master  and  servant  does  not  exist,  and  the  employer  is  not  liable.' 
(Bramwell,  L.  J.,  Emp.  L.  1877,  p.  53:  an  extra-judicial  statement,  but  made  on 
an  occasion  of  importance  by  a  great  master  of  the  common  law.)"  Pollock  on 
Torts,  6th  ed.,  p.  78. 


CHAP.   XVII.]  INDEPENDENT   CONTRACTORS.  589 

In  this  case,  for  the  reasons  given  in  the  instructions,  we  think 
the  defendants  are  liable  for  injuries  occasioned  by  the  negligence  of 
Elston  and  his  employees  in  doing  the  work  which  the  defendants 
requested  Elston  to  do.  Kailroad  v.  Harming,  ubi  supra;  Clapp  v. 
Kemp,  122  Mass.  481;  Brackett  v.  Lubke,  4  Allen,  138;  Brooks  v. 
Somerville,  106  Mass.  271 ;  Forsyth  v.  Hooper,  11  Allen,  419 ;  Kim- 
ball V.  Cushman,  103  Mass.  194.  Exceptions  overruled.^ 


KELLY  V.    THE  MAYOR,  etc.,  of  NEW  YORK. 

11   N.  Y.  432.     1854. 

The  action  was  brought  by  Kelly  in  the  New  York  common  pleas 
against  the  mayor,  aldermen  and  commmonalty  of  the  city  of  New 
York,  to  recover  for  an  injury  to  his  horse,  alleged  to  have  been 
caused  by  the  negligence  of  the  defendants  or  their  servants  in  blast- 
ing rock,  in  the  opening  and  excavating  of  Seventy-first  street,  in 
the  city  of  New  York.  The  defendants  had  contracted  with  one 
Quin  for  the  doing  of  this  work.  On  the  trial  it  was  proved  that 
all  the  blasting  was  done  by  and  under  the  immediate  charge  of  one 
Ford,  who  was  employed  by  Quin,  the  contractor,  and  that  Ford  set 
off  the  blast  that  caused  the  injury.  The  plaintiff  claimed  that  the 
clause  in  the  contract  with  Quin,  quoted  in  the  opinion,  made  Quin 
the  servant  of  the  defendants. 

Judgment  for  plaintiff.     Defendants  appeal. 

Selden^  J.,  delivered  the  opinion  of  the  court. 

The  written  agreement  between  the  defendants  and  John  Quin, 
the  immediate  employer  of  the  persons  through  whose  carelessness 

*  "  When  a  contractor  takes  entire  control  of  the  work,  the  employer  not  In- 
terfering, the  employer  —  supposing  there  was  no  negligence  in  the  selection  of 
the  contractor,  and  that  the  work  contracted  for  was  lawful  —  is  not  liable  to 
third  persons  for  injuries  to  such  parties  by  the  contractor's  negligence,  or  the 
negligence  of  his  subordinates.  But  any  interference,  assumption  of  control  or 
directions  given  by  the  owner  of  buildings,  being  erected  for  him  by  contractors, 
under  a  special  agreement,  may  render  him  personally  liable  for  injuries  caused 
to  third  persons  by  the  negligent  conduct  of  such  contractors,  in  work  done  in 
obedience  to  such  directions.  (Heffernan  v.  Benkard,  1  Robt.  432.)  In  other 
words,  the  employer  may  make  himself  liable  by  interfering  with  the  contractor 
and  assuming  control  of  the  work,  or  some  part  of  it,  so  that  the  relation  of  master 
and  servant  arises,  or  so  that  an  injury  ensues  which  is  traceable  to  his  interfer- 
ence. But  the  mere  fact  that  the  employer  retains  a  general  supervision  over  the 
work  for  the  purpose  of  satisfying  himself  that  the  contractor  carries  out  the  stipu- 
lations of  his  contract,  does  not  make  him  responsible  for  the  negligence  of  the 
contractor.     (2  Thomp.  Neg.  913.) 

"  If  the  Injury  occurred  in  consequence  of  the  negligent  or  unskilful  performance 
of  the  work,  the  employer  is  not  liable,  provided  he  did  not  Interfere  with,  and 
assume  control  of,  and  actually  control,  the  work  and  the  method  and  means  of  its 
performance.  It  is  true  that  it  is  not  the  fact  of  actual  interference  and  control, 
but  the  right  to  Interfere,  which  makes  the  difference  between  an  Independent  con- 
tractor and  a  servant  or  agent.  But  when,  as  in  this  case,  the  relation  is  the  former, 
it  is  then  correct  to  say  that  the  liability  of  the  employer,  in  such  cases,  arises  from 
the  fact  of  actual  interference  and  control."  (Norwalk  Gaslight  Co.  v.  Norwalk,  63 
Conn.  495,  525.)"     Hawke  v.  Brown,  28  N.  Y.  App.  Div.  37,  43. 


690  KELLY   V.   THE   MAYOR,   ETC.,   OF   NEW   YORK.      [CHAP.   XVII, 

the  injury  to  the  plaintiff  was  occasioned,  contained  the  following 
clause :  "  The  whole  work  to  be  done  under  the  direction,  and  to 
the  entire  satisfaction  of  the  commissioner  of  repairs  and  supplies, 
the  superintendent  of  roads,  and  the  surveyor  having  charge  of  the 
work:  and  the  certificate  of  the  superintendent  of  roads  and  the 
surveyor,  to  that  effect,  will  be  a  condition  precedent  to  the  accep- 
tance of  the  work  and  payment  for  the  same."  It  is  claimed  that 
this  clause  distinguishes  this  case  in  principle  from  those  of  Blake 
V.  Ferris,  1  Seldon,  48,  and  Pack  v.  The  Mayor,  etc.,  of  New  York, 
4  Selden's  Rep.  222. 

In  the  last  of  these  cases  the  contract  contained  a  clause  by  which 
the  contractor  engaged  to  conform  the  work  to  such  further  directions 
as  might  be  given  by  the  corporation  or  its  oflBcers.  It  was  claimed 
that  this  clause  distinguished  the  case  from  that  of  Blake  v.  Ferris, 
svpra.  But  the  court  held,  that  the  effect  of  this  clause  was  to  give 
to  the  corporation  power  to  direct  as  to  the  results  of  the  work 
merely ;  that  is,  its  condition,  when  completed ;  that  it  gave  them  no 
control  over  the  contractor  or  his  workmen,  as  to  the  manner  of  per- 
forming it,  and  had  no  tendency  therefore  to  create  the  relation  of 
master  and  servant,  or  of  principal  and  agent,  between  the  corpora- 
tion or  its  officers,  and  the  contractor  or  the  workmen  employed  by 
him.^  In  the  case  at  bar  the  language  is  somewhat  broader  and  more 
comprehensive.  "  The  whole  work  "  is  to  be  done  "  under  the  direc- 
tion and  to  the  entire  satisfaction,"  etc.  Still  I  think  the  reasoning 
of  the  court  in  the  case  of  Pack  v.  The  Mayor,  etc.,  applies  equally 
to  this.  The  clause  in  question  clearly  gave  to  the  corporation  no 
power  to  control  the  contractor  in  the  choice  of  his  servants.  That 
he  might  make  his  own  selection  of  workmen  will  not  be  denied. 
This  right  of  selection  lies  at  the  foundation  of  the  responsibility  of 
a  master  or  principal,  for  the  acts  of  his  servant  or  agent.  In  the 
case  of  Pack  v.  The  Mayor,  etc.,  supra,  Jewett,  J.,  says :  "  The  party 
employing  has  the  selection  of  the  party  employed,  and  it  is  reasonable 
that  he  who  has  made  choice  of  an  unskilful  or  careless  person  to 
execute  his  orders,  should  be  responsible  for  an  injury  resulting  from 
the  want  of  skill,  or  want  of  care,  of  the  person  employed."  As  a 
general  rule,  certainly,  no  one  can  be  held  responsible  as  principal, 
who  has  not  the  right  to  choose  the  agent  from  whose  act  the  injury 

'  "  It  (the  clause  referred  to)  does  not,  as  the  court  below  held,  make  Riley  the 
immediate  servant  of  the  defendants  or  give  to  them  any  control  over  him  as  to  the 
manner  or  otherwise  in  which  he  should  conduct  the  blasting.  The  defendants  may 
change  the  grade  by  new  specifications  from  that  provided  in  the  contract,  and  the 
duty  is  then  imposed  upon  Foster  to  make  his  grade  accordingly ;  but  as  to  the 
manner  in  which  he  shall  proceed  In  his  blasting  to  make  the  grade,  or  do  the  work, 
he  is  as  perfectly  independent  of  the  defendants  as  a  man  ever  was  while  engaged  In 
doing  his  own  work.  They  could  not  control  Green  in  any  respect,  if  he  should  pro- 
ceed in  a  negligent  manner  to  conduct  this  blasting.  They  could  neither  dismiss  him 
nor  control  him  in  his  work.  The  court  below  erred  in  giving  such  effect  to  this 
provision  of  the  contract,  and  their  Judgment  should  be  reversed  and  a  new  trial 
granted."    Pack  v.  The  Mayor,  etc.,  8  N.  Y.  222,  227. 


CHAP.   XVII.]  INDEPENDENT   CONTRACTORS.  591 

flows.  There  may  be  exceptions,  as  in  the  case  of  Bailey  v.  The 
Mayor,  etc.,  of  New  York,  3  Hill,  531.  The  principle  of  that  case, 
however,  has  no  application  to  this.  But  the  corporation,  in  addi- 
tion to  its  want  of  power  to  protect  itself  by  the  employment  of 
suitable  workmen,  had  no  power  to  direct  in  this  case,  any  more 
than  in  that  of  Pack  v.  The  Mayor,  etc.,  as  to  the  particular  manner 
of  performing  the  work.  The  object  of  the  clause  relied  upon,  was 
not  to  give  to  the  commissioner  of  repairs,  and  the  other  ofl&cer 
named,  the  right  to  interfere  with  the  workmen,  and  direct  them  in 
detail  how  they  should  proceed,  but  to  enable  them  to  see  that  every 
portion  of  the  work  was  satisfactorily  completed.  It  authorized 
them  to  prescribe  what  was  to  be  done,  but  not  how  it  was  to  be  done, 
nor  who  should  do  it.  This  case,  therefore,  cannot  be  distinguished 
in  principle  from  those  already  decided  by  this  court;  and  it  would 
be  a  work  of  mere  supererogation  to  repeat  the  reasoning  in  those 
cases. 

The  judgment  of  the  common  pleas  must  be  reversed  and  a  new 
trial  ordered,  with  costs  to  abide  the  event. 

Judgment  accordingly.^ 


BUTTON   V.   AMESBURY   NAT.    BANK. 

181  Mass.  154.     1902. 

Lathrop,  J.  This  is  an  action  of  tort  for  injuries  sustained  by  the 
plaintiff  in  consequence  of  the  negligence  of  persons  alleged  to  be  the 
servants  of  the  defendant.  In  the  superior  court  the  case  was  sent 
to  an  auditor,  who  found  certain  facts,  and  further  found  for  the 
plaintiff  in  the  sum  of  $123.75.  The  case  was  then  heard  by  a 
judge  of  the  superior  court  upon  the  report  of  the  auditor,  whose 
findings  were  agreed  to  be  true,  and  a  finding  was  made  for  the 
plaintiff  in  the  same  amount.     The  case  comes  before  us  on  the 

'  "  The  claim  made  by  the  defendant  the  Builders'  Exchange,  the  owner  of  the 
building,  that  Neff  and  the  Baileys  were  independent  contractors,  seems  to  us  well 
founded.  It  is  true  that  in  their  contracts  it  is  provided  that  the  work  is  to  be  per- 
formed under  the  direction  and  to  the  satisfaction  of  the  architects,  actina:  as 
agents  of  the  owner,  but  it  is  entirely  certain  from  the  whole  contract  that  this  Is 
simply  a  reservation  of  the  right  of  inspection.  It  is  not  a  reservation  of  power  to 
control  the  manner  of  the  work,  to  change  materials  to  be  used,  or  prescribe  ways 
and  methods  in  which  the  work  is  to  be  carried  out.  The  contractors  have  agreed  to 
build  the  building  according  to  fixed  plans  and  specifications,  and  of  certain  mate- 
rials. They  can  do  the  work  in  their  own  manner  and  with  their  own  machinery, 
providing  they  comply  with  their  contract.  The  architect  can  only  require  that  the 
building  be  such  as  the  contract  demands.  He  has  no  control  for  any  other  purpose. 
We  do  not  regard  this  reservation  of  the  right  of  inspection  of  the  work  as  changing 
the  character  of  the  contract.  Hughbanks  v.  Investment  Co.  (Iowa)  60  N.  W.  640." 
Smith  V.  Milwaukee  Builders',  etc.,  Exchange,  91  Wis.  360. 

For  other  cases  construing  similar  provisions  in  contractors'  contracts,  see  Nor- 
walk  Gaslight  Co.  v.  Borough  of  Norwalk,  63  Conn.  495,  particularly  at  p.  524  ; 
Harding  v.  Boston,  163  Mass.  14  ;  Uppington  v.  City  of  New  York,  165  N.  Y.  222; 
City  of  Erie  v.  Caulkins,  85  Pa.  St.  247. 


592  DUTTON   V.   AMESBURY   NAT.   BANK.  [CHAP.   XVII. 

defendant's  exceptions  to  the  refusal  of  the  judge  to  give  two  rulings 
requested.  Before  stating  them,  it  will  be  necessary  to  set  forth  the 
facts  found  by  the  auditor,  which  are,  in  substance,  these : 

The  plaintiff  was  the  occupant  of  a  store  on  the  westerly  side  of 
Main  street,  in  Amesbury,  separated  from  the  defendant's  building 
by  a  passageway  about  six  feet  wide.  The  division  line  between 
the  two  estates  ran  through  the  centre  of  the  passageway.  In  March, 
1890,  the  defendant  found  that  water  was  coming  into  its  cellar 
through  the  wall  next  to  the  passageway;  and  the  cashier  of  the 
defendant  went  to  the  place  of  business  of  one  Sawyer,  to  get  him  to 
repair  the  cellar  wall  and  stop  the  water  from  running  into  the  cel- 
lar. Sawyer  was  not  in,  but  the  cashier  found  one  Grenier,  who  was 
in  Sawyer's  employ,  and  who  had  charge  of  the  business  in  the  ab- 
sence of  Sawyer,  and  requested  him  to  go  to  the  place  and  stop  the 
water  from  running  into  the  cellar.  Grenier  went  to  the  building, 
employed  help,  and  dug  up  the  earth  in  the  passageway  in  order  to 
reach  the  leak  in  the  defendant's  wall.  The  earth  dug  up  was  thrown 
in  a  pile  across  the  passageway  from  the  plaintiff's  store  to  the 
defendant's  building.  The  pile  remained  there  about  a  week,  when 
there  came  a  snowstorm,  followed  by  rain.  The  water  ran  down 
the  passageway  until  it  was  stopped  by  the  pile  of  dirt,  when  it  ran 
into  a  window  of  the  plaintiff's  store,  —  the  sill  being  at  about  the 
level  of  the  surface  of  the  passageway,  —  and  did  the  injury  com- 
plained of. 

The  plaintiff  knew  that  the  pile  of  earth  was  across  the  passageway 
for  a  week  before  the  water  ran  into  the  store.  As  soon  as  the  plain- 
tiff found  that  the  water  was  running  into  the  store,  he  dug  away  the 
pile  of  earth,  and  stopped  the  water  from  coming  in.  The  auditor 
found  that  the  plaintiff  was  not  guilty  of  negligence  in  not  removing 
the  pile  of  earth  before  the  storm. 

In  answer  to  the  contention  of  the  defendant  that  Sawyer  was  a 
contractor,  the  auditor  reported  as  follows :  "  I  do  not  find  that 
said  Sawj^er  made  any  contract  with  the  defendant  to  stop  the  water 
from  running  into  its  cellar,  but  I  find  that  said  Sawyer  did  the 
work  under  a  general  employment,  and  was  to  receive  a  reasonable 
compensation  therefor."  In  this  connection,  also,  the  following 
appears  in  the  report :  "  It  did  not  appear  that  the  defendant  gave 
any  directions  about  the  work  done  by  Grenier,  but  left  the  method 
of  doing  the  work  and  stopping  the  leak  to  his  judgment." 

The  requests  asked  for  and  refused  were  as  follows :  "  (1)  On  the 
evidence  as  agreed,  the  relation  of  master  and  servant  did  not  exist 
between  Sawyer  and  the  defendant,  and  the  plaintiff  cannot  recover. 
(2)  The  plaintiff  having  seen  the  earth  piled  upon  his  own  land 
at  least  a  week  before  the  injury  complained  of,  it  was  his  duty  to 
remove  it,  or  to  so  arrange  it  as  to  prevent  its  being  the  cause  of 
further  damage,  and,  not' having  done  so,  did  not  comply  with  the 


CHAP.   XVII.]  INDEPENDENT   CONTRACTORS.  593 

law,  which  requires  every  one  to  use  reasonable  care  to  protect  his 
own  property  against  what  may  cause  injury  to  it,  and  to  prevent 
unnecessary  damage." 

The  principal  question  in  the  case  arises  on  the  first  request  for 
instructions,  and  is,  whether  the  relation  of  master  and  servant 
existed  between  the  defendant  and  Sawyer.  To  establish  the  liability 
of  one  person  for  the  negligence  of  another,  it  is  not  enough  to  show 
that  the  person  whose  negligent  action  caused  the  injury  was  at  the 
time  in  the  employment  of  the  person  sought  to  be  charged,  but  it 
must  also  be  shown  that  the  relation  of  master  and  servant  existed 
between  them.  This  distinction  sometimes  has  been  lost  sight  of. 
Until  the  case  of  Hilliard  v.  Eichardson,  3  Gray,  349,  was  decided, 
our  decisions  were  in  a  somewhat  anomalous  state.  Compare  Sproul 
V.  Hemmingway,  14  Pick.  1,  5,  with  Stone  v.  Codman,  15  Pick. 
297.  In  Hilliard  v.  Eichardson  it  was  held  that  where  the  owner  of 
land  employed  a  carpenter,  for  a  specific  price,  to  repair  a  building 
thereon,  and  to  furnish  all  the  materials  for  the  purpose,  he  was 
not  liable  for  injury  to  a  third  person  caused  by  the  negligence  of 
a  teamster  employed  by  the  carpenter  in  depositing  boards  in  the 
highway  in  front  of  the  house.  See,  also,  Linton  v.  Smith,  8  Gray, 
147;  Conners  v.  Hennessey,  112  Mass.  96;  Boomer  v.  Wilbur,  176 
Mass.  482. 

It  so  happened,  in  Hilliard  v.  Eichardson,  that  the  price  to  be  paid 
was  a  specific  sum,  and  it  is  not  surprising  that  at  first  this  fact  was 
seized  upon  as  the  turning  point  in  determining  whether  the  relation 
was  that  of  master  and  servant,  or  of  contractor  and  contractee.  See 
Brackett  v.  Lubke,  4  Allen,  138;  Forsyth  v.  Hooper,  11  Allen,  419. 
Later  the  method  of  payment  was  held  to  be  not  the  test,  but  whether 
the  person  employed  "  was  in  the  exercise  of  a  distinct  and  indepen- 
dent employment,  using  his  own  means  and  methods  for  accomplish- 
ing his  work,  and  not  being  under  the  immediate  supervision  and  con- 
trol of  his  employer."  Morgan  v.  Sears,  159  Mass.  570,  574.  See, 
also,  Dane  v.  Chemical  Co.,  164  Mass.  453,  456;  Harding  v.  Ciiy 
of  Boston,  163  Mass.  14;  Hexamer  v.  Webb,  101  N.  Y.  377,  385; 
Corbin  v.  American  Mills,  27  Conn.  274;  Murray  v.  Currie,  L.  R. 
6  C.  P.  24. 

In  the  case  at  bar  the  burden  of  proof  was  upon  the  plaintiff  to 
show  that  the  relation  of  master  and  servant  existed  between  the 
defendant  and  Sawyer.  This  was  not  shown.  The  language  of  the 
auditor,  when  he  says,  "  I  do  not  find  that  said  Sawyer  made  any 
contract  with  the  defendant  to  stop  the  water  from  running  into 
its  cellar,"  would  seem  to  mean  "  no  contract  in  writing."  But  this 
is  not  important.  There  was  clearly  a  verbal  contract  either  to  stop 
the  water  from  running  into  the  cellar,  or  to  try  to  stop  it,  —  and  it  is 
immaterial  which,  —  for  which  Sawyer  was  to  have  a  reasonable 
compensation.     In  carrying  out  this  contract,  the  plaintiff  was  in- 

88 


594  DDTTON   V.   AMESBURT   NAT.   BANK.  [CHAP.   XVII. 

jured  by  the  negligence  of  the  servants  of  Sawyer,  who  were  hired 
by  his  representative,  Grenier.  The  defendant  neither  hired  these 
servants,  nor  was  under  any  obligation  to  pay  them.  It  exercised 
no  control  over  them,  nor,  so  far  as  appears,  had  any  right  to  exercise 
such  control.  The  method  and  manner  of  doing  the  work  were 
left  entirely  to  the  skill  and  judgment  of  Sawyer,  who,  on  the  facts 
found,  does  not  appear  not  to  have  been  an  independent  contractor, 
for  the  negligence  of  whose  servants  the  defendant  is  not  shown  to 
have  been  responsible.  The  first  instruction  requested  should  there- 
fore have  been  given,  at  least  in  substance. 

The  second  instruction  requested  was  properly  refused.  The  audi- 
tor did  not  find  that  the  plaintiff  was  guilty  of  negligence  in  not 
removing  the  pile  of  earth  before  the  storm.  We  cannot  say,  as 
matter  of  law,  that  the  plaintiff  was  not  in  the  exercise  of  reason- 
able care. 

Exceptions  sustained. 

Knowlton,  J.  I  do  not  agree  to  the  opinion  of  the  majority  of 
the  court.  I  cannot  make  plain  the  reasons  for  my  dissent  without 
stating  propositions  which  seem  to  me  elementary.  If  the  cashier 
had  directed  the  janitor  of  the  bank  to  dig  up  the  earth  and  stop 
the  opening  in  the  wall,  I  think  no  one  would  doubt  that  the  janitor 
would  have  been  the  servant  of  the  bank  in  doing  the  work.  The 
same  result  would  as  certainly  have  followed  if  the  cashier  had  found 
a  laborer  waiting  for  a  job  at  the  corner  of  a  street,  and  had  employed 
him  to  do  the  work  under  the  same  general  direction.  In  each  case, 
irrespective  of  the  amount  or  mode  of  payment,  the  employee  would 
be  the  servant  of  the  bank  in  such  a  sense  as  to  create  a  liability 
from  the  bank  to  third  persons  for  the  consequences  of  his  negligence. 
This  is  because  the  business  that  would  be  going  on  in  making  the 
repairs  would  be  the  bank's  business,  of  which  it  would  have  a 
perfect  legal  right  of  control.  It  could  at  any  time  suspend  or  con- 
tinue the  work,  and  the  employee  would  be  all  the  time  subject 
to  any  direction  that  it  might  choose  to  give.  He  would  have  no 
right  for  a  moment  to  do  anything  against  the  will  of  the  bank, 
and  in  everything  he  did  he  would  be  the  representative  of  the 
principal  proprietor.  Under  such  circumstances,  the  proprietor  is 
justly  held  accountable  to  third  persons  for  that  which  is  done. 
One  working  in  such  a  way  is,  in  reference  to  persons  affected  by 
his  work,  the  servant  of  the  proprietor. 

If  the  work  is  done  by  an  independent  contractor  under  an  agree- 
ment which  makes  him  accountable  only  for  the  result  to  be  pro- 
duced, and  which  gives  him  a  right  to  determine  how  the  result 
shall  be  accomplished,  and  to  control  the  persons  and  instrumen- 
talities employed  to  accomplish  it,  this  contractor  becomes  the  pro- 
prietor of  the  business  included  in  the  contract ;  and  the  owner  with 
whom  he  contracts  is  not  responsible  for  his  methods,  or  for  those  of 


CHAP.  XVII.]  INDEPENDENT  CONTRACTORS.  595 

his  servants.  But  so  long  as  the  owner  makes  no  contract  that  divests 
him  of  the  proprietorship  of  tlie  business  as  it  goes  on,  and  of  the 
legal  right  to  control  it,  his  rights  and  liabilities  are  not  affected 
by  the  fact  that  he  chooses  to  intrust  the  management  to  a  servant 
who  is  an  expert.  It  often  happens  that  a  servant  is  a  person  of  great 
skill  and  experience  in  the  business  in  which  he  is  engaged,  and 
that  the  master  is  entirely  incompetent  to  do  the  work  with  his 
own  hands,  or  even  to  give  intelligent  directions  about  the  details. 
It  never  was  held  that  the  legal  relations  of  the  parties  are  any 
different  in  cases  where  the  master  tells  the  servant  what  he  wants 
done,  and  leaves  to  him  the  method  of  doing  it,  from  their  relations 
in  those  where  the  master  gives  personal  directions  in  every  detail. 
The  proposition  that  liability  to  third  persons  depends,  not  upon  the 
exercise  of  control  by  the  owner,  but  upon  the  right  to  exercise  it, 
was  elaborately  stated  in  the  charge  to  the  jury  in  Linnehan  v. 
KoUins,  137  Mass.  123,  and  the  instructions  were  approved  by  this 
court.  The  principle  is  familiar  law,  and  has  been  applied  in  many 
cases.  .  .  . 

The  present  seems  to  me  an  ordinary  case  of  one  who  procures 
from  another,  to  do  certain  work,  servants  who  are  supposed  to 
know  how  to  do  it.  It  does  not  appear,  nor  is  it  material,  whether 
the  first  part  of  the  first  instruction  requested  properly  could  have 
been  given,  namely,  that  "  the  relation  of  master  and  servant  did  not 
exist  between  Sawyer  and  the  defendant";  for,  so  far  as  appears. 
Sawyer  did  not  serve  personally  in  the  business,  but  did  the  work 
only  in  the  sense  that  he  furnished  his  servants  to  do  it,  and  was 
to  receive  a  reasonable  compensation  for  their  services.  This  he  did 
through  his  foreman,  who  received  the  order  and  acted  under  it. 
The  defendant  all  the  time  had  the  legal  right  to  control  all  the 
work  in  every  particular.  There  was  no  contract  to  prevent  the  de- 
fendant from  suspending  it  at  any  time,  or  from  making  any  change 
that  it  chose  in  regard  to  it.  The  fact  that  the  defendant  chose  to 
leave  the  method  of  doing  it  to  Sawyer's  foreman  is  immaterial. 

The  case  is  identical  in  its  legal  principles,  and  almost  identical  in 
its  facts,  with  Stone  v.  Codman,  15  Pick.  297,  which  is  discussed  and 
approved  by  Mr.  Justice  Thomas  in  Hilliard  v.  Eichardson,  3  Gray, 
349-351.  In  my  judgment,  it  is  impossible  to  make  a  legal  dis- 
tinction between  the  two  cases.  In  Hilliard  v.  Eichardson  many 
other  cases  are  considered,  and  among  them  Sadler  v.  Henlock,  4 
El.  &  Bl.  570,  which  is  also  very  similar  to  the  case  at  bar. 

I  am  of  opinion  that  the  auditor  and  the  judge  of  the  superior 
court  were  right  in  their  rulings. 


596  LAWRENCE  V.   SHIPMAN.  [CHAP.    XVII. 

LAWRENCE   v.    SHIPMAN. 

39   Conn.   586.     1873. 

The  following  opinion  was  given  by  Hon.  0.  S.  Seymour,  Judge 
of  the  Supreme  Court,  in  two  cases  in  the  Superior  Court  in  Hart- 
ford County,  submitted  to  him  as  an  arbitrator,  under  a  rule  of  court, 
by  William  T.  Lawrence,  plaintiff  in  the  one,  and  Peter  Lux,  plaintiff 
in  the  other,  and  Nathaniel  Shipman  and  Greorge  M.  Bartholomew, 
defendants  in  both  cases,  the  defendants  being  trustees.  The  ques- 
tions of  law  considered  and  decided  make  the  opinion  one  of  interest 
to  the  profession  and  the  public.  The  facts  are  sufficiently  stated  by 
the  judge. 

Judge  Seymour's  Opinion.  These  two  cases  have  been  submitted 
to  me  as  arbitrator  under  a  rule  of  court.  The  two  are  substantially 
alike.  The  plaintiffs  were  respectively  tenants  of  the  defendants, 
occupying  a  brick  building  called  the  Russ  Place,  which  the  defend- 
ants owned  as  trustees  in  fee,  situate  on  the  west  side  of  Main  street, 
in  the  city  of  Hartford.  The  plaintiffs  aver  that  while  they  were 
thus  occupying  the  tenement  on  the  13th  day  of  July,  1869,  and  for 
several  days  next  previous  thereto,  the  defendants  carelessly  and  negli- 
gently excavated  and  removed,  and  caused  to  be  excavated  and  re- 
moved, the  earth  and  foundation  from  under  the  south  wall  of  said 
tenement  and  did  thereby  remove  the  necessary  support  of  said  wall, 
and  on  said  day  had  negligently  and  carelessly  made  and  caused  to  be 
made  the  excavation  and  removal  aforesaid,  without  providing  other 
necessary  support  of  said  wall,  and  had  negligently  omitted  to  shore 
up  said  wall  as  aforesaid,  although  warned  by  the  plaintiffs  of  the 
danger,  whereby  the  wall  sank  and  fell  and  the  whole  building  was 
demolished,  and  the  plaintiffs'  goods  of  great  value  were  destroyed. 

There  is  no  serious  conflict  of  testimony.  Indeed  most  of  the 
facts  are  agreed  to.  The  relation  of  the  parties  to  each  other  is  as 
stated  in  the  writ.  One  Duffy  owned  the  premises  south  of  and  ad- 
joining those  of  the  defendants,  and  he  had  pulled  down  a  tenement 
on  his  lot  in  order  to  rebuild.  Neither  building  had  a  cellar.  Duffy 
had  made  considerable  progress  in  digging  a  cellar  on  his  lot,  when 
he  had  a  communication  with  the  defendants  proposing  that  they 
should  join  him  in  building  a  party  wall  of  stone  under  the  south 
wall  of  the  defendants'  tenement.  Duffy's  proposition  was  favor- 
ably entertained,  and  resulted  in  a  verbal  contract  with  a  builder 
and  mason  by  trade,  to  remove  the  earth  from  under  the  south  wall 
of  the  defendants'  tenement  and  underpin  it  with  stone.  He  was  to 
furnish  everjrthing  needed  for  the  job.  The  stone  structure  was  to 
be  laid  eight  feet  below  the  sidewalk  and  was  to  extend  the  depth  of 
the  defendants'  building,  and  was  to  be  two  and  a  half  feet  in 


CHAP.   XVII.]  INDEPENDENT   CONTRACTORS.  597 

thickness,  nine  inches  being  on  Duffy's  land  and  one  foot  nine  inches 
on  the  defendants'  land.  The  price  agreed  on  was  $500,  one-half  to 
be  paid  by  Mr,  Duffy  and  one-half  by  the  defendants.  The  defendants 
and  Mr.  Duffy  were  the  contracting  parties  on  one  side  and  the 
mason  on  the  other.  The  defendants  did  not  have,  now  were  they 
by  the  terms  of  the  contract  to  have,  any  oversight  or  direction  of 
the  job.  They  relied  on  the  skill  and  experience  of  the  mason  to  do 
the  work  properly,  carefully,  and  according  to  his  contract. 

The  contractor  commenced  his  work  about  the  12th  of  July,  under- 
mining at  first  about  nine  feet  of  the  defendants'  wall  and  immedi- 
ately began  filling  up  the  gap  with  stone.  On  the  13th  he  continued 
the  stone  work,  but  unfortunately  and  unadvisedly  he  undermined 
the  wall  at  another  place  before  the  first  gap  was  filled  and  thus 
weakened  the  foundation,  so  that  at  about  half-past  three  o'clock  in 
the  afternoon  of  the  13th  of  July,  the  whole  building  tumbled  into 
a  mass  of  shapeless  ruins.  The  occupants  barely  escaped  with  their 
lives,  saving  none  of  their  property. 

The  principal  question  of  law  raised  in  the  case  arises  out  of  the 
foregoing  facts.  Some  other  facts,  however,  appeared  in  evidence 
which  will  be  hereafter  noticed,  as  bearing  upon  the  question  of  the 
defendants'  liability.  The  first  question  suggested  is,  whether  this 
negligence  of  the  mason  can  in  law  be  imputed  to  the  defendants. 
If  he  was  their  servant  his  carelessness  is  in  law  theirs.  If,  on  the 
other  hand,  he  was  merely  a  contractor,  acting  as  such  in  an  inde- 
pendent business,  they  are  not  under  the  general  rule  of  law  liable, 
though  they  may  even  then  under  certain  circumstances  be  held 
responsible.  Whatever  obscurity  may  heretofore  have  rested  upon 
the  distinction  between  servant  and  contractor,  it  is  now  established 
law  that  such  a  distinction  exists,  and  the  elements  which  distinguish 
one  from  the  other  by  the  modem  decisions  have  been  determined 
with  considerable  approach  to  exactness  and  accuracy,  though  it  must 
be  admitted  that  in  some  instances  the  distinction  is  nice  and  difficult. 
In  this  case  it  is  to  be  noticed : 

1.  That  the  mason  was  employed  in  a  single  transaction  at  a 
specified  price  for  the  job. 

2.  By  the  terms  of  the  contract  he  was  to  accomplish  a  certain 
specified  result,  the  choice  of  means  and  methods  and  details  being 
left  wholly  to  him. 

3.  The  employment  was  of  a  mechanic  in  his  regular  business, 
recognized  as  a  distinct  trade,  requiring  skill  and  experience,  and 
to  which  apprenticeships  are  served. 

4.  The  contractor's  duty  was  to  conform  himself  to  the  terms  of 
the  contract,  and  he  was  not  subject  to  the  immediate  direction  and 
control  of  his  employers. 

These  circumstances  by  all  the  authorities  indicate  a  contractor  in 
contradistinction  from  a  mere  servant,  and  'the  defendants  cannot  in 


698  LAWRENCE  V.   SHIPMAN.  [CHAP.   XVn. 

my  judgment  be  subjected  for  the  negligence  of  the  contractor,  upon 
the  basis  of  the  relation  of  master  and  servant.  But  it  was  suggested 
in  the  argument  that  as  the  contractor  was  at  work  upon  the  de- 
fendants' property,  by  their  procurement  and  for  their  benefit,  and 
being  selected  by  them,  natural  justice  requires  that  they  should  bear 
the  consequences  of  his  negligence  rather  than  the  plaintiffs,  who 
are  innocent  sufferers,  having  had  no  agency  whatever  in  the  trans- 
action which  caused  the  loss. 

These  suggestions  are  not  without  a  show  of  reason,  and  their 
force  is  fully  admitted  in  the  law  as  applicable  to  a  certain  class  of 
cases. 

1.  If  a  contractor  faithfully  performs  his  contract,  and  a  third 
person  is  injured  by  the  contractor,  in  the  course  of  its  due  perform- 
ance, or  by  its  result,  the  employer  is  liable,  for  he  causes  the  precise 
act  to  be  done  which  occasions  the  injury ;  but  for  negligences  of  the 
contractor,  not  done  under  the  contract  but  in  violation  of  it,  the 
employer  is  in  general  not  liable.  It  is  not  claimed  here  that  the 
injury  to  the  plaintiffs  arose  from  the  due  performance  of  the  con- 
tract. On  the  contrary,  it  resulted  from  the  breach  of  the  contract, 
by  the  contractor  not  doing  his  work  with  suitable  care. 

2.  If  I  employ  a  contractor  to  do  a  job  of  work  for  me  which  in 
the  progress  of  its  execution  obviously  exposes  others  to  unusual 
peril,  I  ought,  I  think,  to  be  responsible  upon  the  same  principle 
as  in  the  last  case,  for  I  cause  acts  to  be  done  which  naturally  ex- 
pose others  to  injury.  The  case  now  before  me  could  not,  however, 
I  think,  come  under  this  head.  The  peril,  whatever  it  was,  was 
mainly  to  the  defendants'  own  tenement,  and  cannot  be  treated,  not- 
withstanding the  unfortunate  event,  as  one  at  all  imminent  to  the 
plaintiffs. 

3.  If  I  employ  as  a  contractor  a  person  incompetent  and  untrust- 
worthy, I  may  be  liable  for  injuries  done  to  third  persons  by  his 
carelessness  in  the  execution  of  his  contract.  This,  too,  has  no  ap- 
plication to  the  case  before  me.  But  the  plaintiffs  claim  that  the 
same  principle  is  applicable  to  the  employment  of  a  person  pecu- 
niarily irresponsible,  and  evidence  was  received,  subject  to  objection, 
that  the  contractor  was  destitute  of  property;  and  I  am  called  upon 
to  decide  the  effect  of  this  fact.  I  am  not  prepared  to  say  that  this 
fact  may  not  be  one  of  some  weight  where  the  work  to  be  done  is 
hazardous  to  others.  If  a  person  having  an  interest  in  a  job  which 
naturally  exposes  others  to  peril,  should  attempt  to  shield  himself 
from  responsibility  by  contracting  with  a  bankrupt  mechanic,  I  think 
the  employers  might  be  subjected  for  damages  done  by  the  contractor, 
but,  as  before  stated,  the  work  to  be  done  by  the  contractor  involved 
no  peril  in  its  usual  performance,  and  I  cannot  hold  the  defendants 
liable  under  this  claim. 

4.  The  employers  may  be  guilty  of  personal  neglect,  connecting 


CHAP.   XVII.]  INDEPENDENT  CONTRACTORS.  599 

itself  with  the  negligence  of  the  contractor  in  such  manner  as  to 
render  both  liable.  I  find  no  precedents  to  guide  me  under  this  head, 
but  the  principles  of  law  lead  inevitably  to  this  conclusion. 

[Here  follows  an  examination  of  the  evidence  on  this  point,  which 
is  omitted  by  the  reporter;  the  conclusion  of  the  judge  being  that 
the  defendants  had  not  been  guilty  of  any  personal  negligence.] 

I  therefore  award  that  the  defendants  are  not  guilty  in  manner 
and  form  as  alleged. 

There  are  other  cases  than  those  mentioned  in  which  the  employer 
is  liable  for  the  negligence  of  his  contractor,  but  they  have  no  special 
application  to  the  matter  before  me.  I  will  barely  allude  to  them. 
It  has  always  been  understood  that  if  the  negligence  creates  a  nui- 
sance the  employer  is  liable,  though  in  a  late  English  case  this  seems 
to  be  somewhat  doubted.  Overton  v.  Freeman,  11  C.  B.  867.  So 
if  the  contract  is  to  do  an  unlawful  thing,  the  employer  as  well  as 
the  contractor  is  liable  for  the  damage  done  in  the  execution  of  the 
contract.  There  was  formerly  a  doubt  whether  the  owner  of  real 
property  could  be  protected  from  liability  caused  by  work  upon  it 
by  a  contractor,  but  it  is  now  settled  that  real  and  personal  property 
stand  upon  the  same  footing  in  this  respect. 

These  eases  are  submitted  to  me  as  an  arbitrator,  with  full  power, 
as  I  understand,  upon  questions  of  law  and  fact.  The  plaintiffs  are 
innocent  sufferers  to  a  large  amount  by  the  fall  of  this  building. 
The  suits  have  been  very  fairly  conducted  with  a  view  to  a  full  in- 
vestigation of  the  facts  and  the  law  applicable  to  the  facts.  There  are 
circumstances  connected  with  the  case  which  I  think  justify  me  in 
making  the  matter  so  far  a  matter  of  mere  arbitration  as  to  award 
that  no  costs  be  taxed  against  the  plaintiffs,  and  that  the  arbitrator's 
fees  be  paid  half  by  the  plaintiffs  and  half  by  the  defendants.^ 

0.  S.  Seymour. 

'  Accord  :  Engel  v.  Eureka  Club,  137  N.  Y.  100.  In  this  case  the  defendant  had 
contracted  with  a  builder  to  alter  defendant's  building.  In  making  the  alterations 
a  wall  of  the  building  fell,  killing  the  plaintiff's  wife.  In  an  action  brought  to  re- 
cover damages  for  her  death  the  court,  after  stating  the  general  rule  as  to  the 
exemption  from  liability  of  an  employer  for  the  acts  of  an  independent  contractor, 
said  : 

"  There  are  well-understood  exceptions  to  this  rule  of  exemption.  Cases  of 
statutory  duty  imposed  upon  individuals  or  corporations ;  of  contracts  which  are 
unlawful,  or  which  provide  for  the  doing  of  acts  which  when  performed  will  create 
a  nuisance,  are  exceptions.  In  cases  of  the  first-mentioned  class  the  power  and  duty 
Imposed  cannot  be  delegated  so  as  to  exempt  the  person  who  accepts  the  duty  im- 
posed, from  responsibility,  and  in  those  of  the  second  class  exemption  from  liability 
would  be  manifestly  contrary  to  public  policy,  since  it  would  shield  the  one  who 
directed  the  commission  of  the  wrong.  (Storrs  v.  City  of  Utica.  17  N.  Y.  104; 
Lowell  V.  L.  &  B.  R.  R.  Co.,  23  Pick.  24  ;  Hole  v.  S.  S.  R.  Co.,  6  H.  &  N.  488  :  Butler 
V.  Hunter,  7  Id.  826.)  There  are  cases  of  still  another  class,  where  the  thing  con- 
tracted to  be  done  Is  necessarily  attended  with  danger,  however  skilfully  and  care- 
fully performed,  or,  in  the  language  of  Judge  Dillon,  Is  '  intrinsically  dangerous," 
in  which  case  it  is  held  that  the  party  who  lets  the  contract  to  do  the  act,  cannot 
thereby  escape  from  responsibility  for  any  injury  resulting  from  its  execution, 
although  the  act  to  be  performed  may  be  lawful  (2  Dillon  on  Mun.  Corp.  S  1029,  and 
cases  cited).  But  if  the  act  to  be  done  may  be  safely  done  in  the  exercise  of  due 
care,  although  in  the  absence  of  such  care  injurious  consequences  to  third  persons 
would  be  likely  to  result,  then  the  contractor  alone  is  liable,  provided  it  was  bis 


600  BOOMEE  V.   WILBUE  ET  AL.  [CHAP.   XVU. 

BOOMEK   V.   WILBUK   et   al. 

176  Mass.  482.     1900. 

ToBT  for  personal  injuries  occasioned  to  the  plaintiff  by  the  fall 
of  brick  and  mortar  from  a  chimney  on  the  house  of  the  defendants 
upon  the  plaintiff  while  she  was  passing  below  on  the  sidewalk. 
There  was  a  judgment  for  plaintiff,  and  defendants  except. 

Hammond,  J.  The  court  instructed  the  jury,  in  substance,  that 
where,  under  a  contract  between  the  owner  of  a  house  and  the  person 
doing  the  work,  work  is  done  upon  the  house,  and  the  owner  retains 
the  right  of  access  to  and  the  control  of,  the  premises,  and  such  work 
is  ordinarily  attended  with  danger  to  the  public  unless  proper  precau- 
tions are  taken  to  avoid  it,  the  owner  is  bound  to  the  exercise  of  due 
care  to  see  that  such  precautions  are  taken  for  the  safety  of  the  public ; 
and  if,  by  reason  of  the  failure  to  take  such  precautions,  a  person  law- 
fully on  the  street  and  in  the  exercise  of  due  care  is  injured,  the 
owner  is  answerable  notwithstanding  the  work  is  being  done  under 
a  contract  between  him  and  the  contractor. 

Having  stated  this  as  a  general  rule,  the  court  applied  it  to  this 
case  as  follows :  "  If  the  defendants  employed  a  person  to  repair  the 
chimneys  on  their  buildings  adjoining  the  highway  under  the  con- 
tract, to  repair  them  for  a  fixed  sum,  and  the  defendants  retained 
the  right,  retained  control,  and  the  right  of  access  to  the  building, 
and  such  work  on  the  chimneys  would  ordinarily  be  attended  with 
danger  to  the  public,  unless  proper  precautions  to  avoid  it  were  taken, 
the  defendants  were  bound  to  take  proper  precautions,  or  to  see  that 
proper  precautions  were  taken,  for  the  safety  of  the  public;  and,  if 
the  plaintiff  was  injured  while  she  was  lawfully  on  the  street  adjoin- 
ing the  defendant's  premises,  and  in  the  exercise  of  due  care,  by  reason 
of  the  failure  of  the  defendants  to  take  proper  precautions,  or  by 
reason  of  their  failure  to  see  that  proper  precautions  were  taken,  to 
avoid  such  injury,  then  the  defendants  are  liable  for  the  injury." 

We  understand  these  instructions  to  mean  that,  even  if  the  de- 
fendants employed  a  competent  independent  contractor  to  repair 
these  chimneys,  who  was  to  do  the  work  without  any  dictation  or 
supervision  on  the  part  of  the  defendants  over  the  details  of  the 

duty  under  the  contract  to  exercise  such  care.     (McCafferty  v.  L.  D.  &'  P.  M.  R.  R. 
Co.,  61  N.  Y.  178 ;   Conners  v.  Hennessey,  112  Mass.  96 ;   Butler  v.  Hunter,  supra.) 

"  The  application  of  these  principles  to  this  case  exonerates  the  defendant  from 
liability.  The  taking  down  of  the  wall  was  not  intrinsically  dangerous.  The  only 
danger  to  be  apprehended  was  in  doing  it  carelessly  or  unskilfully.  It  was  in  the 
manner  of  doing  it  and  not  in  the  thing  itself.  The  danger  of  leaving  the  wall 
without  support  was  obvious,  and  could  have  been  easily  avoided,  and  the  usual 
method  required  that  precautions  should  be  taken.  It  was  the  duty  of  the  con- 
tractor to  take  such  precautions,  because  it  was  implied  in  his  contract  that  he 
should  take  down  the  wall  in  a  careful  and  proper  manner  (Pollock,  C.  B.,  Butler 
V.  Hunter,  supra)."    Pages  104,  105. 


CHAP.   XVII.]  INDEPENDENT  CONTRACTORS.  601 

work,  or  the  maimer  in  which  it  should  be  done,  the  defendants  would 
be  answerable  for  the  failure  of  the  contractor  to  take  proper  pre- 
cautions to  protect  travellers  upon  the  highway  from  falling  bricks. 

While  the  master  is  liable  for  the  negligence  of  the  servant,  yet 
when  the  person  employed  is  engaged  under  an  entire  contract  for  a 
gross  sum  in  an  independent  operation,  and  is  not  subject  to  the 
direction  and  control  of  his  employer,  the  relation  is  not  regarded 
as  that  of  master  and  servant,  but  as  that  of  contractor  and  con- 
tractee;  and  in  such  case  the  general  rule  is  that  the  negligence  of 
the  contracting  party  cannot  be  charged  upon  him  for  whom  the 
work  is  to  be  done ;  and  this  rule  is  applicable  even  where  the  owner 
of  the  land  is  the  person  who  hires  the  contractor,  and  for  whose 
benefit  the  work  is  done.  Hilliard  v.  Eichardson,  3  Gray,  349; 
Forsyth  v.  Hooper,  11  Allen,  419;  Conners  v.  Hennessey,  112  Mass. 
96;  Harding  v.  City  of  Boston,  163  Mass.  18.  There  are,  however, 
some  well-known  exceptions  to  the  rule.  If  the  performance  of  the 
work  will  necessarily  bring  wrongful  consequences  to  pass  unless 
guarded  against,  and  if  the  contract  cannot  be  performed  except 
under  the  right  of  the  employer  who  retains  the  right  of  access,  the 
law  may  hold  the  employer  answerable  for  negligence  in  the  perform- 
ance of  the  work. 

Woodman  v.  Railroad  Co.,  149  Mass.  335,  was  such  a  case,  and 
the  defendant  was  held  liable  for  the  act  of  an  independent  contractor 
hired  by  it  to  dig  up  and  obstruct  the  streets  for  the  purpose  of  lay- 
ing down  the  track,  upon  the  ground  that  the  contract  called  for 
an  obstruction  to  the  highway  which  necessarily  would  be  a  nuisance 
unless  properly  guarded  against. 

The  same  principle  is  further  illustrated  in  Curtis  v.  Kiley,  153 
Mass.  123,  and  Thompson  v.  Railway  Co.,  170  Mass.  577. 

Again,  if  the  contract  calls  for  the  construction  of  a  nuisance  upon 
the  land  of  the  employer,  he  may  be  held  answerable  for  the  conse- 
quences. In  Gorham  v.  Gross,  125  Mass.  232,  the  defendant  had 
caused  to  be  constructed  by  an  independent  contractor  a  party  wall, 
half  on  the  defendant's  land  and  half  upon  adjoining  land ;  and  after 
it  was  completed  and  accepted  it  fell,  causing  damage  to  the  property 
of  the  adjoining  landowner.  There  was  evidence  that  the  fall  of  the 
wall  was  occasioned  by  negligence  in  its  construction.  The  court 
said  that  the  wall  as  constructed  was  a  nuisance  "  likely  to  do  mis- 
chief," and  held  the  defendant  answerable  for  the  damage  caused  by 
its  fall.    To  the  same  effect  is  Cork  v.  Blossom,  162  Mass.  330. 

The  instructions  to  the  jury  allowed  them  to  find  a  verdict  for  the 
plaintiff,  not  upon  the  ground  that  the  chimney  was  a  nuisance 
"  likely  to  do  mischief,"  but  upon  the  ground  that  the  work  of  repair 
called  for  by  the  contract  was  necessarily  a  nuisance,  within  the  rule 
stated  in  Woodman  v.  Railroad  Co.,  vbi  supra,  and  other  similar 
cases. 


603  BOOMER   V.   WILBUR  ET   AL.  [CHAP.   XVII. 

The  work  called  for  was  the  repair  of  chimneys.  At  most,  the 
brick  were  to  be  taken  off  for  a  few  feet,  and  relaid.  The  work  which 
was  to  be  done  was  not  such  as  would  necessarily  endanger  persons 
in  the  street.  It  did  not  involve  throwing  the  brick  into  the  street, 
or  causing  or  allowing  them  to  fall  so  as  to  endanger  persons  travel- 
ling therein.  It  is  plain  that,  unless  there  was  negligence  in  the 
actual  handling  of  the  brick,  there  could  be  no  injury  to  the  passing 
traveller.  The  case  very  much  resembles  Pye  v.  Faxon,  156  Mass. 
471.  The  plaintiff  in  that  case,  being  the  tenant  of  a  house,  sued  the 
owner  of  an  adjoining  lot  for  trespasses  alleged  to  have  been  com- 
mitted upon  the  plaintiff's  estate  by  the  defendant  while  engaged  in 
constructing  a  large  building  on  his  lot.  It  appeared  from  the  testi- 
mony that  the  wall  next  to  the  plaintiff's  house  was  not  built  on  the 
boundary  line,  but  was  several  inches  from  it,  and  that  the  staging 
used  in  building  it  was  placed  upon  the  inside ;  that  the  brick,  when 
laid,  pressed  out  the  mortar,  which  was  then  scraped  off  by  the 
trowels  of  the  masons,  and  some  of  it  dropped  upon  the  plaintiff's 
land,  upon  her  rear  windows,  and  upon  the  clothes  hanging  in  her 
back  yard.  At  the  trial  the  presiding  judge  instructed  the  jury  that, 
if  the  dropping  of  the  mortar  was  from  the  carelessness  of  the  work- 
men, the  defendant  was  not  liable,  but,  if  it  was  something  neces- 
sarily involved  in  the  building  of  the  wall,  then  he  might  be  liable; 
and  these  instructions  were  held  to  be  correct. 

This  is  not  a'  case  where  the  work,  even  if  properly  done,  creates 
a  peril,  unless  guarded  against,  as  in  the  cases  relied  upon  by  the 
plaintiff.  The  accident  was  caused  by  the  act  of  the  contractor  in 
doing  what  it  was  not  necessary  for  him  to  do,  what  he  was  not 
expected  to  do,  and  what  he  did  not  intend  to  do.  If  it  had  been 
necessary  for  him  to  topple  the  chimney  over  into  the  street,  or  to 
remove  the  bricks  by  letting  them  fall  into  it,  or  the  contract  had 
contemplated  such  action,  the  instructions  would  not  have  been 
objectionable;  but,  as  this  was  not  necessary  or  intended,  the  work 
could  not  be  classed  as  work  which,  if  properly  done,  was  ordinarily 
attended  with  danger  to  the  public. 

The  negligence,  if  any,  was  in  a  mere  detail  of  the  work.  The 
contract  did  not  contemplate  such  negligence,  and  the  negligent  party 
is  the  only  one  to  be  held.  The  case  is  clearly  distinguishable  from 
Woodman  v.  Railroad  Co.  uhi  supra,  and  others  of  a  like  character, 
and  must  be  classed  with  Conners  v.  Hennessey,  uhi  supra,  and  others 
like  it.  .  .  .  Exceptions  sustained. 


CHAP.  XVn.]  INDEPENDENT  CONTRACTORS.  603 


BERG   V.   PARSONS. 

156  N.  Y.  109.     1898. 

Appeal  from  a  judgment  of  the  late  General  Term  of  the  Supreme 
Court  in  the  first  judicial  department,  entered  November  20,  1895, 
aflBrming  a  judgment  in  favor  of  plaintiff  entered  upon  a  verdict, 
and  an  order  denying  a  motion  for  a  new  trial. 

This  action  was  brought  to  recover  damages  alleged  to  have  been 
sustained  by  plaintiff  by  reason  of  the  carelessness  of  a  contractor 
employed  by  the  defendant  to  blast  out  a  cellar  upon  his  premises, 
which  were  adjacent  to  those  of  the  plaintiff. 

The  facts  are  stated  in  the  dissenting  opinion. 

Martin,  J.  The  doctrine  of  respondeat  superior  is  based  upon 
the  relation  of  master  and  servant  or  principal  and  agent.  As  no 
such  relation  existed  between  the  parties,  I  find  no  ground  upon 
which  the  judgment  in  this  action  can  be  sustained. 

The  rule  that  where  the  relation  of  master  and  servant  or  prin- 
cipal and  agent  does  not  exist,  but  an  injury  results  from  negligence 
in  the  performance  of  work  by  a  contractor,  the  party  with  whom 
he  contracts  is  not  responsible  for  his  negligence  or  that  of  his  ser- 
vants, is  well  established  by  the  authorities  in  this  state.  (Blake  v. 
Ferris,  5  N.  Y.  48;  Pack  v.  Mayor,  etc.,  8  N.  Y.  222;  Kelly  v. 
Mayor,  etc.,  11  N.  Y.  432 ;  McCafferty  v.  S.  D.  &  P.  M.  R.  R.  Co., 
61  N.  Y.  178 ;  King  v.  N.  Y.  C.  &  H.  R.  R.  R.  Co.,  66  N.  Y.  181 ; 
Town  of  Pierrepont  v.  Loveless,  72  N.  Y.  211 ;  Ferguson  v.  Hubbell, 
97  N.  Y.  507;  Herrington  v.  Village  of  Lansingburgh,  110  N.  Y. 
145;  Roemer  v.  Striker,  142  N.  Y.  134.)   .  .  . 

It  seems  to  me  that  the  principle  of  these  decisions  is  decisive  of 
the  case  at  bar,  and  is  directly  adverse  to  the  contention  of  the 
respondent.  .  .  . 

There  are  certain  exceptional  cases  where  a  person  employing  a 
contractor  is  liable,  which,  briefly  stated,  are:  Where  the  employer 
personally  interferes  with  the  work,  and  the  acts  performed  by  him 
occasion  the  injury;  where  the  thing  contracted  to  be  done  is  un- 
lawful; where  the  acts  performed  create  a  public  nuisance;  and 
where  an  employer  is  bound  by  a  statute  to  do  a  thing  efficiently 
and  an  injury  results  from  its  inefficiency.  Manifestly,  this  case  falls 
within  none  of  the  exceptions  to  which  we  have  referred.  There 
was  no  interference  by  the  defendant.  The  thing  contracted  to  be 
done  was  lawful.  The  work  did  not  constitute  a  public  nuisance, 
and  there  was  no  statute  binding  the  defendant  to  efficiently  perform 
it.  In  none  of  those  exceptional  cases  does  the  question  of  negligence 
arise.  There  the  action  is  based  upon  the  wrongful  act  of  the  party, 
and  may  be  maintained  against  the  author  or  the  person  performing 


604  BEBG   V.   PARSONS.  [CHAP.   XVII. 

or  continuing  it.  In  the  case  at  bar  the  work  contracted  for  was  law- 
ful and  necessary  for  the  improvement  and  use  of  the  defendant'^ 
property.  Consequently  no  liability  can  be  based  upon  the  illegality 
of  the  transaction,  but  it  must  stand  upon  the  negligence  of  the 
contractor  or  his  employee  alone.  It  seems  very  obvious  that,  under 
the  authorities,  the  defendant  was  not  respoiiible  for  the  acts  of 
the  contractor  or  his  employees,  and  that  the  court  should  have 
granted  the  defendant's  motion  for  a  nonsuit.  If  a  contrary  rule 
were  established  it  would  not  only  impose  upon  the  owners  of  real 
property  an  improper  restraint  in  contracting  for  its  improvement, 
but  would  open  a  new  and  unlimited  field  for  actions  for  the  negli- 
gence of  others  which  has  not  hitherto  existed  in  this  state,  and 
practically  overrule  a  long  line  of  decisions  in  this  court  which  firmly 
establish  a  contrary  doctrine. 

It  follows  that  the  judgment  should  be  reversed. 

Gray,  J.  (dissenting).  The  question  is  whether,  in  a  case  like 
the  present  one,  where  the  work  contracted  for  is  obviously  and 
necessarily  hazardous,  it  is  an  assumption  inconsistent  with  the  doc- 
trine of  exemption  for  the  acts  of  an  independent  contractor  that 
a  legal  duty  is  imposed  upon  him  who  employs  the  contractor  to 
use  a  reasonable  amount  of  care,  in  the  selection  of  one  who  is  both 
competent  and  careful,  and  that  for  a  failure  to  perform  that  duty 
he  may  be  held  for  the  damages  occasioned  by  negligence. 

The  plaintiff  and  the  defendant  were  owners  of  adjoining  pieces 
of  real  estate  in  the  city  of  New  York.  Upon  the  plaintiff's  prop- 
erty there  was  a  dwelling-house.  The  defendant's  property  was 
vacant  and  was  covered  with  a  mass  of  rock,  which  extended  above 
the  curb.  The  defendant  made  a  contract  with  one  Tobin  to  exca- 
vate his  plot  to  the  depth  of  ten  feet  below  the  curb  line,  prepara- 
tory to  building  thereon.  In  the  performance  of  the  contract,  Tobin 
appears  to  have  proceeded  unskilfully  and  with  considerable  reck- 
lessness and,  in  the  work  of  blasting,  he  caused  some  damage  to  the 
plaintiff's  house,  both  within  and  without.  For  the  damage  so  sus- 
tained the  plaintiff  brought  the  present  action.  The  complaint 
charged,  and  the  case  went  to  the  jury  upon  the  theory,  that  the 
defendant  had  failed  to  exercise  proper  care,  or  a  due  regard,  for 
the  safety  of  the  plaintiff's  premises  in  the  selection  of  a  competent 
and  careful  contractor  to  do  the  dangerous  work  of  excavating  the 
earth  and  rock.  The  defense  was,  in  substance,  that  the  person 
employed  by  the  defendant  for  the  purpose  was  an  independent 
contractor,  having  the  entire  control  and  management  of  the  work, 
and  that  as  the  result  of  inquiries,  showing  him  to  be  a  competent, 
skilful,  and  careful  contractor,  the  defendant  had  made  the  contract 
with  him.  Upon  the  trial,  the  evidence  showed  that  the  defendant 
had  committed  to  one  Squier  the  supervision  of  the  construction 
of  the  building  upon  his  land  and  that  he  acted  for  him  in  all  per- 


€HAP,   XVII.]  INDEPENDENT   CONTRACTORS.  605 

tinent  matters.  Squier  was  a  builder  of  very  considerable  experience 
and  had  had  much  to  do  with  contracts  in  the  building  of  houses  in 
the  city.  He  had  never  heard  of  Tobin,  before  giving  him  the  con- 
tract for  the  work  in  question.  That  work  was  shown  to  have  been 
plainly  of  a  hazardous  nature ;  inasmuch  as  it  necessitated  the  blast- 
ing out  of  a  ledge  of  rock,  which  extended  close  up  to  the  wall  of 
the  plaintiff's  adjoining  house.  There  was  evidence  to  the  effect 
that  it  was  quite  possible  to  do  this  work  of  excavation  without 
causing  injury  to  the  adjoining  building,  and  that  work  of  that 
description  was  being  constantly  done  in  the  city,  with  safety  to 
adjoining  premises.  The  way  that  Tobin  performed  his  contract 
warranted  a  belief  that  he  was  incompetent  and  reckless.  He  was 
the  lowest  bidder  for  the  work.  The  evidence  showed  him  to  be  an 
illiterate  person  and  of  intemperate  habits;  whose  appearance  and 
surroundings  might  permit  inferences  adverse  to  his  fitness  to  do 
responsible  work  of  such  a  nature.  There  was  testimony  concern- 
ing two  previous  jobs  of  a  similar  nature,  from  which  it  might  be 
inferred  that  Tobin  was  either  reckless,  or  lacked  skill.  Squier  tes- 
tified, for  the  defendant,  to  having  inquired  of  the  representative 
of  a  real  estate  operator  about  Tobin;  who  spoke  of  him  as  a  good 
and  careful  blaster,  and  he  visited  two  places,  to  which  Tobin  had 
referred  him,  to  see  work  that  he  had  done.  That  inquiry  satisfied 
him.  He  denied  any  knowledge  of  Tobin's  habits;  but  he  made 
no  inquiry  concerning  them.  A  witness  testified  to  having  employed 
Tobin  upon  rock  excavation  and  to  having  found  him  satisfactory 
in  his  work.  While  there  was  evidence  of  some  care  having  been 
exercised  by  the  defendant's  agent,  was  it  of  that  conclusive  nature 
which  precluded  criticism?  As  the  case  stood,  it  could  not  be  said 
as  matter  of  law  that  the  defendant  had  discharged  his  whole  duty 
towards  the  plaintiff,  in  the  matter  of  the  selection  and  employment 
of  a  proper  person  to  perform  the  required  work.  There  was  a  fair 
question  upon  the  evidence,  whether,  in  initiating  a  work  which, 
under  the  particular  circumstances,  was  necessarily  fraught  with 
eome  danger  to  the  adjoining  property,  the  defendant  had  exercised 
a  reasonable  degree  of  prudence  in  the  emplojTuent  of  Tobin.  The 
plaintiff  was  not  obliged  to  show  that  the  defendant  knew  about  the 
characteristics  and  previous  conduct  of  Tobin;  but,  there  being 
evidence,  in  the  testimony  of  the  witnesses,  affecting  his  capacity 
and  habits,  previously  to  the  employment,  it  became  a  question 
whether  defendant's  inquiries  were  sufficient  and  such  as  a  prudent 
man  would  have  made,  who  realized  the  hazards  involved  to  the 
adjoining  property  and  who  intended  to  proceed  about  the  employ- 
ment of  a  contractor,  as  he  would  have  expected  to  be  done  by  if  the 
positions  were  reversed.  The  plaintiff  recovered  a  verdict  for  the 
amount  of  the  expense  to  which  he  had  been  put  in  repairing  the 
damage  done  to  his  house.    It  is,  of  course,  evident  from  that  ver- 


606  BERG   V.   PAE80NS.  [CHAP.   XVII. 

diet  that  the  evidence  had  failed  to  satisfy  the  jury  that  the  defend- 
ant had  proceeded  in  the  matter  with  a  due  regard  for  his  neighbor's 
rights,  or  that  Tobin  was  the  kind  of  man  to  be  intrusted  with  a 
job  demanding  both  skill  and  a  sense  of  responsibility. 

If  there  was  evidence  raising  a  question  as  to  whether  the  defendant 
had  exercised  reasonable  care  in  contracting  out  this  work  to  Tobin, 
then  I  think  it  was  properly  submitted  to  the  determination  of  the 
jury.  What  is  there  in  the  doctrine,  behind  which  the  defendant  seeks 
to  shelter  himself,  which  should  interfere  with  the  trial  and  submis- 
sion of  the  issue  which  was  tendered  by  the  complaint  and  accepted 
by  the  answer;  namely,  whether  proper  care  had  been  exercised  by 
the  defendant  in  committing  the  work  to  Tobin?  The  argument 
for  the  defendant  is,  as  Tobin  was  performing  his  work  as  an  inde- 
pendent contractor,  that  he  and  his  men  were  not  under  the  super- 
vision or  control  of  the  defendant  and  that,  as  no  relation  of  master 
and  servant  existed,  the  defendant  could  come  under  no  liability  for 
Tobin's  negligent  acts. 

The  doctrine,  which  exempts  a  person  from  liability  for  damages 
caused  by  the  negligence  of  an  independent  contractor  employed  by 
him,  is  well  established  in  this  state.  It  rests  upon  a  basis  of  jus- 
tice and  of  reason  and  was  a  departure  from  the  general  doctrine  of 
the  responsibility  of  the  master  for  the  servant's  acts;  which  the 
courts,  both  in  England  and  this  state,  have  agreed  upon  within 
comparatively  recent  years.  (Quarman  v.  Burnett,  6  M.  &  W.  499; 
Eeedie  v.  Eailway  Co.,  4  Exch.  254;  Blake  v.  Ferris,  5  N.  Y.  48; 
Storrs  V.  City  of  Utica,  17  ib.  104.)  Formerly,  the  rule  respondeat 
superior  was  deemed  controlling  and  the  legal  relation  of  master 
and  servant,  to  which  it  was  applicable,  received  the  broad  extension, 
within  which  the  employer  of  another  became  responsible  for  the 
other's  acts,  upon  the  principle  qui  facit  per  alium  facit  per  se.  That, 
as  a  maxim,  handed  down  from  the  Eoman  Code,  meant  that  the 
agency  of  the  servant  was  an  instrument  of  his  employer.  Any  man 
having  authority  over  another's  actions,  who  commands  him  to  do  an 
act,  or  who  may  be  deemed  to  have  impliedly  commanded  him,  in  the 
ordinary  course  of  his  employment,  or  business,  becomes  responsible 
for  his  acts,  as  for  his  own.  The  injustice,  however,  of  applying 
this  principle  to  a  situation  where  a  person  is  engaged  in  doing  a 
piece  of  work,  under  an  emplo}Tnent  or  a  contract,  in  the  perfor- 
mance of  which  he  uses  his  own  means  and  his  own  servants,  without 
any  control  upon  the  part  of  the  general  employer,  became  apparent. 
It  was  evident  that  the  relation  of  master  and  servant  did  not  exist, 
when  the  relation  between  the  parties  was  governed  by  such  an 
engagement  or  contract.  Whereas,  under  the  operation  of  the  rule, 
respondeat  superior,  the  injured  person  might  hold  the  master  re- 
sponsible and  disregard  the  servant,  who  was  the  immediate  author 
of  the  in jur}- ;  under  the  introduction  of  the  reasonable  modification 


CHAP.   XVII.]  INDEPENDENT  CONTRACTORS.  607 

of  that  rule,  the  independent  contractor,  and  not  the  general  em- 
ployer, became  responsible  for  negligent  acts,  committed  in  person, 
or  by  those  under  his  orders. 

The  principle  of  the  decision  below,  in  the  present  case,  in  my 
judgment,  in  no  respect  weakens  the  doctrine  of  the  exemption  of 
the  general  employer  from  liability  for  damages  caused  by  the  negli- 
gence of  the  independent  contractor;  nor,  in  any  wise,  threatens  its 
stability.  Nor  does  it  affect  it,  otherwise  than  by  establishing  a 
reasonable  safeguard  against  too  broad  a  claim  for  exemption.  It 
seems  to  me  a  proposition,  as  clear  as  it  is  reasonable,  that  the  as- 
sumption that  there  has  been  an  exercise  of  due  care  in  the  selection 
of  a  competent  and  careful  contractor,  is  a  part  of  the  foundation 
for  the  doctrine.  I  do  not  think  that  it  would  do  to  hold  that  a 
person,  by  the  mere  act  of  employing  a  contractor  to  do  some  work 
of  a  nature  in  itself  obviously  hazardous  to  others,  thereby  discharges 
himself  of  all  responsibility.  Something  more  is  required  of  him. 
With  that  due  regard  for  his  neighbor's  rights,  which  is  obligatory 
upon  all,  in  the  use  which  they  make  of  their  own  property,  he  should 
be  held  to  the  exercise  of  reasonable  care  and  of  some  deliberation  in 
the  selection  of  a  contractor.  We  are  referred  to  decisions  of  the 
courts  of  other  states,  where  this  duty  on  the  part  of  a  general  em- 
ployer seems  to  have  been  distinctly  recognized  (Norwalk  Gaslight 
Co.  V.  Borough  of  Norwalk,  63  Conn.  495 ;  Brannok  v.  Elmore,  114 
Mo.  55),  and  while  precisely  a  similar  case  to  this  may  not  be  found 
in  our  reports,  the  reasonableness  of  the  proposition  commends  and 
sustains  it.  As  I  have  suggested,  it  may  be  assumed  as  an  inherent 
element  of  the  employer's  claim  for  exemption.  (See  Wharton  on 
Negligence,  sec.  181 ;  Story  on  Agency,  9th  ed.,  sec.  454a,  at  p.  556, 
note;  Cuff  v.  K.  R.  Co.,  35  N.  J.  Law,  17 ;  Ardesco  Oil  Co.  v.  Gilson, 
63  Pa.  St.  146;  Sturgis  v.  Theological  Educational  Society,  130 
Mass.  414).  In  the  text  books  and  cases  just  referred  to,  it  will  be 
observed  that  the  assumption  I  mention  is  recognized  as  one  associated 
with  the  employment  of  an  independent  contractor.  I  do  not  think 
it  needs  much  argument  to  vindicate  the  entire  propriety  of  the 
assumption.  The  exemption  from  liability  should  not  be  so  broad  as 
to  exclude  the  consideration  of  the  manner  in  which  the  independent 
contractor  was  selected  for  the  particular  work.  When  we  consider 
the  hazards  incident  to  the  work  of  blasting,  in  a  city  block,  there 
ought  to  be  no  question,  where  the  work  is  obviously  and  necessarily 
of  a  dangerous  nature,  as  to  the  propriety  of  imposing  upon  the  owner 
of  the  property  to  be  improved  thereby  a  legal  duty  to  exercise 
proper  care  in  the  selection  of  his  contractor.  If  that  be  true,  then 
the  question  of  the  exercise  of  due  care  becomes  one  of  fact  upon  the 
evidence.  If  there  is  evidence  proving,  or  tending  to  prove,  that 
the  contractor  was  an  incompetent,  or  a  reckless,  or  an  unfit  person 
to  be  entrusted  with  the  job  and  that  it  was  possible  for  the  defendant 


608  DEMING   V.   TEKMINAL   RY.   OF   BUFFALO.       [CHAP.   XVH. 

TO  have  discovered  these  facts  by  inquiry;  then  it  is  for  the  jury  to 
render  their  verdict  upon  the  issue  between  the  parties.  It  is  not 
essential  that  the  defendant  be  shown  to  have  known  of  the  acts  of 
incompetency,  or  of  the  conduct  from  which  unfitness  may  be  in- 
ferred. It  is  sufficient  if  it  appear  that  no  sufficient  inquiry  had  been 
made,  and  that  a  careful  inquiry  might  have  revealed  the  incom- 
petency or  the  unfitness.  The  circumstances  of  the  selection  of  the 
contractor  might  be  such  as  to  justify  a  belief  that  there  was  a 
failure  to  exercise  care  and  prudence  in  the  matter. 

The  conclusion,  therefore,  which  I  reach  after  a  careful  considera- 
tion of  the  question  is  that  the  defendant,  in  employing  a  contractor 
to  blast  out  the  rock  upon  his  premises,  a  work  obviously  dangerous 
to  the  adjoining  owner,  owed  a  legal  duty  to  the  plaintiff  to  care- 
fully select  one  who  was  both  competent  and  careful,  and  that  for  a 
failure  to  perform  that  duty,  under  the  circumstances  of  this  case, 
he  became  responsible  for  any  injury  to  the  plaintiff's  property  re- 
sulting from  the  contractor's  negligence.  I  think  that  there  was 
evidence  adduced,  from  which  the  jury  might  infer  that  the  defend- 
ant had  not  proceeded  with  that  care  and  due  regard  for  the  plain- 
tiff's rights,  which  were  incumbent  upon  him.  It  may  not  have  been 
very  strong ;  but  it  cannot  be  said  that  there  was  none  giving  rise  to 
inferences.  Minds  might  differ  upon  the  question;  but  that  only 
goes  to  show  the  necessity  of  leaving  it  to  the  arbitrament  of  a  jury. 
The  learned  justices  below  have  thought  that  there  was  a  question  for 
the  jury  upon  the  evidence.  I  think  that  they  were  right  and  that 
there  are  no  errors  calling  for  a  reversal  of  this  judgment. 

Parker,  Ch.  J.,  O'Brien  and  Vann,  JJ.,  concur  with  Martin,  J., 
for  reversal ;  Bartlett  and  Haight,  J  J.,  concur  with  Gray,  J.,  for 
affirmance. 

Judgment  reversed  and  a  new  trial  granted,  with  costs  to  abide 
the  event} 


DEMING  V.  THE   TEEMINAL  EAILWAY  OP 
BUFFALO,   ET   AL. 

169  N.  Y.  1.    1901. 

Appeal  from  a  judgment  of  the  Appellate  Division  of  the  Supreme 
Court  in  the  fourth  judicial  department,  entered  March  28,  1900, 
affirming  a  judgment  in  favor  of  plaintiff  entered  upon  a  verdict 
and  an  order  denying  a  motion  for  a  new  trial. 

The  nature  of  the  action  and  the  facts,  so  far  as  material,  are 
stated  in  the  opinion. 

»  On  the  point  discussed  In  the  dissenting  opinion,  see  Hawke  v.  Brown,  28  N.  Y. 
App.  Div.  37. 


CHAP.   XVII.]  INDEPENDENT   CONTRACTORS.  609 

Paekeb,  Ch.  J.  The  Terminal  Railway  of  Buffalo,  a  corporation 
duly  organized  under  the  laws  of  this  state  for  the  purpose  of  con- 
structing a  railroad  to  form  a  connecting  link  between  the  Lake 
Shore  and  Michigan  Southern  and  the  New  York  Central  and  Hud- 
son Eiver  railroads,  was  in  1897  engaged  in  constructing  its  road 
from  Depew  to  Blaisdell,  to  which  end  it  entered  into  a  contract 
with-  the  firm  of  Smith  &  Lally  by  the  terms  of  which  that  firm  was 
to  perform  the  entire  work  of  construction  in  accordance  with  certain 
plans  and  specifications  which  were  made  a  part  of  the  contract. 
By  the  order  of  the  Supreme  Court  made  in  pursuance  of  statute 
defendant  was  permitted  to  construct  its  road  across  the  White  Cor- 
ners road,  a  public  highway  extending  from  the  city  of  Buffalo  to  the 
village  of  Hamburg,  a  condition  imposed  by  the  order  being  that  it 
should  comply  with  the  statute  and  restore  the  highway  to  such  state 
as  not  to  impair  its  usefulness.  The  plans  and  specifications  re- 
quired that  such  highway  should  be  lifted  eight  feet  and  five  inches 
above  its  original  grade  and  that  the  railroad  track  should  be  de- 
pressed about  twelve  feet  below  the  original  grade,  the  highway  then 
to  be  carried  across  the  track  by  means  of  an  overhead  bridge. 

About  the  seventh  of  September  work  was  begun  at  this  point, 
and  the  contractors  in  the  course  of  their  operations  removed  the 
earth  from  the  west  to  the  east  side  of  the  highway  resulting  in 
the  formation  of  an  embankment  covering  a  little  over  one-half 
of  the  highway  for  a  distance  of  about  six  hundred  feet  north  of  the 
proposed  crossing,  and  it  extended  up  to  within  fifty  or  one  hundred 
feet  of  the  temporary  track.  It  was  about  twelve  feet  wide  on  top, 
the  sides  sloping  gradually  and  its  maximum  height  was  seven  feet. 
When  completed  it  was  designed  to  serve  as  the  roadbed  of  the 
northerly  approach  to  the  bridge  over  the  tracks.  The  highway  at 
this  point  was  four  rods  wide,  and  the  presence  of  the  embankment 
left  a  space  of  about  thirty  feet  in  width  upon  the  west  side  thereof 
for  the  passage  of  teams,  but  only  about  twelve  or  fifteen  feet  of  this 
space  was  used  by  the  travelling  public. 

During  the  evening  of  September  16th,  1897,  the  plaintiff  and  her 
husband,  in  company  with  some  ten  or  twelve  other  people,  while 
going  from  Hamburg  to  Buffalo  in  a  four-seated  drag  drawn  by  four 
horses,  in  charge  of  a  competent  driver,  who  was  ignorant  of  the 
existence  of  the  embankment,  struck  it  with  the  drag,  which  imme- 
diately tipped  over,  throwing  the  plaintiff  to  the  ground,  from  which 
she  received  severe  injuries.  There  were  no  lights  upon  or  in  the 
vicinity  of  the  embankment  to  warn  passers-by  of  the  interference 
with,  and  dangerous  condition  of  the  highway,  and  the  night  was 
dark  and  rainy. 

The  plaintiff  had  a  recovery  which  the  Appellate  Division  affirmed 
and  afterwards  allowed  an  appeal  to  this  court.  Through  requests 
to  charge,  which  were  refused,  and  exceptions  taken  to  the  charge  as 

39 


610  DEMING  V.   TEEMINAL  BY.  OF  BUFFALO.   [CHAP.  XVH. 

made  appellant  is  enabled  to  present  in  this  court  the  question 
whether  it  is  liable  because  of  the  omission  to  properly  guard  the 
embankment  on  the  night  in  question.  Its  claim  is  that  having  let  the 
contract  of  constructing  the  entire  road  to  competent  and  skilful 
independent  contractors,  it  is  not  liable  for  any  failure  on  their  part 
to  protect  passers-by  upon  the  highway  by  placing  lights  upon  the 
embankment  and  otherwise  guarding  it. 

The  first  authority  cited  by  it  in  support  of  its  position  is  the  well- 
known  case  of  Blake  v.  Ferris  (5  N.  Y.  48)  wherein  it  was  held  that 
"  where  persons  having  a  license  or  a  grant  to  construct  at  their  own 
expense  a  sewer  in  a  public  street  engage  another  person  to  construct 
it  at  a  stipulated  price  for  the  whole  work  they  are  not  liable  to 
other  persons  for  any  injuries  resulting  from  the  negligent  manner 
in  which  the  sewer  may  be  left  at  night  by  the  workmen  employed 
in  its  construction."  In  that  case  the  license  or  grant  given  by  the 
city  authorities  contained  a  provision  "  that  the  grantees  should  cause 
proper  guards  and  lights  to  be  placed  at  the  excavation  and  should  be 
answerable  for  damages  or  injuries  which  might  be  occasioned  to 
persons,  animals  or  property  in  the  construction  of  the  sewer."  But 
the  court  after  a  very  able  discussion  of  the  doctrine  of  respondeat 
superior,  reached  the  conclusion  that  only  an  immediate  employer  of 
the  agent  or  servant  who  neglected  to  properly  guard  the  sewer  on  the 
night  when  the  injuries  occurred  was  responsible  for  that  negligent 
act.  It  must  be  conceded,  if  that  case  was  properly  decided,  that  the 
defendant  is  not  liable  for  the  failure  of  the  contractors,  their  agents 
or  servants,  in  this  case  to  properly  guard  the  embankment  for  the 
protection  of  the  passers-by  upon  the  highway  during  the  night  in 
question. 

The  discussion  of  the  doctrine  of  respondeat  superior  in  that  case 
was  an  exhaustive  one,  and,  indeed,  it  may  be  said  to  be  a  leading 
case  upon  that  subject,  for  it  has  been  cited  with  approval  many 
times  by  the  courts  of  this  state,  and  in  this  court  in  the  following, 
among  other  cases:  Pack  v.  Mayor  etc.,  of  N.  Y.  (8  N".  Y,  222) ; 
Kelly  V.  Mavor,  etc.,  of  N.  Y.  (11  N.  Y.  432,  433) ;  McCafferty  v. 
Spuyten  Duyvil  &  P.  M.  E.  E.  Co.  (61  N.  Y.  178) ;  Herrington  v. 
Village  of  Lansingburgh  (110  N".  Y.  145) ;  Charlock  v.  Freel  (125 
N.  Y.  357) ;  Butler  v.  Townsend  (126  N.  Y.  105)  ;  Berg  v.  Parsons 
(156  N.  Y.  109,  112) ;  Uppington  v.  .City  of  New  York  (165  N.  Y. 
222,  232). 

Eeference  will  be  made  to  all  of  these  cases  in  detail  later,  but  for 
the  present  I  pass  to  the  first  case  in  this  court  which  challenged  the 
correctness  of  the  decision  in  Blake  v.  Ferris  upon  the  ground  that  the 
doctrine  of  respondeat  superior  was  not  applicable  to  the  situation 
presented  in  that  case,  namely,  Storrs  v.  City  of  Utica  (17  N.  Y.  104). 
Judge  CoMSTOCK,  in  writing  the  opinion  in  that  case,  conceded  that 
the  opinion  in  Blake  v.  Ferris  contained  a  correct  exposition  of  the 


CHAP.   XVII.]  INDEPENDENT   CONTEACTOBS.  611 

doctrine  of  respondeat  superior,  in  which  view  this  court  has  to  this 
day  steadily  agreed,  but  he  contended  in  effect  that  the  doctrine  was 
not  applied  with  strict  accuracy  to  the  facts  in  Blake  v.  Ferris,  be- 
cause the  injury  did  not  result  from  negligence  in  the  actual  per- 
formance of  the  work,  that  is,  in  the  manner  in  which  the  work  was 
carried  on  by  the  laborers,  but  that  the  accident  was  the  result  of  the 
work  itself,  however  skilfully  performed.  He  said :  "  A  ditch  cannot 
be  dug  in  a  public  street  and  left  open  and  unguarded  at  night  with- 
out imminent  danger  of  such  casualties.  If  they  do  occur,  who  is  the 
author  of  the  mischief  ?  Is  it  not  he  who  causes  the  ditch  to  be  dug, 
whether  he  does  it  with  his  own  hands,  employs  laborers,  or  lets  it  out 
by  contract?  If  by  contract,  then  I  admit  that  the  contractor  must 
respond  to  third  persons  if  his  servants  or  laborers  are  negligent  in 
the  immediate  execution  of  the  work,  but  the  ultimate  superior  or 
proprietor  first  determines  that  the  excavation  shall  be  made,  and 
then  he  selects  his  own  contractor.  Can  he  escape  responsibility  for 
putting  a  public  street  in  a  condition  dangerous  for  travel  at  night 
by  interposing  the  contract  which  he  makes  as  made  for  the  very 
thing  which  creates  the  danger?  .  .  .  What  then  is  the  obligation 
of  a  city  corporation  when  it  undertakes  to  construct  a  sewer  in  a  pub- 
lic street  ?  Can  it  in  that  undertaking,  and  in  any  mode  of  providing 
for  the  execution  of  the  work,  throw  off  the  duty  in  question  and  the 
responsibilities  through  which  that  duty  is  to  be  enforced?  Al- 
though the  work  may  be  let  out  by  contract,  the  corporation  still  re- 
mains charged  with  the  care  and  control  of  the  street  in  which  the 
improvement  is  carried  on.  The  performance  of  the  work  necessarily 
renders  the  street  unsafe  for  night  travel.  This  is  a  result  which  does 
not  at  all  depend  upon  the  care  or  negligence  of  the  laborers  em- 
ployed by  the  contractor.  The  danger  arises  from  the  very  nature  of 
the  improvement,  and  if  it  can  be  averted  only  by  special  precautions, 
such  as  placing  guards  or  lighting  the  street,  the  corporation  which 
has  authorized  the  work  is  plainly  bound  to  take  these  precautions." 
The  reasoning  in  that  case  led  to  the  decision,  from  which  only  one 
member  of  the  court  dissented,  that  the  city  of  Utica,  because  it  owed 
to  the  public  the  duty  of  keeping  its  streets  in  a  safe  condition  for 
travel,  was  liable  to  plaintiff  for  the  injuries  received  owing  to  the 
neglect  to  keep  proper  lights  and  guards  around  an  excavation  which 
it  had  caused  to  be  made  by  an  independent  contractor. 

In  Brusso  v.  City  of  Buffalo  (90  N.  Y.  679)  the  plaintiff,  while 
attempting  to  cross  the  street  in  the  night  time,  fell  into  an  un- 
guarded excavation  and  received  injuries  for  which  the  jury  awarded 
him  damages.  One  of  the  defences  was  that,  while  the  excavation 
was  made  under  the  direction  of  a  department  of  the  city  government, 
the  performance  of  the  work  was  let  to  an  independent  contractor, 
and  the  city  denied  liability  for  his  failure  to  properly  guard  the 
excavation.    This  court  said,  Judge  Eabl  writing:    "The  city  was 


612  DEMING   V.    TERMINAL   BY.   OP   BUFFALO.       [CHAP.    XVII. 

under  an  absolute  duty  to  keep  its  streets  in  a  safe  condition  for 
public  travel,  and  was  bound  to  exercise  a  reasonable  diligence  and 
care  to  accomplish  that  end,  and  when  it  caused  the  excavation  to 
be  made  in  the  street  it  was  bound  to  see  that  it  was  carefully  guarded, 
so  as  to  be  reasonably  free  from  danger  to  travellers  upon  the  street. 
It  is  not  absolved  from  its  duty  and  its  responsibility  because  it 
employed  a  contractor  to  make  the  excavation.  This  is  settled 
by  a  long  line  of  decisions  in  this  and  several  other  states." 
(Citing  Storrs  v.  City  of  Utica,  supra,  and  authorities  from  other 
jurisdictions.) 

Vogel  V.  Mayor,  etc.,  of  N.  Y.  (92  N.  Y.  10),  presents  a  very  dif- 
ferent question  from  that  discussed  in  the  case  already  referred  to, 
for  there  the  injury  was  occasioned  to  plaintiffs  lands  by  the  accu- 
mulation of  surface  water  owing  to  the  excavations  in  the  street, 
which  were  made  under  a  contract  with  the  city  in  1858,  partly  per- 
formed and  abandoned  in  1859.  It  was  not  until  1873  that  the 
city  employed  another  person  to  complete  the  work,  and  the  city's 
liability  was  predicated  upon  the  ground  that  it  permitted  this  exca- 
vation to  remain  during  this  long  period  when  it  had  the  power 
and  right  to  take  charge  and  complete  the  work,  and  thus  protect 
the  plaintiffs  property  from  injury.  In  the  course  of  the  opinion, 
Blake  v.  Ferris  was  held  not  to  be  in  point,  and  the  court  referred 
with  approval  to  the  fact  that  that  case  was  criticized  and  questioned 
in  the  case  of  Storrs  v.  City  of  Utica  in  that  it  correctly  expounded 
but  improperly  applied  the  doctrine  of  respondeat  superior. 

In  Turner  v.  City  of  Newburgh  (109  N.  Y.  301)  the  city  had 
employed  a  contractor  to  do  certain  work  upon  a  sewer.  He  had 
completed  his  work  at  that  part  of  the  street  where  the  plaintiff  fell, 
owing  to  a  loosened  stone  which  had  been  undermined  by  recent 
rains,  leaving  it  insecure.  The  city  had  not  yet  accepted  the  work  of 
the  contractor,  although  the  street  was  open  at  that  point  for  public 
travel,  and  on  that  ground  it  denied  responsibility,  and  it  was  held, 
Judge  Gray  writing :  "  The  duty  of  the  city  to  keep  its  streets  in  safe 
condition  for  public  travel  is  absolute,  and  it  is  bound  to  exercise 
a  reasonable  diligence  and  care  to  accomplish  that  end,  and  in 
cases  like  the  present,  where  it  has  employed  a  contractor  to  do  work 
involving  excavation  on  its  streets,  it  is  not  absolved  from  its  duty 
and  responsibility."  (Citing  Storrs  v.  City  of  Utica  and  Brusso  v. 
City  of  Buffalo,  supra.) 

In  Pettengill  v.  City  of  Yonkers  (116  N.  Y.  558)  the  excavation 
in  the  street  which  occasioned  the  injury  to  the  plaintiff,  owing  to 
the  fact  that  it  was  not  properly  guarded  at  night,  was  made  by  a 
board  of  water  commissioners.  The  court  held  the  board  was  a  de- 
partment of  the  city  government,  and,  therefore,  that  case  did  not 
present  the  question  whether  the  city  would  have  been  liable  had 
the  work  been  done  by  an  independent  contractor.    In  the  course  of 


CHAP.   XVII.]  INDEPENDENT  CONTRACTORS.  613 

the  opinion,  however,  it  was  stated  that  "  a  municipality  is  not  ab- 
solved from  liability  because  the  injury  results  from  the  negligence 
of  a  contractor  with  the  city  who  by  his  contract  is  bound  to  properly 
guard  an  excavation  or  to  place  warning  lights."  (Citing  Turner  v. 
City  of  Newburgh,  supra,  and  other  cases.) 

These  cases,  as  we  have  seen,  recognize  the  principle  that  inasmuch 
as  a  municipality  owes  to  the  public  generally  the  duty  of  keeping 
the  streets  in  a  safe  condition  for  public  travel,  although  it  may  tem- 
porarily interfere  with  the  streets  for  the  public  good  by  constructing 
sewers  therein,  laying  water  mains  and  making  such  other  excava- 
tions from  time  to  time  as  the  public  needs  require,  it  still  owes  the 
public  the  duty  of  protecting  them  from  falling  or  driving  into 
such  excavations,  which  in  some  cases  can  only  be  performed  by  con- 
structing barriers  across  the  streets  to  prevent  their  use  by  the  public 
temporarily,  and  in  others  may  be  fully  accomplished  by  properly 
lighting  such  excavations  in  the  night  time,  and  otherwise  guarding 
them  so  as  to  permit,  without  danger  to  the  passer-by,  the  free  use  of 
that  portion  of  the  street  which  has  not  been  interfered  with.  And 
this  obligation  it  cannot  escape  by  letting  the  work  of  excavation  to 
an  independent  contractor,  although  it  is  legally  absolved  from  injur- 
ies resulting  from  the  negligent  acts  of  the  servants  of  the  contractor 
in  the  prosecution  of  the  work. 

Attention  will  now  be  given  to  (he  leading  cases  in  this  court, 
citing  Blake  v.  Ferris,  which  are  claimed  by  appellant's  counsel  to 
fully  sustain  that  case,  and  also  to  be  in  hostility  to  the  decision  in 
Storrs  V.  City  of  Utica. 

(The  court  then  discusses  the  following  cases:  Pack  v.  Mayor, 
8  N.  Y.  222 ;  Kelly  v.  Mayor,  11  N.  Y.  432 ;  McCafferty  v.  S.  D.  &  P. 
M.  R.  B.  Co.,  61  N.  Y.  178;  Herrington  v.  Lansingburgh,  110  N.  Y. 
145 ;  Charlock  v.  Freel,  125  N.  Y.  357 ;  Butler  v.  Townsend,  126 
N.  Y.  105;  Berg  v.  Parsons,  156  N.  Y.  109;  Uppington  v.  New 
York,  165  N.  Y.  222.) 

I  have  thus  called  attention  to  the  principal  authorities  relied  upon 
by  the  appellant  in  support  of  his  contention  that  Blake  v.  Ferris  is 
still  the  law  for  every  question  decided  by  it,  and  have  pointed  out 
the  fact  that  not  one  of  those  cases  presents  one  of  the  questions 
decided  by  the  Blake  case,  namely,  that  a  party  having  authority 
to  make  the  public  streets  dangerous  for  passers-by  may  be  relieved 
from  the  burden  of  guarding  the  place  of  danger  in  the  street  by 
letting  the  work  to  an  independent  contractor.  On  the  other  hand, 
it  has  been  observed  that  so  much  of  the  decision  in  Blake  v.  Ferris 
as  so  decided  was  distinctly  overruled  in  the  Storrs  case,  the  doctrine 
of  which,  in  that  respect,  has  since  been  followed  in  several  cases 
where  the  question  was  up  for  decision.  From  the  time  of  the 
decision  in  the  Storrs  case  until  now  this  court  has  consistently 
recognized  the  distinction  between  the  two  cases,  rightly  treating 


614  DEMING  V.   TEBMINiX   BY.   OP   BUFFALO.       [CHAP.   XVII. 

Blake  v.  Ferris  as  the  leading  case  so  far  as  it  involves  a  considera- 
tion of  the  general  principles  of  respondeat  superior,  and  the  Storrs 
case  as  establishing  that  such  rule  is  not  applicable  to  a  case  where 
the  injury  results  from  a  failure  on  the  part  of  the  municipality 
to  properly  guard  an  excavation  or  obstruction  authorized  by  it  in  a 
public  street  committed  to  its  care. 

Now,  dominion  over  the  highway  was,  by  the  operation  of  the 
statute,  upon  the  order  of  the  Supreme  Court,  for  the  purpose  of 
carrying  the  highway  over  the  railroad  tracks,  vested  in  the  defendant 
railroad  company,  which,  having  accepted  the  privileges  and  benefits 
conferred  upon  it  by  statute,  necessarily  took  with  them  all  the 
obligations  and  liabilities  in  respect  to  the  highway,  which  its  absolute 
dominion  over  it  for  the  purpose  of  carrying  it  across  the  railroad 
track  made  necessary,  among  which  was  the  duty  of  so  guarding  the 
obstructions  to  the  highway  which  were  made  under  its  direction 
as  to  save  passers-by  from  injury. 

The  judgment  should  be  aflBrmed,  with  costs. 

Gray,  O'Brien,  Haight,  Landon,  Cullen,  and  Werner,  JJ., 
concur.  Judgment  affirmed. 


CHAP.   XVIII.]  TEANSFEB  OP   SEKVICE.  615 


CHAPTEE   XVIII. 
Teansfee  of  Seevicb. 

DONOVAN  V.   LAING,   etc.,   SYNDICATE. 

[1893]  1  Q,  B.  (C.  A.)  629. 

Action  for  damages  for  personal  injury.  Appeal  from  a  judg- 
ment entered  for  defendants  by  the  trial  judge.  The  injury  to  plain- 
tiff was  due  to  the  negligence  of  one  Wand  who  was  operating  a 
crane  belonging  to  defendants  but  which,  with  the  man  (Wand)  to 
operate  it,  had  been  lent  to  Jones  &  Co. 

Lord  Esher,  M.  E.  In  this  case  the  plaintiff  brings  an  action, 
against  the  defendants  to  recover  damages  for  injuries  sustained 
through  the  negligent  act  of  a  man  who  is  said  to  have  been,  at  the 
time  of  committing  the  negligent  act,  a  servant  of  the  defendants, 
for  whose  negligence  the  defendants  are  liable.  The  facts  are  undis- 
puted. A  firm,  Messrs.  Jones  &  Co.,  were  engaged  in  loading  a 
ship  from  a  quay.  They  had  no  crane  which  they  could  use  for  that 
purpose;  but  the  defendants  had  one,  which  they  were  in  the  habit 
of  lending  out  with  a  man  in  charge  of  it.  On  this  occasion  they 
lent  the  crane,  with  the  man  in  charge,  to  Jones  &  Co.,  for  the  pur- 
pose of  assisting  in  loading  the  ship.  The  ordinary  mode  of  using 
a  crane  for  loading  a  ship  is  well  known.  The  goods  to  be  loaded 
are  fastened  to  the  chain  and  raised,  and  then  the  arm  of  the  crane 
is  swung  round,  so  as  to  bring  the  goods  over  the  part  of  the  ship 
where  they  are  to  be  placed,  which  is  determined  by  the  people 
who  have  the  control  of  the  loading.  How  far  the  crane  is  to  be 
swung,  and  how  much  the  chain  is  to  be  lowered,  depends  on  what 
part  of  the  ship  the  goods  are  to  be  placed  in,  and  every  act  in  connec- 
tion with  the  working  of  the  crane  must  be  done  according  to  the 
orders  of  those  who  are  directing  the  loading. 

In  this  case  the  crane  and  the  man  to  work  it  were  lent  by  the 
defendants  to  Jones  &  Co.,  for  a  consideration,  and  to  be  used  in  the 
manner  I  have  described.  For  some  purposes,  no  doubt,  the  man  was 
the  servant  of  the  defendants.  Probably,  if  he  had  let  the  crane  get 
out  of  order  by  his  neglect,  and  in  consequence  any  one  was  injured 
thereby,  the  defendants  might  be  liable ;  but  the  accident  in  this  case 
did  not  happen  from  that  cause,  but  from  the  manner  of  working  the 
crane.  The  man  was  bound  to  work  the  crane  according  to  the  orders 
and  under  the  entire  and  absolute  control  of  Jones  &  Co. 


616  DONOVAN    V.    LAING,   ETC.,   SYNDICATE.       [CHAP.   XVIII, 

That  being  so,  whose  servant  was  the  man  in  charge  of  the  crane 
as  to  the  working  of  it?  It  is  true  that  the  defendants  selected 
the  man  and  paid  his  wages,  and  these  are  circumstances  which,  if 
nothing  else  intervened,  would  be  strong  to  show  that  he  was  the 
servant  of  the  defendants.  So,  indeed,  he  was  as  to  a  great  man\' 
things;  but  as  to  the  working  of  the  crane  he  was  no  longer  their 
servant,  but  bound  to  work  under  the  orders  of  Jones  &  Co.,  and,  if 
they  saw  the  man  misconducting  himself  in  working  the  crane  or  dis- 
obeying their  orders,  they  would  have  a  right  to  discharge  him  from 
that  employment.  This  conclusion  hardly  requires  authority ;  but 
there  is  authority  for  it,  without  going  back  to  an  earlier  date,  in 
the  case  of  Kourke  v.  White  Moss  Colliery  Co.,  2  C.  P.  D.  205. 

There  one  of  the  questions  was,  whose  servant  a  man  called  Law- 
rence was.  He  was  the  general  servant  of  the  defendants,  but  he  was 
hired  out  to  another  person,  and  so  far  as  concerned  the  operation 
which  he  performed  for  that  person,  and  in  which  he  was  negligent, 
he  was  held  not  to  be  the  servant  of  the  defendants.  Cockburn,  C. 
J.,  in  that  case  said :  "  It  appears  to  me  that  the  defendants  put  the 
engine  and  this  man  Lawrence  at  Whittle's  disposal,  just  as  much 
as  if  they  had  lent  both  to  him.  But  when  one  person  lends  his  ser- 
vant to  another  for  a  particular  employment,  the  servant,  for  anything 
done  in  that  particular  employment,  must  be  dealt  with  as  the  ser- 
vant of  the  man  to  whom  he  is  lent,  although  he  remains  the  general 
servant  of  the  person  who  lent  him."  Nothing  can  be  clearer  than 
that.  The  man  was  the  servant  of  the  defendants;  but  he  was  lent 
to  Whittle,  and  was  negligent  in  the  operation  in  which  Whittle  em- 
ployed him,  and  he  was  held,  so  far  as  that  operation  was  concerned, 
to  be  in  the  employment  of  Whittle  who  had  the  control  of  the 
matter  on  which  he  was  engaged,  over  which  his  general  master  had 
no  control. 

The  passage  referred  to  from  the  judgment  of  Lord  Watson  in 
.Johnson  v.  Lindsay  &  Co.,  [1891]  A.  C.  371,  at  p.  382,  seems  to  me 
to  be  exactly  to  the  same  effect.  I  only  notice  the  case  of  Jones  v. 
Mayor  of  Liverpool,  14  Q.  B.  D.  890,  because  Grove,  J.,  seems  to 
have  thought  there  was  a  difference  between  the  cases  of  a  master 
lending  a  general  servant  for  a  consideration  and  lending  him  gratui- 
tously. It  seems  to  me  impossible  to  say  that  the  consideration  has 
anything  to  do  with  the  principle  on  which  the  servant  must  be  held 
to  be  in  the  employ  of  one  or  the  other.  In  the  present  case,  so  far 
as  the  working  of  the  crane  went  and  so  long  as  he  was  working  it,  the 
man  in  charge  was  the  servant  of  Jones  &  Co.,  and  was  not  the  servant 
of  the  defendants.    The  appeal  must  be  dismissed. 

BowEN,  L.  J.  .  .  .  The  principal  part  of  the  argument  for  the 
plaintiff  was  founded  on  what  may  be  called  the  carriage  cases: 
Laugher  v.  Pointer,  5  B.  &  C.  547,  and  Quarman  v.  Burnett,  6  M. 
&  W.  499 ;   but  they  really  have  nothing  to  do  with  the  point  pre- 


CHAP.    XVIII.]  TRANSFER   OF   SERVICE.  61? 

sented  in  this  appeal.  If  a  man  lets  out  a  carriage  on  hire  to  another, 
he  in  no  sense  places  the  coachman  under  the  control  of  the  hirer, 
except  that  the  latter  may  indicate  the  destination  to  which  he  wishes 
to  be  driven.  The  coachman  does  not  become  the  servant  of  the 
person  he  is  driving;  and  if  the  coachman  acts  wrongly,  the  hirer 
can  only  complain  to  the  owner  of  the  carriage.  If  the  hirer 
actively  interferes  with  the  driving,  and  injury  occurs  to  any  one, 
the  hirer  may  be  liable,  not  as  a  master,  but  as  the  procurer  and 
cause  of  the  wrongful  act  complained  of. 

In  the  present  case  the  defendants  parted  for  a  time  with  control 
over  the  work  of  the  man  in  charge  of  the  crane,  and  their  responsi- 
bility for  his  acts  ceased  for  a  time. 

I  have  only  to  add,  that  I  agree  that  no  difference  can  arise 
whether  the  lending  of  the  servant  to  another  person  is  in  considera- 
tion of  some  reward  or  not.  Such  a  distinction  obviously  cannot 
affect  the  reasoning  on  which  I  have  based  my  judgment. 

LiNDLEY,  L.  J.,  concurs.  Appeal  dismissed. 


JONES   V.    SCULLARD. 

[1898]  2  Q.  B.  565. 

Action  for  damages  for  negligent  driving.  It  appeared  that  the 
brougham,  the  horse,  the  harness,  and  the  suit  of  livery  which  the 
driver  was  wearing  were  the  property  of  the  defendant;  but  the 
driver,  a  man  named  Loveday,  was  a  coachman  in  the  employment 
of  a  livery-stable  keeper  named  Walker,  at  whose  stable  the  defend- 
ant kept  the  brougham  and  horse.  The  defendant  had  kept  his  horses 
and  carriage  at  livery  at  Walker's  stable  since  January  3,  1897.  He 
first  began  to  be  driven  by  Loveday  on  May  10 ;  but  from  that  date 
down  to  the  time  of  the  accident  Loveday  invariably  drove  for  him. 
After  Loveday  had  driven  for  him  a  short  time,  between  May  24  and 
May  31,  the  defendant  supplied  him  with  a  suit  of  livery  which  he 
was  wearing  at  the  time  of  the  accident.  The  particular  horse  which 
caused  the  accident  had  only  been  recently  purchased  by  the  defend- 
ant in  the  country,  and  was  first  brought  up  to  London  on  June  14, 
between  which  date  and  June  22  it  was  driven  by  Loveday  at  most 
some  three  or  four  times. 

Lord  Russell  of  Killowen,  C.  J.  .  .  .  What  control  had  the 
livery-stable  keeper  over  the  driver  while  driving  the  defendant's 
horse?  Absolutely  none.  The  whole  control  was  in  the  defendant, 
who  could  have  ordered  the  driver  to  go  fast  or  slow,  or  stop  or 
go  on,  just  as  he  pleased,  or  to  keep  the  horse  without  food,  or 
otherwise  manage  the  horse  as  he  directed.  .  .  .  The  principle, 
then,  to  be  extracted  from  the  cases  is  that,  if  the  hirer  simply  ap- 


618  DRISCOLL  V.   TOWLE.  [CHAP.   XVIII. 

plies  to  the  livery-stable  keeper  to  drive  him  between  certain  points 
or  for  a  certain  period  of  time,  and  the  latter  supplies  all  necessary 
for  that  purpose,  the  hirer  is  in  no  sense  responsible  for  any  negli- 
gence on  the  part  of  the  driver.  But  it  seems  to  me  to  be  altogether 
a  different  case  where  the  brougham,  the  horse,  the  harness,  and 
the  livery  are  the  property  of  the  person  hiring  the  services  of  the 
driver.  And  in  such  a  case,  especially  if,  as  here,  the  driver  has 
driven  the  hirer  for  a  considerable  period  of  time  and  been  approved 
by  him,  and  the  horse  is  one  the  characteristics  or  peculiarities  of 
which  neither  the  livery-stable  keeper  nor  his  driver  have  had  any 
practical  opportunity  of  becoming  acquainted  with,  there  is,  it  seems 
to  me,  evidence  upon  which  a  jury  would  be  justified  in  coming  to 
the  conclusion  that  the  driver  was  upon  the  occasion  in  question 
acting  as  the  servant,  not  of  the  livery-stable  keeper,  but  of  the 
person  who  hired  him.  I  have  come  to  that  conclusion.  There 
must  be  Judgment  for  the  plaintiff. 


DEISCOLL   V.    TOWLE. 

181  Mass.  416.     1902. 

Holmes,  C.  J.  This  is  an  action  for  personal  injuries  caused 
by  the  plaintiff's  being  struck  in  the  street  by  a  horse  or  wagon 
driven  by  one  Keenan.  At  the  trial  the  judge  directed  a  verdict 
for  the  defendant,  and  the  plaintiff  excepted.  The  only  question 
is  whether  there  was  any  evidence  that  Keenan  was  the  defendant's 
servant. 

The  defendant  "  was  engaged  in  general  teaming  business  in  Bos- 
ton." He  owned  the  horse  and  wagon,  and  employed  Keenan  and 
paid  him  his  wages.  Keenan's  only  contract  of  employment  was 
with  him.  For  some  time,  however,  Keenan  had  been  carrying 
property  for  the  Boston  Electric  Light  Company,  under  some  arrange- 
ment between  the  latter  and  the  defendant.  The  general  course  of 
business,  or  at  least  that  adopted  on  the  day  of  the  accident,  was 
this.  Early  in  the  morning  Keenan  took  the  horse  and  wagon  from 
the  defendant's  stables  and  reported  to  the  electric  light  company. 
An  employee  of  that  company  would  give  him  his  orders  as  to  what 
to  do  and  where  to  go,  and  he  spent  the  day  in  carrying  these  orders 
out.  Sometimes  he  would  help  pull  up  arms  on  the  poles,  or  pull  up 
machinery,  and  the  like.  In  driving,  if  he  was  directed  to  drive 
fast,  he  would  drive  fast,  and  if  told  that  he  had  time  enough,  he 
would  take  his  time,  but  he  chose  his  own  route  and  had  exclusive 
management  of  his  horse.  At  night  he  returned  to  the  defendant's 
stables.  He  harnessed  and  unharnessed  the  horse,  and  fed  it  at  noon. 
At  the  moment  of  the  accident  he  was  going  to  get  some  arms  in 


CHAP.   XVUI.]  TRANSFER   OF   SERVICE.  619 

pursuance  of  an  order  from  the  foreman  of  the  electric  light 
company. 

We  are  of  the  opinion  that  these  facts  are  at  least  evidence  that 
Keenan  was  the  defendant's  servant. 

It  is  true,  of  course,  that  a  person  admitted  to  be  in  the  general 
employment  of  one  may  be  lent  to  another  (with  his  own  consent, 
Delaware,  Lackawanna  &  Western  Railroad  v.  Hardy,  30  Vroom,  35), 
in  such  a  way  as  to  become  the  servant  of  that  other  for  the  occasion 
or  for  the  time.  Many  cases  have  been  decided  on  this  ground. 
They  generally  depend  upon  the  nature  of  the  contract  or  arrange- 
ment, express  or  implied,  between  the  general  master  and  the  third 
person.  Linnehan  v.  Eollins,  137  Mass.  123;  Hasty  v.  Sears,  157 
Mass.  123;  Coughlan  v.  Cambridge,  166  Mass.  268,  277,  278; 
Samuelian  v.  American  Tool  &  Machine  Co.,  168  Mass.  12 ;  Donovan 
V.  Laing,  Wharton  &  Down  Construction  Syndicate,  [1893]  1  Q.  B. 
629 ;  Rourke  v.  White  Moss  Colliery  Co.,  2  C.  P.  D.  205 ;  Higgins  v. 
Western  Union  Telegraph  Co.,  156  N.  Y.  75.  But  the  mere  fact 
that  a  servant  is  sent  to  do  work  pointed  out  to  him  by  a  person 
who  has  made  a  bargain  with  his  master  does  not  make  him  that 
person's  servant.  More  than  that  is  necessary  to  take  him  out  of 
the  relation  established  by  the  only  contract  which  he  has  made  and 
to  make  him  a  voluntary  subject  of  a  new  sovereign,  —  as  the  master 
sometimes  was  called  in  the  old  books.  Dutton  v.  Amesbury  National 
Bank,  181  Mass.  154. 

In  this  case  the  contract  between  the  defendant  and  the  electric 
light  company  was  not  stated  in  terms,  but  it  fairly  could  have  been 
found  to  have  been  an  ordinary  contract  by  the  defendant  to  do  his 
regular  business  by  his  servants  in  the  common  way.  In  all  probabil- 
ity it  was  nothing  more.  Of  course  in  such  cases  the  party  who 
employs  the  contractor  indicates  the  work  to  be  done  and  in  that 
sense  controls  the  servant,  as  he  would  control  the  contractor  if  he 
were  present.  But  the  person  who  receives  such  orders  is  not  sub- 
ject to  the  general  orders  of  the  party  who  gives  them.  He  does 
his  own  business  in  his  own  way,  and  the  orders  which  he  receives 
simply  point  out  to  him  the  work  which  he  or  his  master  has  under- 
taken to  do.  There  is  not  that  degree  of  intimacy  and  generality  in 
the  subjection  of  one  to  the  other  which  is  necessary  in  order  to 
identify  the  two  and  to  make  the  employer  liable  under  the  fiction 
that  the  act  of  the  employed  is  his  act. 

Of  course  the  chances  are  that  some  orders  will  be  given  which 
are  not  strictly  within  the  contract  of  the  master.  That  is  to  be 
expected  from  the  relative  positions  of  the  servant  and  the  other 
party.  If  the  latter  has  something  that  he  wants  done  and  sees  a 
working  man  at  hand,  he  is  likely  to  ask  him  to  do  it,  and  if  it  ia 
within  the  penumbra  of  his  business  the  servant  is  likely  to  obey. 
While  he  thus  goes  outside  his  master's  undertaking  and  his  own 


620  MURRAY    V.   DWIGHT.  [CHAP.   XVIIL 

contract  with  his  master,  he  ceases  to  represent  him.  Brown  v.  Jarvis 
Engineering  Co.,  166  Mass.  75,  and  he  may  make  the  other  liable  for 
his  acts,  Kimball  v.  Cushman,  103  Mass.  194,  but  he  does  not  on 
that  account  become  the  servant  of  the  master's  contractee  for  all 
purposes,  or  when  he  returns  to  the  w^ork  which  his  master  has  agreed 
to  perform.  The  fact  that  Keenan  sometimes  gave  help  outside  of 
loading  or  unloading  his  wagon  could  not  be  more  than  evidence,  if 
it  is  that,  of  an  arrangement  giving  the  company  more  than  ordinary 
control  over  him.  At  the  most  it  was  for  the  consideration  of  the 
jury  and  did  not  justify  directing  a  verdict  for  the  defendant  as 
matter  of  law.  Preston  v.  Knight,  120  Mass.  5;  Jones  v.  Scullard, 
[1898]  2  Q.  B.  565. 

In  cases  like  the  present,  there  is  a  general  consensus  of  authority 
that,  although  a  driver  may  be  ordered  by  those  who  have  dealt  with 
his  master  to  go  to  this  place  or  that,  to  take  this  or  that  burden,  to 
hurry  or  to  take  his  time,  nevertheless  in  respect  to  the  manner  of  his 
driving  and  the  control  of  his  horse  he  remains  subject  to  no  orders 
but  those  of  the  man  who  pays  him.  Therefore  he  can  make  no  one 
else  liable  if  he  negligently  runs  a  person  down  in  the  street.  Huff  v. 
Ford,  126  Mass.  24;  Keagan  v.  Casey,  160  Mass.  374,  379;  Jones  v. 
Liverpool,  14  Q.  B.  D.  890;  Waldock  v.  Winfield,  [1901]  2  K.  B. 
596;  Quarman  v.  Burnett,  6  M.  &  W.  499;  Laugher  v.  Pointer, 
5  B.  &  C.  574,  558 ;  Murray  v.  Dwight,  161  N.  Y.  301 ;  Lewis  v. 
Long  Island  Railroad,  162  N.  Y.  52,  66 ;  New  York,  Lake  Erie  & 
Western  Eailroad  v.  Steinbrenner,  18  Vroom,  161;  Joslin  v.  Grand 
Eapids  Ice  Co.,  50  Mich.  516 ;  Little  v.  Hackett,  116  U.  S.  366. 

Exceptions  sustained. 


MURRAY   V.   DWIGHT. 

161  N.  Y.  301.     1900. 

Appeal  from  an  order  of  the  Appellate  Division  in  the  third  judi- 
cial department,  reversing  a  judgment  in  favor  of  defendant,  entered 
upon  a  dismissal  of  the  complaint  at  a  Trial  Term,  and  granting  a 
new  trial. 

O'Brien,  J.  The  plaintiff,  a  young  man  about  twenty  years  of 
age,  received  a  personal  injury  from  the  falling  of  a  pulley  block  at 
the  defendant's  warehouse  on  the  24th  day  of  March,  1894.  The  evi- 
dence tended  to  show  that  the  block  fell  by  reason  of  the  negligence 
of  the  defendant's  general  employees,  or  some  of  them,  and  the  ques- 
-  tion  presented  at  the  trial  was  whether  the  plaintiff  was  a  co-servant 
with  them  within  the  rule  that  relieves  employers  from  liability  in 
cases  of  accidents  of  this  character.  The  trial  court  held  that  the 
plaintiff  was  a  co-servant  of  the  person  whose  negligence  caused 


CHAP.   XVIII.]  TRANSFER  OF   SERVICE.  621 

the  injury,  and  the  complaint  was  dismissed.  On  appeal  to  the 
Appellate  Division  this  judgment  was  reversed  and  a  new  trial 
granted,  and  in  this  condition  the  case  comes  here. 

The  opinion  of  the  learned  court  below  contains  a  clear  and  concise 
statement  of  the  facts  concerning  the  accident,  the  substance  of  which 
we  may  safely  adopt.  The  defendant  was  the  owner  of  a  warehouse 
in  which  there  was  a  hoisting  apparatus  for  the  purpose  of  hoisting 
and  lowering  heavy  articles  from  one  story  to  another.  There  is  a 
projection  at  the  roof  in  which  there  is  an  iron  wheel  over  which 
a  chain  passes  down  in  front  of  tlie  building  and  about  a  foot  and  a 
half  therefrom.  This  chain  at  the  roof  passes  into  the  building 
and  around  a  drum  and  thence  to  the  back  part  of  the  building.  An 
endless  rope  is  attached  to  the  drum,  by  means  of  which  a  man  in 
the  building  may  operate  it  and  hoist  or  lower  the  chain  outside.  If 
it  is  desired  to  use  horse  power  in  hoisting,  a  pulley  block  is  attached 
to  the  door-post  in  the  lower  story  and  another  pulley  block  with 
tackle  is  hooked  on  the  chain  and  drawn  up  to  the  top  of  the  building. 
A  rope  connected  with  the  upper  block  passes  down  and  over  the 
lower  pulley  and  thence  into  the  building,  and  to  this  a  horse  is 
attached.  In  operating  the  tackle  the  horse  moves  foi'ward  and  back- 
ward within  the  building. 

The  plaintiff  was  the  servant  of  a  truckman  and  was  sent  by  his 
master  with  a  horse  to  hoist  at  the  defendant's  warehouse.  The 
goods  to  be  moved  from  the  first  to  a  higher  floor  in  the  warehouse 
were  barrels  of  lime.  The  plaintiff,  on  arriving  at  the  warehouse 
with  his  horse,  stopped  near  the  curbstone  in  front  of  the  door  while 
other  men  ia  the  employ  of  the  defendant  were  putting  in  place  the 
pulley  blocks  and  tackle.  The  upper  pulley  block  was  hooked  on  to 
the  chain  and  was  being  drawn  up  to  its  place  by  one  of  the  men 
operating  the  drum  inside.  When  the  block  was  nearly  up  the  plain- 
tiff was  told  to  go  in,  and  as  he  started  to  do  so,  the  block  fell 
upon  the  plaintiff.  He  had  not  worked  there  before  and,  as  the  testi- 
mony tended  to  show,  knew  nothing  about  the  apparatus  for  hoisting. 
He  had  nothing  to  do  with  placing  it  in  position.  The  horse  belonged 
to  the  truckman,  the  plaintiff's  master,  and  the  plaintiff  was  paid 
by  him.  The  work  of  moving  the  barrels  of  lime  from  the  lower 
to  a  higher  story  was  under  the  direction  of  the  defendant's  foreman. 

The  question  when  and  under  what  circumstances  the  servant  of  a 
general  master  becomes  the  servant  of  another  is  often  difficult  of 
solution.  There  is  some  apparent  conflict  in  the  authorities,  due 
more  to  the  difficulty  of  applying  the  legal  principle  to  ever-varying 
facts  than  to  any  discord  with  respect  to  the  principle  itself.  More- 
over, the  rule  is  subject  to  some  distinctions  that  are  not  always 
easy  to  state  in  such  a  way  as  to  render  the  results  in  every  case  so 
plain  as  to  command  acquiescense,  or  to  give  to  the  decision  the  char- 
acter of  a  conclusive  authority.    Counsel  upon  both  sides  have,  in  the 


622  MURRAY   V.   DWIGHT.  [CHAP.    XVIII. 

argument  of  this  case  before  us,  subjected  the  leading  authorities 
to  a  very  careful  and  able  examination  that  has  thrown  so  much  light 
upon  the  question  that  we  have  been  greatly  aided  in  arriving  at  what 
appears  to  us  to  be  the  proper  conclusion.  We  think  the  judgment  of 
reversal  in  the  court  below  is  correct.  The  opinion  of  Judge  Merwin 
contains  such  a  clear  statement  of  the  law  as  deduced  from  the  nu- 
merous cases,  and  such  a  judicious  application  of  it  to  the  facts,  that 
we  would  not  attempt  to  add  anything  to  his  reasoning  but  for  the 
fact  that  the  learned  counsel  for  the  defendant  has  attempted  to 
prove  by  an  argument,  which  bears  all  the  marks  of  industry  and 
discrimination,  that  it  is  in  conflict  with  two  or  three  recent  cases  in 
this  court.  Before  referring  to  these  cases,  it  may  not  be  amiss  to 
point  out  a  feature  of  the  controversy  peculiar  to  this  case  and  which 
distinguishes  it  from  many,  if  not  all  of  those  cited. 

The  relation  of  master  and  servant  is  often  confused  with  some 
other  relation.  The  mere  fact  that  one  person  renders  some  service 
to  another  for  compensation,  express  or  implied,  does  not  necessarily 
create  the  legal  relation  of  master  and  servant.  There  are  many 
kinds  of  employment  which  are  peculiar  and  special,  where  one 
person  may  render  service  to  another  without  becoming  his  servant 
in  the  legal  sense.  A  servant  is  one  who  is  employed  to  render  per- 
sonal services  to  his  employer  otherwise  than  in  the  pursuit  of  an 
independent  calling.  The  truckman  who  transports  the  traveller's 
baggage  or  the  merchant's  goods  to  the  railroad  station,  though  hired 
and  paid  for  the  service  by  the  owner  of  the  baggage  or  the  goods, 
is  not  the  servant  of  the  person  who  thus  employs  him.  He  is  exercis- 
ing an  independent  and  quasi  public  employment  in  the  nature  of  a 
common  carrier,  and  his  customers,  whether  few  or  many,  are  not 
generally  responsible  for  his  negligent  or  wrongful  acts,  as  they  may 
be  for  those  of  other  persons  in  their  regular  employment  as  servants. 
A  contract,  whether  express  or  implied,  under  which  such  special 
jobs  are  done  or  such  special  services  rendered,  is  not  that  of  master 
and  servant  within  the  law  of  negligence.  (Jackson  A.  Iron  Works 
V.  Hurlbut,  158  N.  Y.  34;   1  Parsons  on  Contracts,  101-109.) 

The  plaintiff  beyond  all  doubt  was  in  the  general  service  of  the 
truckman  and  so  was  his  general  servant.  In  that  capacity  he 
represented  his  master  and,  hence,  was  a  truckman  himself.  In  the 
pursuit  of  that  calling  he  was  directed  by  his  master  to  render 
special  services  to  the  defendant,  not  in  moving  goods  from  the  store 
or  warehouse  to  a  place  of  shipment,  but  from  the  lower  floor  of  the 
warehouse  to  an  upper  floor.  It  so  happened  that  in  this  particular 
job  it  was  not  necessary  to  use  the  truck,  but  it  was  necessary  to  use 
the  horse  in  order  to  furnish  power  to  hoist  the  goods.  Neither 
the  time,  nor  duration  of  employment,  nor  the  rate  of  compensation, 
was  the  subject  of  any  express  contract  with  the  defendant,  and  from 
the  nature  of  the  case  there  could  not  well  have  been  any  weU-defined 


CHAP.   XVIII.]  TRANSFER  OF   SERVICE.  623 

agreement  on  the  subject.  The  employment  in  its  scope  and  character 
was  in  no  respect  essentially  different  from  that  which  every  truck- 
man enters  into  with  his  numerous  customers  in  the  course  of  a  day 
as  a  carrier  of  baggage  or  goods.  The  fact  that  the  plaintiff  detached 
the  truck  and  performed  the  job  with  a  horse  alone  did  not  change 
the  character  of  the  employment,  nor  the  legal  relation  that  exists 
between  an  ordinary  truckman  and  his  customers.  The  goods  were 
moved,  it  is  true,  not  by  the  truck,  but  by  another  contrivance,  and 
the  plaintiff's  duty  was  to  manage  and  guide  the  horse,  which  was 
the  real  power  behind  the  pulleys  and  tackle,  as  it  would  have  been 
when  hitched  to  the  truck.  In  this  capacity  the  plaintiff  repre- 
sented his  general  master,  the  truckman,  and  was  all  the  time  his 
servant,  and  did  not  become  in  any  legal  sense  the  servant  of  the 
defendant  any  more  than  he  would  if  employed  to  move  the  goods  to  a 
railroad  station  on  the  truck,  and  if  not  such  servant  he  could  not, 
of  course,  have  become  the  co-servant  of  the  defendant's  regular 
workmen. 

The  recent  cases  in  this  court  cited  by  the  learned  counsel  for  the 
defendant,  and  to  which  we  will  now  briefly  refer,  differ  widely  from 
this  in  the  nature  of  the  employment  and  in  the  legal  relations  held 
by  the  person  guilty  of  the  wrong  or  negligent  act  and  the  party 
sought  to  be  charged  with  its  consequences. 

In  Wyllie  v.  Palmer  (137  N.  Y.  248)  the  defendant  sold  fireworks 
to  an  organized  committee  in  a  city  for  the  purpose  of  a  celebration. 
They  agreed  to,  and  did,  send  to  the  committee  at  its  own  expense 
a  competent  man,  who  was  their  general  servant,  to  set  off  these 
fireworks  under  the  direction  of  the  committee,  and  this  man  brought 
with  him  a  boy,  also  in  the  general  service  of  the  defendants,  as  a 
helper.-  In  the  course  of  the  display  the  committee  virtually  separ- 
ated the  boy  from  the  control  of  the  man  and  set  him  at  firing 
rockets,  a  work  which  he  was  not  competent  to  do  and  which  neither 
his  general  master  nor  the  man  intended  that  he  should  do.  One  of 
these  rockets  was  discharged  into  a  crowd  through  his  negligence, 
and  the  plaintiff,  a  bystander,  was  injured.  This  court  held  that  if 
his  negligent  act  was  to  be  imputed  to  any  third  party  it  should  be 
imputed  to  the  committee  giving  the  order  to  the  boy  to  do  something 
for  which  he  was  incompetent,  rather  than  to  his  general  master 
who  was  not  present  and  who  had  sent  him  there  for  a  different 
purpose. 

In  Higgins  v.  W.  U.  T.  Co.  (156  N.  Y.  75)  the  plaintiff  was  injured 
by  the  negligent  act  of  a  person  operating  an  elevator  and  who  was 
the  general  servant  of  the  defendant.  The  plaintiff  was  the  servant 
of  the  contractor  for  the  repair  of  the  building,  including  the  furnish- 
ing of  the  elevator  itself.  The  contractor  had  placed  the  elevators  in 
the  building  some  time  before  the  accident  and  they  were  in  use  at 
times  by  the  defendant  to  carry  passengers  and  by  the  contractor  for 


624  MURRAY   V.   DWIGHT.  [CHAP.   XVIII. 

purposes  of  his  own.  But  he  had  not  completed  the  contract  and  had 
not  turned  over  the  building,  with  the  elevators,  to  the  defendant. 
They  were  still,  for  all  practical  purposes,  under  the  control  of  the 
contractor,  who  had  a  right  to  use  them  for  the  purpose  of  carrying 
materials  and  workmen  from  the  lower  to  the  higher  floors.  The 
plaintiff's  master  wanted  to  use  the  elevator  on  the  day  of  the  acci- 
dent as  a  platform  upon  which  to  stand  while  plastering  the  shaft 
in  which  it  had  been  placed,  and  procured  the  defendant's  general 
servant  to  operate  it  by  moving  it  up  and  down  through  the  shaft 
for  the  convenience  of  the  plaintiff  engaged  in  the  work  of  plastering. 
The  injury  to  the  plaintiff  occurred  while  the  elevator  was  being  used 
for  this  purpose,  and,  as  the  proof  tended  to  show,  by  the  negligent 
act  of  the  operator.  This  court  held  that  the  operator,  at  the  time 
of  the  accident,  was  not  engaged  in  his  general  master's  work,  but  was 
acting  under  the  orders  of  the  plaintiff  and  in  a  different  capacity. 
It  is  apparent,  I  think,  that  the  plaintiff  in  that  case  occupied  a 
different  relation  to  the  person  moving  the  elevator  than  he  would 
had  the  injury  occurred  while  being  conveyed  as  a  passenger  in  the 
elevator  to  his  place  of  duty  on  an  upper  floor,  and  while  the  elevator 
was  being  used  as  a  passenger  elevator,  and  while  it  was  in  law  the 
defendant's  elevator  and  in  charge  and  control  of  its  servants. 

In  Mclnerney  v.  D.  &  H.  C.  Co.  (151  N".  Y.  411)  the  question  that 
we  are  now  concerned  with  was  not  involved,  as  will  be  seen  by  the 
opinion,  which  expressly  disclaims  any  intention  to  deal  with  the 
question  whether  the  plaintiff  in  that  case  was  injured  by.  the  act 
of  a  fellow  servant.  So  we  think  that  the  case  at  bar  is  not  gov- 
erned by  these  decisions,  since  there  is  a  material  difference  in  the 
facts,  as  we  have  attempted  to  point  out. 

The  judgment  of  the  court  below  should,  therefore,  be  affirmed, 
and  judgment  absolute  ordered  for  the  plaintiff,  with  costs. 

Gray,  J.  (dissenting).  While  it  is  true  that  a  variance  in  the  facts 
of  a  case  of  negligence  may  vary  the  application  of  established  rules, 
courts  should  aim  at  consistency  and,  where  the  facts  do  not  mate- 
rially differ,  apply  them  strictly.  This  case,  in  my  opinion,  falls 
clearly  within  certain  recent  authoritative  decisions  in  this  state; 
as  it  does  within  recent  decisions  in  Massachusetts  and  in  England. 

A  general  principle  of  the  law  of  master  and  servant  is  that, 
among  the  risks  which  the  employee  assumes  upon  entering  an  em- 
ployment, is  that  of  injury  caused  by  the  negligence  of  his  fellow 
servants,  engaged  in  the  same  employment.  Where  one  servant  is 
injured  by  the  negligence  of  a  fellow  servant,  the  master,  if  the  neg- 
ligence was  with  respect  to  a  duty  pertaining  to  a  workman  and  not 
to  some  duty  owing  from  the  master,  is  not  liable  for  the  injury. 
(Crispin  v.  Babbitt,  81  N.  Y.  522.) 

The  facts  of  this  case  are  clear  and  undisputed.  The  defendant 
dealt  in  building  materials  and  owned  two  warehouses,  into  and  from 


CHAP.   XVin.]  TRANSFER  OF  SERVICE.  625 

which  it  was  frequently  necessary  that  the  materials  should  be 
hoisted,  or  lowered.  Hoisting  tackle,  made  fast  to  chains  running 
through  the  upper  part  of  the  warehouses  and  over  a  drum  within 
them,  was  used  upon  these  occasions.  The  drum  was  worked  by  an 
endless  rope  in  the  hands  of  a  man  within  the  building  and,  as  it 
was  made  to  revolve,  caused  the  chain  to  descend  to  the  street,  or 
to  be  pulled  up,  as  it  was  required.  To  the  end  of  the  chain  was 
attached  the  hoisting  tackle  and,  when  it  was  necessary  to  hoist 
materials,  the  chain  was  pulled  up  and  ropes,  running  over  pulleys 
upon  the  tackle,  fell  down  and  passed  over  a  pulley  fastened  at 
the  entrance  to  the  warehouse.  A  horse  would  be  attached  to  one 
of  the  ropes  and,  as  he  was  driven  forwards  or  backwards,  within 
the  basement  of  the  warehouse,  the  article  would  be  hoisted  up,  or 
lowered.  A  foreman  of  the  defendant  supervised  the  workmen,  when 
engaged  in  the  work  of  hoisting  articles  in  or  out,  and  it  was  cus- 
tomary, at  the  time,  to  employ  a  man  and  horse  to  aid  them.  The 
plaintiff  was  in  the  general  employment  of  a  truckman,  named 
McManus,  who  was  not  usually  resorted  to  by  the  defendant  for 
this  assistance;  but,  upon  this  occasion,  he  was  applied  to  and  the 
plaintiff  was  sent  with  a  horse,  as  he  says,  "  to  hoist  at  Dwight's," 
meaning  the  defendant.  He  went  to  one  of  the  defendant's  ware- 
houses and,  under  the  directions  of  the  latter's  foreman,  in  common 
with  the  other  employees  upon  the  premises,  took  part  in  the  work 
of  hoisting  up  barrels  of  lime  into  the  lofts,  by  driving  the  horse 
forwards  or  backwards  in  the  basement,  as  he  was  bidden.  After 
the  hoisting  was  completed  at  that  warehouse,  he,  with  the  other 
men,  went  off  to  do  similar  work  at  the  other  warehouse  near  by. 
Until  the  hoisting  tackle  was  made  fast  and  the  chain  drawn  up, 
preparatory  to  the  hoisting  of  the  barrels,  the  plaintiff,  instead  of 
going  within  the  building,  remained  outside,  upon  the  street  and 
under  the  tackle.  Owing  to  the  carelessness  of  one  of  the  men, 
who  was  stationed  in  the  doorway  to  signal  another  man,  who 
was  operating  the  drum  through  the  endless  rope,  the  hoisting 
tackle  was  allowed  to  strike  with  force  against  the  wheel,  or  frame, 
over  which  the  iron  chain  passed  and,  breaking  thereby,  fell  upon 
and  caused  the  injuries  to  the  plaintiff  for  which  this  action  was 
brought. 

I  had  supposed  that  the  principles  of  law,  which  were  applicable 
to  the  facts  of  such  a  case,  and  which  were  to  determine  the  relative 
rights  of  the  plaintiff  and  defendant,  were  well  settled  by  recent 
cases  and  that  their  doctrine  was  well  applied  by  the  learned  trial 
judge,  when  he  dismissed  the  plaintiff's  complaint.  The  question  is, 
was  the  plaintiff,  while  engaged  with  the  defendant's  servants  in 
doing  the  work  described,  for  the  time  being,  in  the  service  of  the 
defendant?  That  he  was,  and  that  he  was  in  nowise  acting  inde- 
pendently in  the  matter,  or  as  a  stranger  to  the  defendant,  seems  to 

40 


626  MUEBAY   V.   DWIGHT.  [CHAP.   XVIII. 

me  to  be  a  very  plain  proposition,  in  view  of  what  this  court  and 
other  courts  have  laid  down  as  guiding  principles.  If  I  read  these 
cases  right,  they  sustain  the  doctrine  that  one  who  is  the  servant  of 
the  general  master  may,  if  employed  elsewhere  temporarily,  ad  hoc, 
become  the  servant  of  the  special  master  and  it  is  of  no  consequence 
whether  he  is  loaned  for  the  purpose,  or  whether  he  is  hired,  not 
directly,  but  through  his  general  master.  If  the  particular  employ- 
ment subjects  him  to  the  directions  and  orders  of  another  than  hia 
general  master,  he  ceases  to  be  the  latter's  servant  for  the  time; 
whose  responsibility  for  his  acts,  also,  ceases.  (Wyllie  v.  Palmer,  137 
N.  Y.  248;  Mclnemey  v.  J).  &  H.  C.  Co.,  151  ib.  411;  Higgins  v. 
W.  U.  Tel.  Co.,  156  ib.  75;  Hasty  v.  Sears,  157  Mass.  123;  Donovan 
17.  Laing,  L.  E.  [1  Q.  B.  Div.]  629;  Kourke  v.  Colliery  Co.,  L.  E. 
[2  C.  P.]  205.)  In  the  case  of  Higgins  v.  Western  Union  Tele- 
graph Company  (supra),  this  court  passed  upon  a  state  of  facts 
which  cannot  be  distinguished,  in  the  principle  of  the  decision,  from 
those  in  the  case  before  us.  The  telegraph  company  had  contracted 
with  a  contractor  to  restore  its  building  and  to  replace  the  elevators 
within  it.  Before  the  completion  of  the  contract,  the  contractor  was 
making  use  of  the  elevator  as  a  platform  upon  which  the  plaintiff, 
one  of  his  men,  might  stand  in  doing  some  plastering  upon  the  shaft. 
It  was  necessary  to  move  the  elevator  up  and  down  for  the  work 
to  be  done  and  the  contractor,  instead  of  making  use  of  one  of  his 
own  men,  procured  from  the  defendant  one  of  the  men  in  its  regular 
service  for  the  purpose  of  running  the  elevator.  The  defendant  was 
using  the  elevator  for  the  purpose  of  carrying  passengers  up  and 
down  during  portions  of  the  day;  but,  on  the  day  of  the  accident 
in  question,  the  elevator  ceased  carr}dng  passengers  about  noon  and 
after  that  time  was  made  use  of  by  the  contractor  for  the  rest  of 
the  day.  The  conductor  of  the  elevator  was  negligent  and  allowed 
the  car  to  start  up  without  signal  from,  or  warning  to,  the  plaintiff, 
who  was  at  work  upon  it,  with  the  result  of  causing  serious  injury 
to  the  latter.  The  judgment,  which  the  plaintiff  had  recovered 
below,  was  reversed  here,  upon  the  theory  that  the  relation  of  master 
and  servant  between  the  conductor  of  the  elevator  and  the  defendant 
was  suspended  during  the  time  he  was  doing  the  work  for  the  con- 
tractor, in  moving  the  plaintiff  up  and  down  in  the  shaft.  In  the 
opinion,  which  was  delivered  by  my  brother  O'Brien,  who  now  differs 
with  me  in  his  view  of  this  case,  the  question  of  the  responsibility 
of  the  defendant  for  the  negligence  of  its  servant  was  carefully  con- 
sidered in  the  light  of  the  authorities  in  this  state  and  in  England, 
and  the  principles  there  laid  down  seem  to  me  to  be  strictly  apposite 
to  the  discussion  here.  It  was  observed  that  there  was  no  question 
with  respect  to  the  fact  that  the  conductor  of  the  elevator,  whose 
negligence  caused  the  accident,  was  in  the  general  service  and  pay  of 
the  defendant;    but  the  question  was  whether,  at  the  time  of  the 


CHAP.  XVIII.3  TRANSFEB  OP  SERVICE.  627 

accident,  he  was  engaged  in  doing  the  defendant's  work,  or  the  work 
of  the  contractor,  and  that,  as  he  was  not  at  the  time  taking  any 
orders  from  the  defendant,  but  was  directed  by  the  contractor's  ser- 
vant in  moving  the  elevator  up  and  down,  he  became  the  servant 
of  the  contractor,  engaged  for  the  time  being  in  doing  his  work  and 
subject  to  his  orders.  The  general  proposition  was  advanced  that 
servants  who  are  employed  and  paid  by  one  person  may,  neverthe- 
less, be  ad  hoc  the  servants  of  another  in  a  particular  transaction 
and  that,  too,  when  their  general  employer  is  interested  in  the  work. 
He  quotes  the  remark  of  Lord  Cockburn,  in  Rourke  v.  White  Moss 
Colliery  Co.  (supra),  that,  "when  one  person  lends  his  servant  to 
another  for  a  particular  employment,  the  servant,  for  anything  done 
in  that  particular  employment,  must  be  dealt  with  as  the  servant  of 
the  man  to  whom  he  is  lent,  although  he  remains  the  general  ser- 
vant of  the  person  who  lent  him."  The  conclusion  that  was  reached 
by  Judge  O'Brien,  that  the  conductor  of  the  elevator  had  become, 
at  the  time,  the  servant  of  the  contractor,  fits  exactly  the  facts  of  this 
case;  inasmuch  as  this  plaintiff,  like  the  conductor  of  the  elevator, 
was,  for  the  time  being,  engaged  in  the  employment  of  another  than 
his  general  employer  in  the  common  work  which  was  being  done 
and,  therefore,  was  the  servant  of  the  defendant.  If  we  apply  the 
test,  which  was  believed  in  the  Higgins  case  to  be  the  true  one  in 
such  cases,  namely:  who  directs  the  movements  of  those  who  are 
engaged  in  the  work,  we  see  that  the  plaintiff  was,  in  the  perform- 
ance of  his  work,  at  the  time,  solely  under  the  direction  of  the  de- 
fendant, or  his  foreman.  As  cases  supporting  and  justifying  his 
conclusions,  Judge  O'Brien,  very  properly,  relied  upon  Wyllie  v. 
Palmer  (supra)  and  Mclnerney  v.  D.  &  H.  C.  Co.  (supra),  which 
illustrated  how  the  servant  of  a  general  employer  may  be,  for  a 
particular  emplo}Tnent,  the  servant  of  another  and  dealt  with  ac- 
cordingly. In  the  Wyllie  case,  the  defendants,  with  whom  a  con- 
tract had  been  made  to  furnish  fireworks  for  an  exhibition  in  the 
city  of  Auburn,  sent  with  the  articles  contracted  for  two  of  their 
servants  to  render  aid  in  the  exhibition.  An  accident  occurred,  due 
to  the  negligence  of  one  of  these  servants,  while  obeying  an  order  of 
a  member  of  the  committee  having  in  charge,  for  the  city,  the  exhi- 
bition of  the  fireworks,  and  the  plaintiff  was  injured.  He  sued  the 
contractors  to  recover  for  the  injury  inflicted  by  their  servant's 
carelessness;  but  a  judgment  of  nonsuit  was  affirmed  in  this  court, 
upon  the  ground  that  the  plaintiff  was  not  engaged  in  the  defendants' 
business  at  the  time,  but  was  a  servant  of  the  committee.  In  the 
Mclnerney  Case  the  defendant  railroad  company  had  furnished  an 
engine  and  a  crew,  which  Willard,  an  owner  of  a  lumber  yard,  had 
requested  for  the  purpose  of  moving  cars,  which  were  being  loaded 
in  his  yard.  When  they  arrived  at  his  yard,  Willard  assumed  direc- 
tion and  ordered  the  moving  of  the  engine,  until  the  cars  were  all 


628  MURRAY   V.   DWIGHT.  [CHAP.   XVIII. 

attached,  which  were  to  be  moved  out.  The  plaintiff  was  one  of 
Willard's  servants  and  upon  the  occasion  in  question,  not  having 
been  warned  by  any  one,  was  caught  between  two  cars  and  injured, 
by  the  backing  down  of  the  engine.  He  brought  an  action  against 
the  railroad  company,  and  a  judgment  of  nonsuit  was  affirmed 
in  this  court,  upon  the  theory  that  the  crew  of  the  engine  were 
under  Willard's  orders;  who  was  held  to  be,  as  to  them,  as  well 
as  to  his  own  men  who  were  engaged  in  the  work,  their  common 
master. 

If  Higgins  and  the  conductor  of  the  elevator  were  fellow  servants 
under  the  contractor,  although  the  telegraph  company  had  merely 
loaned  the  conductor,  was  not  this  plaintiff  quite  as  much  a  fellow- 
servant  with  the  employees  of  this  defendant  ?  If  Mclnerney  and  the 
crew  of  the  railroad  engine  were  fellow  servants  while  doing  the 
work  of  moving  cars  in  Willard's  yard,  although  the  railroad  com- 
pany had  furnished  its  own  men  to  operate  the  engine,  how  can  it 
be  fairly  said  that  this  plaintiff  was  not  a  fellow  servant  with  the 
defendant's  employees? 

The  doctrine  laid  down  by  the  Supreme  Court  of  Massachusetts, 
in  Hasty  v.  Sears  (supra),  is  exactly  applicable.  There  the  plaintiff, 
who  was  a  carpenter  in  the  employ  of  N".  &  Co.,  was  sent  by  them 
to  do  some  work  for  the  defendant  upon  his  building.  The  defend- 
ant's superintendent  directed  him  to  do  work  upon  the  elevator  shaft. 
The  conductor  of  the  elevator  had  received  orders  not  to  run  down 
below  the  second  floor,  until  the  plaintiff  had  finished  his  work.  He 
disobeyed  the  order  and,  in  consequence,  the  plaintiff  received  in- 
juries, for  which  he  sued  the  defendant,  who  was  the  owner  of  the 
building.^  It  was  held  that  he  and  the  elevator  conductor  were  both 
servants  of  the  defendant  at  the  time  of  the  injury  and,  as  their 
employment  was  a  common  employment,  the  negligence  of  the  con- 
ductor was  an  obvious  risk  which  the  plaintiff  assumed  and  for 
which  the  defendant  was  not  answerable  to  him. 

The  English  cases  fully  recognize  the  rule  that  a  man  may  be  a 
general  servant  of  one  person  and  yet,  at  the  same  time,  be  the  ser- 
vant of  another  in  relation  to  a  particular  matter.  They  hold  that 
the  important  element,  in  determining  whose  servant  for  the  time 
being  he  is,  is,  which  of  the  two  persons  had  the  control  of  him  in 
the  conduct  of  the  particular  business.  (Jones  v.  Scullard,  L.  R. 
[1898],  2  Q.  B.  Div.  565;  Donovan  v.  Laing,  L.  R.  [1893],  1  Q.  B. 
Div.  629).  In  Donovan  v.  Laing,  we  find  a  situation  which  is  not  to 
be  distinguished  from  the  one  in  the  present  case.  .  .  .  Whether, 
therefore,  we  regard  the  recent  authorities  in  this  state,  or  in  Massa- 
chusetts, or  in  England,  we  find  the  doctrine  to  be  well  settled,  that 
one  who  is  the  general  servant  of  a  master,  who  employs  and  pays 
him,  may,  nevertheless,  become  the  servant  of  another  in  a  special 
employment  and  that  it  is  immaterial  that  he  does  not  enter  the 


CHAP.   XVin.]  TRANSFER  OP   SERVICE.  629 

Bpecial  employment  by  any  direct  hiring,  or  contract.  In  the 
Higgins  Case,  the  telegraph  company  loaned  its  servant  to  the  con- 
tractor, and  in  other  cases,  from  our  and  from  other  courts,  pay- 
ment for  the  services  of  the  servants  was  made  to  their  general 
master. 

The  plaintiff  in  this  case  was  as  much  in  the  defendant's  employ- 
ment and  under  his  direction  and  orders,  as  though  the  latter  has 
engaged  him,  individually,  to  come  in  and  assist  in  the  work  which 
was  to  be  done  in  his  building.  That  the  plaintiff  was  in  the  general 
employment  of  a  truckman,  having  an  independent  business,  cannot, 
possibly,  affect  the  question  of  the  relation  which  he  bore  towards 
the  defendant,  or  the  servants  of  the  defendant,  when  he  entered  upon 
the  performance  of  the  particular  work  under  the  directions  of  the 
latter,  or  his  foreman.  In  all  the  cases,  the  existence  of  the  relation 
of  fellow  servants,  between  the  plaintiffs  and  those  from  whose  neg- 
ligence their  injuries  were  received,  depended  upon  the  sole  question 
of  whether,  at  the  time,  they  were  under  the  direction  and  control  of 
the  temporary  employer  in  performing  the  special  work  for  which 
they  were  loaned,  or  contracted  for.  In  no  essential  respect  can  the^ 
position  of  this  plaintiff  be  regarded  as  differing,  essentially,  from 
that  in  any  one  of  the  cases  referred  to ;  where  the  plaintiffs,  though 
in  the  service  of  a  general  master,  were  held,  for  the  time  being,  to 
become  the  servants  of  other  masters.  Of  course,  cases  of  independ- 
ent contractors,  where  the  contracts  of  the  parties  have  fixed  their 
relative  obligations,  including  the  furnishing  of  men  and  defining 
their  duties,  are,  mostly,  inapplicable. 

Nor  do  I  consider  it  to  be  any  answer  to  the  proposition,  that  the 
plaintiff  was  injured  by  the  act  of  a  fellow  servant  and,  therefore, 
cannot  hold  the  defendant  liable,  that,  at  the  particular  moment 
when  the  accident  happened,  the  plaintiff  was  not  at  work.  His 
engagement  was  "to  hoist"  at  the  defendant's  warehouses  and  his 
employment  in  that  respect  was  continuous  from  the  time  when  he 
reported  for  duty.  The  preliminary  work  of  hoisting  the  tackle, 
which  was  necessary  to  be  done  at  the  second  building  before  the 
plaintiff  could  go  on  with  his  part  of  the  work,  was  being  done  by 
the  defendant's  servants  with  whom  he  was  engaged  in  the  same 
employment,  namely:  to  hoist  bags  of  lime  from  the  street  into  the 
upper  lofts  of  the  warehouses.  He  was  as  much,  at  the  time,  under 
the  control  and  direction  of  the  defendant,  or  his  foreman,  as  he  had 
been  at  any  time  during  the  day.  If  the  defendant  did  not  direct 
him  to  take  part  in  the  hoisting  up  of  the  tackle,  that  was  a  mere 
matter  of  the  division  of  labor  and  it  seems  to  me  to  be  the  purest 
kind  of  technical  reasoning  to  say  that,  because  at  the  moment  the 
plaintiff  was  at  rest  and  not  actually  driving  his  horse  to  and  fro, 
or  helping  in  getting  up  the  tackle,  he  was,  therefore,  withdrawn, 
pro  ianto  from  the  defendant's  employment. 


630  MURRAY  V.  DWIQHT.  [CHAP.  XVni. 

I  think  that  the  judgment  of  nonsuit  at  the  Circuit  was  correct, 
and  in  accordance  with  the  principles  of  the  adjudged  cases. 

All  concur  with   O'Brien,  J.,  for  afl&rmance,  except  Parker, 
Ch.  J.,  not  sitting,  and  Gray,  J.,  who  reads  dissenting  opinion. 

Order  affirmed,  etc. 


CHAP.  XIX.]      COMPULSOEY  EMPLOYMENT  OR  SEB7ICB.  631 


CHAPTER   XIX. 
Compulsory  Employment  or  Service. 

HOMER   RAMSDELL   TRANSPORTATION   COMPANY  v. 
LA   COMPAGNIE   GENERALE   TRANSATLANTIQUE. 

182  U.  S.  406.    1901. 

Action  at  law  for  damages  caused  to  plaintiff's  pier  by  defendant's 
steamship.  The  steamship  was  in  charge  of  a  Sandy  Hook  pilot 
licensed  under  the  laws  of  the  state  of  New  York  and  the  collision 
was  due  solely  to  his  negligence.    Judgment  for  defendants. 

The  Circuit  Court  of  Appeals  certified  to  the  Supreme  Court  the 
questions  whether  the  New  York  State  pilotage  statutes  impose  com- 
pulsory pilotage  and  whether  in  an  action  at  common  law  a  ship- 
owner is  liable  for  injuries  inflicted  exclusively  by  the  negligence 
of  a  pilot  accepted  by  the  vessel  compulsorily. 

Mr.  Justice  Gray  (after  deciding  that  the  New  York  statutes 
impose  compulsory  pilotage). 

This  action  is  at  common  law.  It  is  not,  and,  being  for  damages 
inflicted  on  land,  could  not  be,  in  admiralty.  The  Plymouth  (1865), 
3  Wall.  20.  At  common  law,  no  action  can  be  maintained  against 
the  owner  of  a  vessel  for  the  fault  of  a  compulsory  pilot.  [Citing 
and  discussing  Carruthers  v.  Sydebotham  (1815),  4  M.  &  S.  77,  85; 
Attorney-General  v.  Case  (1816),  3  Price,  302,  322;  The  Maria 
(1839),  1  W.  Rob.  95,  106;  Lucey  v.  Ingram  (1840),  6  M.  &  W. 
302,  315;  The  Halley  (1868),  L.  R.  2  P.  C.  193,  201.] 

There  is  no  occasion  to  refer  further  to  the  English  cases  in  ad- 
miralty, because  in  England  it  is  held  that  the  ship  is  not  responsible 
in  admiralty,  where  the  owner  would  not  be  at  common  law,  differ- 
ing in  that  respect  from  our  own  decisions.  The  China,  7  Wall.  53 ; 
Ralli  V.  Troop  (1894),  157  U.  S.  386,  402,  420;  The  John  G. 
Stevens  (1898),  170  U.  S.  113,  120-122;  The  Barnstable  (1901), 
181  U.  S.  464. 

In  The  China,  aflfirming  the  decision  of  the  circuit  court  in  ad- 
miralty, the  liability  of  a  vessel  in  rem  for  a  collision  from  the  fault 
of  a  compulsory  pilot  was  put  upon  the  maritime  law,  the  court  say- 
ing :  "  The  maritime  law  as  to  the  position  and  powers  of  the  master, 
and  the  responsibility  of  the  vessel,  is  not  derived  from  the  civil 
law  of  master  and  servant,  nor  from  the  common  law."  "  According 
to  the  admiralty  law,  the  collision  impresses  upon  the  wrongdoing 


632  EAMSDELL   TR.    CO.   V.   LA    C«     G^N.,   ETC.       [CHAP.    XIX. 

vessel  a  maritime  lien.  This  the  vessel  carries  with  it  into  whoseso- 
ever hands  it  may  come.  It  is  inchoate  at  the  moment  of  the  wrong, 
and  must  be  perfected  by  subsequent  proceedings."  "The  proposi- 
tion of  the  appellants  would  blot  out  this  important  feature  of  the 
maritime  code,  and  greatly  impair  the  efficacy  of  the  system.  The 
appellees  are  seeking  the  fruit  of  their  lien."     7  Wall.  68. 

Such  was  the  view  of  that  case  taken  by  the  whole  court  in  Balli 
V.  Troop,  in  which  the  majority  of  the  judges  said  of  it:  "That 
decision  proceeded,  not  upon  any  authority  or  agency  of  the  pilot, 
derived  from  the  civil  law  of  master  and  servant,  or  from  the  common 
law,  as  the  representative  of  the  owners  of  the  ship  and  cargo"; 
*'but  upon  a  distinct  principle  of  maritime  law,  namely,  that  the 
vessel  in  whosesoever  hands  she  lawfully  is,  is  herself  considered  as 
the  wrongdoer  liable  for  the  tort,  and  subject  to  a  maritime  lien  for 
the  damages."  157  U.  S.  402.  And  the  dissenting  judges  said  that 
in  The  China  "  this  court  held,  contrary  to  the  English,  but  con- 
formably to  the  continental  authorities,  that  a  vessel  was  liable  for 
the  consequences  of  a  collision  through  the  negligence  of  a  pilot 
taken  compulsorily  on  board,  although  it  was  admitted  that,  if  the 
action  had  been  at  common  law  against  the  owner,  and  probably  also 
in  personam  in  admiralty,  there  could  have  been  no  recovery,  as  a 
compulsory  pilot  is  in  no  sense  the  agent  or  servant  of  the  owner." 
157  U.  S.  423. 

In  none  of  the  cases  in  which  actions  at  law  have  been  maintained 
against  the  owner  of  a  ship  for  the  fault  of  a  pilot  was  the  owner 
compelled  to  employ  the  pilot.  [Citing  and  discussing  Bussy  v. 
Donaldson  (1800),  4  Dall.  194;  Cooley  v.  Board  of  Wardens  (1851), 
12  How.  299;  Flanigen  v.  Washington  Ins.  Co.  (1847),  7  Penn.  St., 
306,  312;  The  Creole  (1853),  2  Wall.  Jr.,  485,  516,  517;  William- 
son V.  Price  (1826),  4  Martin  (n.  s.)  399;  The  Merrimac  (1871), 
14  Wall.  199,  203;  Yates  v.  Brown  (1829),  8  Pick.  22;  Martin  v. 
Hilton  (1845),  9  Met.  371,  373;  Denison  v.  Seymour  (1832),  9 
Wend.  1;  Atlee  v.  Packet  Co.  (1874),  21  Wall.  389;  Sherlock  v. 
Ailing  (1876),  93  U.  S.  99.] 

The  liability  of  the  owner  at  common  law  for  the  act  of  a  pilot 
on  his  vessel  is  well  stated  by  Mr.  Justice  Story  in  his  Treatise  on 
Agency  (2d  ed.),  §  456a:  "The  master  of  a  ship,  and  the  owner 
also,  is  liable  for  any  injury  done  by  the  negligence  of  the  crew  em- 
ployed in  the  ship.  The  same  doctrine  will  apply  to  the  case  of  a 
pilot,  employed  by  the  master  or  owner,  by  whose  negligence  any 
injury  happens  to  a  third  person  or  his  property;  as,  for  example, 
by  a  collision  with  another  ship,  occasioned  by  his  negligence.  And 
it  will  make  no  difference  in  the  case,  that  the  pilot,  if  any  is  em- 
ployed, is  required  to  be  a  licensed  pilot;  provided  the  master  is 
at  liberty  to  take  a  pilot,  or  not,  at  his  pleasure ;  for,  in  such  a  case, 
the  master  acts  voluntary,  although  he  is  necessarily  required  to  select 


CHAP.   XIX.]      COMPULSOEY   EMPLOYMENT  OR  SERVICE.  633 

from  a  particular  class.  On  the  other  hand,  if  it  is  compulsive  upon 
the  master  to  take  a  pilot,  and,  a  fortiori,  if  he  is  bound  to  do  so 
under  a  penalty,  then,  and  in  such  case,  neither  he,  nor  the  owner, 
will  be  liable  for  injuries  occasioned  by  the  negligence  of  a  pilot; 
for,  in  such  a  case,  the  pilot  cannot  be  deemed  properly  the  servant 
of  the  master  or  the  owner,  but  is  forced  upon  them,  and  the  maxim. 
Qui  facit  per  aliam  facit  per  se,  does  not  apply." 

The  answer  to  the  second  question  must  therefore  be  that  in  an 
action  at  common  law  the  shipowner  is  not  liable  for  injuries  in- 
flicted exclusively  by  negligence  of  a  pilot  accepted  by  a  vessel 
eompulsorily. 

Answer  to  the  first  question  in  the  affirmative;  to  the  second  in 
the  negatived 


BOSWELL   V.   BAENHART. 

96  Ga.  521.     1895. 

Simmons,  C.  J.  Louise  Bamhart  sued  Boswell  for  damages  for  the 
homicide  of  her  husband,  who,  she  alleged,  had  been  convicted  of  a 
misdemeanor,  and  sentenced  to  labor  in  the  chain  gang,  and  while 
in  the  charge  of  Boswell,  who  for  private  gain  had  established  a  con- 
vict camp,  had  been  subjected  to  cruel  treatment,  exposure,  neglect,, 
excessive  and  unreasonable  tasks,  etc.,  by  reason  of  which  he  died. 
There  was  a  verdict  for  the  plaintiff  for  $750,  and  the  defendant 
made  a  motion  for  a  new  trial,  which  was  overruled,  and  he 
excepted.  ... 

It  is  complained  that  the  court  erred  in  charging :  "  If  the 
deceased  worked  under  the  direction  of  one  Culbertson,  as  the  em- 
ployee of  defendant,  then  the  acts  of  Culbertson,  while  acting  in 
behalf  of  defendant,  and  within  the  scope  of  his  employment,  would 
be,  in  law,  the  acts  of  the  defendant,  and  he,  the  defendant,  would 
be  liable  therefor  to  the  plaintiff,  if  they  were  wrongful  acts,  and 
resulted  in  injury  to  Barnhart,  and  caused  his  death,  provided  the 
death  of  Barnhart  resulted  in  pecuniary  damage  and  loss  to  the 
plaintiff,  and  provided,  further,  such  acts  were  sued  on  and  set  out 
in  the  declaration."  It  was  contended  that  Culbertson  and  the  de- 
ceased were  fellow  servants,  and,  consequently,  there  could  be  no 

•  "  It  Is  a  matter  of  dispute  between  the  parties  as  to  whose  agent  the  pilot 
was,  the  libellant  contending  that  the  respondent  should  be  liable  for  his  negli- 
gence. At  common  law  no  action  can  be  maintained  against  the  owner  of  a  vessel 
for  the  fault  of  a  compulsory  pilot  —  Homer  Ramsdell  Co.  v.  Comp.  Gen.  Trans., 
182  U.  S.  406,  21  Sup.  Ct.  831,  45  L.  Ed.  1155  —  and  it  does  not  appear  how  an 
action  in  personam  in  admiralty  differs  in  principle,  there  being  no  question  of  a 
fault  of  the  ship  or  of  a  lien  upon  her.  Even,  therefore,  if  the  pilot  was  the  re- 
spondent's agent,  his  negligence  is  not  imputable  to  It  and  the  responsibility  for  the 
loss  is  to  be  determined  by  the  agreement  of  the  parties,  as  expressed  in  the  charter 
party."     Crisp  v.  United  States  &  Australasia  S.  S.  Co.,  124  Fed.  748,  749. 


634  BOS  WELL   V,   BARNHART.  [CHAP.   XIX. 

recovery  of  the  master  for  the  wrongful  acts  of  Culbertson.  There 
is  no  merit  in  this  contention.  Where  the  service  is  made  compulsor}' 
by  law,  the  relation  of  fellow  servant  does  not  exist.  See  McKinney, 
Fellow  Serv.  §  20;  Smith  v.  Steele,  33  Law  T.  (n.  s.)  195.  The 
ground  upon  which  a  master  is  relieved  from  liability  to  a  servant 
for  injuries  resulting  from  the  negligence  of  a  fellow  servant  is  that 
the  servant,  when  he  enters  the  employment  of  the  master,  impliedly 
contracts  to  assume  the  risk  of  such  negligence,  as  one  of  the  risks 
incident  to  the  service,  and  that  his  compensation  is  fixed  with  ref- 
erence to  this;  and,  clearly,  this  reason  cannot  apply  in  the  case 
of  one  not  voluntarily  in  the  service,  but  merely  a  prisoner,  serving 
out  his  sentence  for  a  violation  of  the  law.  Indeed,  it  can  hardly  be 
seriously  contended  that  a  chain-gang  "  boss  "  is  in  any  sense  a  fellow 
servant  of  a  prisoner  working  under  him.  The  "  boss,"  while  acting 
in  that  capacity,  is  the  alter  ego  of  his  employer,  and  the  latter  is 
responsible  for  any  wrongful  or  negligent  acts  on  the  part  of  such 
employee  by  which  a  prisoner  is  deprived  of  his  life.  .  .  . 

Judgment  affirmed. 


CHAP.  XX.]  SUB-SEEVANTS  AND  VOLUNTEERS.  635 


CHAPTER    XX. 
Sub-Servants  and  Volunteers. 

HALUPTZOK  V.   GREAT   NORTHERN   RAILWAY 
COMPANY. 

55  Minn.  446.     1893. 

Action  for  damages  for  personal  injuries.  Judgment  for  plaintiff. 
Defendant  appeals  from  an  order  denying  its  motion  for  a  new  trial. 

Mitchell,  J.  The  plaintiff  brought  this  action  to  recover  for 
personal  injuries  to  his  infant  child,  caused  by  the  negligence  of  the 
alleged  servant  of  the  defendant.    1878  G.  S.  ch.  %&,  §  34. 

The  injuries  were  inflicted  by  one  O'Connell,  and  the  only  ques- 
tion presented  by  this  appeal  is  whether  O'Connell  was  defendant's 
servant.  The  evidence,  in  which  there  is  no  material  conflict,  is 
substantially  as  follows:  The  defendant  maintained  a  public  depot 
and  freight  and  passenger  station  at  the  village  of  Waverly.  The 
premises  were  owned  and  controlled  by  the  defendant,  but  the  Great 
Northern  Express  Co.  and  the  Western  Union  Telegraph  Co.  had 
their  offices  in  the  same  building,  one  Westinghouse  being  the  com- 
mon agent  for  all  three  companies.  Westinghouse  had  exclusive 
charge  of  all  the  defendant's  business  at  the  station.  He  testified 
that  he  had  no  authority  to  employ  any  assistants,  such  authority 
being  exclusively  vested  in  the  general  officers  of  the  company ;  and, 
as  respects  express  authority,  this  testimony  is  not  contradicted.  For 
a  year  or  more  before  the  injury  complained  of,  Westinghouse  had 
permitted  a  young  man  named  Foutch  to  use  and  practise  on  the 
instruments  in  the  office,  for  the  purpose  of  learning  telegraphy; 
and  during  that  time  Foutch  had  been  in  the  habit,  as  occasion  re- 
quired, of  assisting  Westinghouse  in  the  performance  of  his  railway 
duties,  such  as  selling  tickets,  handling  freight,  putting  out  switch 
lights,  etc.  He  had  no  contract  with  the  railway  company,  and 
received  no  wages;  the  work  he  did  evidently  being  in  return  for 
the  privilege  of  the  office,  and  the  use  of  the  instruments,  in  learning 
telegraphy.  There  is  no  evidence  that  the  general  officers  of  the 
defendant  knew  of  or  assented  to  Foutch's  performing  this  work, 
except  the  length  of  time  it  had  continued,  and  the  absence  of  any 
testimony  that  they  ever  objected.  About  ten  days  before  the  acci- 
dent, Westinghouse,  with  the  permission  of  the  Western  Union  Tele- 
graph Co.,  gave  O'Connell  the  privilege  of  the  office,  and  the  use  of 


636  HALUPTZOK   V.   GREAT   NORTHERN    RY.    CO.  [CHAP.   XX. 

the  instmineiits,  for  the  purpose  of  learning  telegraphy,  evidently 
under  substantially  the  same  arrangement  by  which  he  had  previ- 
ously given  Foutch  similar  privileges.  O'Connell  had  no  contract 
with  the  defendant,  and  received  no  wages.  The  time  between  his 
coming  into  the  office  and  the  date  of  the  accident  was  so  brief  that 
the  evidence  is  very  meagre  as  to  his  doing  railroad  work  about  the 
station  during  that  time,  but  there  was  evidence  tending  to  show  that 
he  had  on  several  occasions,  with  the  knowledge  and  consent  of 
Westinghouse,  handled  freight.  On  the  day  in  question,  he  went 
to  work,  with  a  truck,  to  move  some  goods  from  the  station  platform 
into  a  freight  room.  Foutch  assisted  him  by  piling  up  the  goods  in 
the  room  while  O'Connell  carried  them  in.  While  thus  handling  the 
truck,  O'Connell  ran  it  against  plaintiff's  child,  who  was  walking 
around  the  depot,  and  inflicted  the  injury  complained  of.  There  is 
no  evidence  that  at  or  prior  to  the  accident  the  general  officers  of 
the  defendant  knew  that  O'Connell  was  employed  about  the  station. 
But  both  Foutch  and  O'Connell,  aft^r  the  accident,  continued  at  the 
depot,  practising  telegraphy,  and  assisting  Westinghouse,  as  before, 
in  selling  tickets,  handling  freight,  etc.,  and  were  still  doing  so  at 
the  date  of  the  trial,  which  was  five  months  after  the  accident,  and 
over  four  months  after  the  commencement  of  this  action ;  and,  while 
there  is  no  direct  evidence  that  this  was  with  the  knowledge  of  the 
general  officers  of  the  defendant,  there  is  no  evidence  that  they  did 
not  know  of  it,  and  none  that  they  ever  objected  to  it.  Such  we 
believe  to  be  a  fair  and  full  statement  of  the  effect  of  the  evidence. 

Under  the  doctrine  of  respondeat  superior,  a  master,  however  care- 
ful in  the  selection  of  his  servants,  is  responsible  to  strangers  for 
their  negligence  committed  in  the  course  of  their  employment.  The 
doctrine  is  at  best  somewhat  severe,  and,  if  a  man  is  to  be  held  liable 
for  the  acts  of  his  servants,  he  certainly  should  have  the  exclusive 
right  to  determine  who  they  shall  be.  Hence,  we  think,  in  every 
well-considered  case  where  a  person  has  been  held  liable,  under  the 
doctrine  referred  to,  for  the  negligence  of  another,  that  other  was 
engaged  in  his  service  either  by  the  defendant  personally,  or  by  others 
by  his  authority,  express  or  implied.  There  is  a  class  of  cases,  of 
which  Bush  v.  Steinman,  1  Bos.  &  P.  404  (often  doubted  and  criti- 
cised), is  an  example,  which  seems  to  hold  that  a  person  may  be 
liable  for  the  negligence  of  another,  not  his  servant.  But  these  were 
generally  cases  where  the  injury  was  done  by  a  contractor,  sub- 
contractor, or  their  servants,  upon  the  real  estate  of  the  defendant,^ 
of  which  he  was  in  possession  and  control ;  and  they  seem  to  proceed 
upon  the  theory  that,  where  a  man  is  in  possession  of  fixed  property, 
he  must  take  care  that  it  is  so  used  and  managed  by  those  whom 
he  brings  upon  the  premises  as  not  to  be  dangerous  to  others.  In 
that  view,  he  is  held  liable,  not  for  the  negligence  of  another,  but 
for  his  own  personal  negligence  in  not  preventing  or  abating  a  nui- 


CHAP.   XX.]  SUB-SERVAXTS  AND  VOLUN^TEEBS.  637 

sauce  on  his  own  premises.  See  Lougher  v.  Pointer,  5  Barn.  &  C.  547. 
There  will  also  be  found  in  some  text-books  statements  to  the  effect 
that  where  a  servant  is  employed  to  do  a  particular  piece  of  work, 
and  he  employs  another  person  to  assist  him,  the  master  is  liable 
for  the  acts  of  the  person  so  employed,  as  much  as  for  the  acts  of 
the  servant  himself.  Thus  generally  stated,  without  qualification, 
the  proposition  is  misleading,  as  well  as  inaccurate. 

The  cases  most  generally  cited  in  support  of  it  are  Booth  v.  Mister, 
7  Car.  &  P.  66,  and  Althorf  v.  Wolfe,  32  N.  Y.  355.  In  Booth  v. 
Mister  the  defendant's  servant,  whose  duty  it  was  to  drive  his  mas- 
ter's cart,  was  riding  in  the  cart,  but  had  given  the  reins  to  another 
person,  who  was  riding  with  him,  but  was  not  in  the  master's  em- 
ployment, and  through  the  negligent  management  of  this  other 
person  the  plaintiff  was  injured.  The  defendant  was  held  liable, 
not  for  the  mere  negligence  of  such  other  person,  but  for  the  negli- 
gence of  the  servant  himself,  who  was  riding  in  the  cart,  and  either 
actively  or  passively  controlling  and  directing  the  driving,  as  much 
as  if  he  had  held  the  reins  in  his  own  hands. 

In  Althorf  v.  Wolfe,  a  servant,  having  been  directed  to  remove 
snow  from  the  roof  of  his  master's  house,  secured  the  services  of  a 
friend  to  assist  him;  and  while  the  two  were  engaged  together  in 
throwing  the  snow  from  the  roof  into  the  street,  a  passer-by  was 
struck  and  killed.  It  was  held  that  it  was  immaterial  which  of  the 
two  threw  the  ice  or  snow  which  caused  the  injury;  that  in  either 
case  the  master  was  liable.  The  case  is  a  very  unsatisfactory  one, 
and  it  is  very  difficult  to  ascertain  the  precise  ground  upon  which  it 
was  decided.  Wright,  J.,  seems  to  put  it  on  one  or  all  of  three 
grounds:  (1)  That  the  servant  had  implied  authority  to  procure 
assistance;  (2)  that  defendant's  family,  who  were  left  in  charge  of 
the  house,  ratified  the  act  of  the  servant;  and  (3)  upon  the  same 
ground  upon  which  Booth  v.  Mister  was  decided.  On  the  other  hand, 
Denio,  J.,  seems  to  place  his  opinion  upon  the  ground  upon  which 
we  have  suggested  that  Bush  v.  Steinman  proceeds.  It  is  also  to 
be  observed  that  two  of  the  justices  dissented.  But  neither  of  these 
cases,  if  rightly  understood,  is  in  conflict  with  the  proposition  with 
which  we  started  out,  —  that  a  master,  as  such,  can  be  held  liable 
for  the  negligence  only  of  those  who  are  employed  in  his  work  by 
his  authority;  and  hence,  if  a  servant  who  is  employed  to  perform 
a  certain  work  procures  another  person  to  assist  him,  the  master  is 
liable  for  the  sole  negligence  of  the  latter,  only  when  the  servant 
had  authority  to  employ  such  assistant.  Such  authority  may,  how- 
ever, be  implied  as  well  as  express,  and  subsequent  ratification  is 
equivalent  to  original  authority ;  and,  where  the  servant  has  author- 
ity to  employ  assistants,  such  assistants,  of  course,  become  the  im- 
mediate servants  of  the  master,  the  same  as  if  employed  by  him 
personally.    Such  authority  may  be  implied  from  the  nature  of  the 


638        HALUPTZOK  V.   GREAT  NOETHEBN  KY.  CO.     [CHAP.  XX. 

work  to  be  performed,  and  also  from  the  general  course  of  conduct- 
ing the  business  of  the  master  by  the  servant  for  so  long  a  time  that 
knowledge  and  consent  on  part  of  the  master  may  be  inferred.  It 
is  not  necessary  that  a  formal  or  express  emplojonent  on  behalf  of 
the  master  should  exist,  or  that  compensation  should  be  paid  by  or 
expected  from  him.  It  is  enough  to  render  the  master  liable  if  the 
person  causing  the  injury  was  in  fact  rendering  service  for  him  by 
his  consent,  express  or  implied. 

Under  this  view  of  the  law,  the  evidence  made  a  case  for  the  jury 
to  determine  whether  Westinghouse  had  implied  authority  from  the 
defendant  to  employ  O'Connell  as  an  assistant,  or,  to  state  the  ques- 
tion differently,  whether  O'Connell  was  rendering  these  services  for 
the  defendant  by  its  consent. 

If  the  evidence  were  limited  to  the  employment  of  O'Connell 
alone,  and  to  what  occurred  during  the  ten  days  preceding  the  acci- 
dent, it  would  probably  be  insufficient  to  support  a  verdict  in  favor 
of  the  plaintiff.  But  it  is  an  undisputed  fact  that  Westinghouse 
had  for  over  a  year  before  this  been  employing  Foutch  as  an  assist- 
ant under  a  similar  arrangement,  without,  so  far  as  appears,  any 
objection  on  part  of  the  defendant,  although  the  length  of  time 
was  such  that  its  knowledge  of  the  fact  may  be  fairly  inferred.  It 
is  true  that  implied  authority  to  employ  Foutch  as  assistant  would 
not  necessarily  include  authority  to  employ  O'Connell;  but  the  fact 
of  Foutch's  long  continued  emplojTnent  has  an  important  bearing 
upon  the  question  of  Westinghouse's  implied  authority,  as  indicated 
by  the  manner  of  conducting  the  business;  and,  as  bearing  upon 
this  same  question  of  implied  authority,  the  fact  is  significant  that 
after  the  accident  both  Foutch  and  O'Connell  continued,  without 
objection,  to  perform  these  services  for  defendant,  as  assistants  to 
Westinghouse,  up  to  the  date  of  the  trial.  Additional  force  is  added 
to  all  this,  when  considered  in  connection  with  the  nature  of  the 
duties  of  a  station  agent  at  a  place  like  this,  which  are  of  such 
multifarious  character  as  to  render  the  employment  of  an  occasional 
assistant  not  only  convenient,  but  almost  necessary.  The  facts  that 
the  consideration  for  the  services  of  these  assistants  moved  from 
Westinghouse  rather  than  defendant,  and  that  their  aid  was  for  the 
accommodation  or  convenience  of  Westinghouse,  are  not  controlling. 

There  is  nothing  in  the  point  that  defendant  is  not  liable  because 
the  freight  which  O'Connell  was  moving  had  been  delivered  to  the 
consignee,  who  had  promised  to  take  care  of  it  where  it  lay,  on  the 
station  platform. 

O'Connell's  act  was  in  the  line  of  his  employment,  and  was  being 
done  in  furtherance  of  defendant's  business.  The  liability  of  the 
defendant  to  third  parties  cannot  be  made  to  depend  upon  the  ques- 
tion whether,  as  between  it  and  the  owner  of  the  goods,  it  owed  the 
latter  the  continued  duty  of  taking  care  of  them. 

Order  affirmed. 


CHAP.  XX.]  SUB-SEBVANTS  AND  VOLUNTEERS.  639 

CHTJECH  V.  CHICAGO,  M.  &  ST.  P.  RY.  CO. 

50  Minn.  218.     1892. 

Action  by  Charles  Church,  an  infant,  against  the  Chicago,  Mil- 
waukee &  St.  Paul  Eailway  Co.,  to  recover  for  personal  injuries. 
From  a  judgment  for  defendant,  plaintiff  appeals. 

Mitchell,  J.  Taking  the  admissions  in  the  pleadings,  the  evi- 
dence admitted,  and  accepting  as  true  all  that  plaintiff  offered  to 
prove,  the  facts  in  this  case  were  as  follows : 

Plaintiff  had  been  in  the  employment  of  the  defendant  as  a 
brakeman  on  a  freight  train  running  east  of  Calmar,  la.  Having 
been  taken  ill,  he  had  gone,  on  a  leave  of  absence,  to  his  home  in 
Northfield,  Minn.  On  the  day  in  question  he  went-  down  to  defend- 
ants depot  in  Northfield,  for  the  purpose  of  writing  or  telegraphing 
to  Austin  for  a  pass  over  defendant's  road  to  go  back  to  his  work. 
While  he  was  at  the  depot  a  wrecking  train  came  into  the  station 
in  charge  of  a  conductor,  and  with  an  engineer,  fireman,  and  two 
brakemen,  one  of  whom  is  called  "  head  brakeman."  This  train  was 
on  its  way  to  pick  up  a  wreck,  and,  in  addition  to  an  engine  and 
tender,  consisted  of  two  or  more  flat  cars,  upon  one  of  which  was 
loaded  a  derrick,  and  on  another  two  pair  of  heavy  car  trucks.  After 
the  train  pulled  into  the  station,  the  trainmen  proceeded  to  switch 
the  cars  and  transpose  them  so  as  to  put  the  "  derrick  car "  in 
the  rear,  and  place  the  "  truck  car "  next  in  front  of  the  derrick. 
On  its  arrival  the  conductor  left  the  train  to  attend  to  his  other 
usual  duties  at  the  station  while  this  switching  was  being  done,  the 
head  brakeman  being  in  charge  of  the  switching  movements  of  the 
train. 

While  this  switching  was  going  on,  the  head  brakeman  being  on  the 
cars  and  the  other  brakeman  at  the  switch,  and  a  third  man  being 
necessary  (as  plaintiff  offered  to  prove)  to  do  the  switching,  the  head 
brakeman,  seeing  plaintiff  standing  by,  requested  him  to  get  onto  the 
cars  and  assist.  The  plaintiff  did  so,  and  while  thus  engaged  sus- 
tained the  injuries  complained  of,  caused,  as  is  claimed,  by  reason 
of  the  trucks  on  the  flat  car  not  being  properly  blocked. 

It  was  necessary  for  the  plaintiff  to  establish,  as  the  essential 
foundation  of  his  right  to  recover,  the  existence  of  the  relation  of 
master  and  servant  between  himself  and  the  defendant  company,  and 
this  in  turn  depended  upon  the  authority  of  the  head  brakeman  to 
employ  him  to  assist  in  the  switching. 

In  our  opinion,  none  of  the  evidence  introduced  or  offered  had 
any  tendency  to  prove  any  such  relation  between  plaintiff  and  de- 
fendant, or  any  such  authority  on  the  part  of  the  head  brakeman. 
The  fact  that  plaintiff  had  been  or  was  in  the  employment  of  the 


640  CHUEOH   V.   CHICAGO,   M.    &   ST.    P.   BY.    CO.  [CHAP.   XX. 

defendant  elsewhere  is  wholly  unimportant.  He  was  not  at  the 
station  on  defendant's  business.  He  was  not  an  employee  of  defendant 
at  that  place  or  as  to  the  switching  of  that  wrecking  train.  The  case 
stands  precisely  as  if  the  head  brakeman  had  called  on  any  other 
bystander  at  the  station  to  assist.  While  the  head  brakeman  had 
charge  of  the  movements  of  the  train  in  doing  this  switching  during 
the  temporary  absence  of  the  conductor  from  the  cars  on  other 
business,  yet  this  was  the  entire  scope  and  extent  of  his  authority. 
The  conductor  had  not  abdicated  the  general  charge  and  control  of 
the  train,  or  turned  it  over  to  the  brakeman.  The  latter  had  no 
authority,  actual  or  apparent,  express  or  implied,  either  from  cus- 
tom or  from  any  present  pressing  emergency,  to  employ  additional 
brakemen,  either  permanently  or  temporarily.  It  was  wholly  im- 
material whether  two  brakemen  were  or  were  not  sufficient  to  do  the 
switching.  Even  if  they  were  not,  that  fact  would  not,  under  thq 
circumstancs,  give  a  mere  brakeman  authority  to  employ  an  addi- 
tional force.  If  any  one  on  the  ground  had  any  implied  authority 
to  do  so  it  was  the  conductor,  who  had  charge  and  control  of  the 
train.  In  doing  what  he  did  the  plaintiff  was,  therefore,  a  mere 
volunteer,  and,  as  such,  assumed  all  the  risks  incident  to  the  position. 
The  defendant  did  not  bear  to  him  the  relation  of  master  or  employer, 
and  owed  him  no  duty  as  such.  Flower  v.  Railroad  Co.,  69  Pa. 
St.  210;  Sherman  v.  Railroad  Co.,  72  Mo.  62;  Sparks  v.  Railway 
Co.,  82  Ga.  156;  Everhart  v.  Railway  Co.,  78  Ind.  292;  Rhodes 
V.  Banking  Co.,  84  Ga.  320;  Railway  Co.  v.  Lindley,  42  Kan. 
714. 

Counsel  for  plaintiff  has  cited  no  case  which  sustains  his  conten- 
tion in  this  case.  Many  of  those  which  he  cites  have  no  bearing 
whatever  upon  the  question  here  involved.  There  are  cases  which 
hold  that,  where  a  regular  brakeman  is  absent,  and  the  proper  and 
safe  management  of  the  train  so  requires,  the  conductor  in  charge  has 
authority  to  supply  the  place  of  the  absent  brakeman.  Such,  for 
example,  are  the  cases  of  Sloan  v.  Railway  Co.,  62  Iowa,  728,  and 
Railway  Co.  v.  Propst,  83  Ala.  518.  And  if  any  sudden  or  unex- 
pected emergency  should  arise,  such  that  the  safety  of  the  train  de- 
manded an  extra  force  of  brakemen,  probably  it  would  be  held  that 
it  was  within  the  implied  authority  of  the  conductor  to  employ 
them.  But  such  cases  are  clearly  distinguishable  from  the  present, 
where  a  mere  brakeman,  without  the  knowledge  of  and  without 
authority  from  the  conductor  in  charge  of  the  train,  and  in  the 
absence  of  any  sudden  emergency,  assumed  to  call  upon  a  bystander 
to  assist  in  switching. 

Another  line  of  cases  cited  by  counsel  is  also  clearly  distinguish- 
able from  the  present  one.  They  are  those  where  one  assists  the 
servants  of  another  at  their  request  for  the  purpose  of  expediting 
his  own  business  or  that  of  his  master.     Such  is  the  case  of  Eason 


CHAP.  XX.]  SUB-SERVANTS  AND  VOLUNTEERS.  641 

V.  Railway  Co.,  65  Tex.  577.  The  ease  of  Railway  Co.  v.  Bolton, 
43  Ohio  St.  224,  is  also  referable  to  the  same  class.  See,  also.  Holmes 
V.  Railway  Co.,  L.  R.  4  Exch.  254,  affirmed  L.  R.  6  Exch.  123.  The 
decisions  in  this  class  of  cases  are  placed  upon  the  ground  that, 
though  performing  a  service  beneficial  to  both,  the  party  is  doing 
so  in  his  own  behalf,  and  not  as  the  servant  of  the  company,  and 
is  entitled  to  the  same  protection  against  its  negligence  as  if  attend- 
ing to  his  own  private  affairs.  See,  also,  Thomp.  Neg.  1045,  and 
cases  cited. 

Neither  is  the  case  of  Johnson  v.  Water  Co.,  71  Wis.  553,  so  much 
relied  on  by  counsel,  particularly  in  point.  The  question  there  arose 
merely  on  demurrer  to  the  complaint,  and  the  decision  is  merely 
made  to  rest  upon  the  fact  that  the  complaint  alleged  that  the 
person  who  employed  the  plaintiff  to  assist  was  at  the  time  the 
superintendent  having  charge  and  control  of  the  work. 

There  was  no  error  in  excluding  the  evidence  offered  by  plaintiff, 
and  consequently  the  order  appealed  from  must  be  affirmed. 


STREET   RAILWAY   COMPANY   v.   BOLTON. 

43  Oh.  St.  224.     1885. 

On  the  28th  of  April,  1879,  the  Mclntire  Street  Railway  Co.,  the 
plaintiff  in  error,  was  the  owner  of,  and  operating  a  street  railroad 
in  the  city  of  Zanesville.  The  railroad  was  constructed  of  a  single 
track,  with  occasional  side  tracks,  whereby  cars  drawn  by  horses 
moving  in  opposite  directions  were  enabled  to  pass.  On  the  day 
named  the  defendant  in  error  was  a  passenger  on  one  of  the  cars 
going  northward.  This  car  having  been  driven  past  the  side  track, 
where  it  should  have  passed  the  south-bound  car  of  plaintiff  in  error, 
it  became  necessary  to  push  the  north-bound  car  backward  to  the 
side  track  so  that  the  south-bound  car  could  pass,  and  thus  enable 
each  car  to  proceed  to  its  destination.  At  the  request  of  the  driver 
of  the  north-bound  car,  on  which  Benjamin  Bolton,  the  defendant  in 
error,  was  a  passenger,  he  assisted  the  driver  to  push  the  car  back- 
ward on  the  side  track,  and  while  so  engaged  he,  defendant  in  error, 
was  injured  by  the  carelessness  and  negligence  of  the  driver  of  the 
south-bound  car,  while  engaged  in  the  business  of  the  plaintiff  in 
error,  and  without  any  fault  or  negligence  of  the  defendant  in  error. 

For  this  injury  the  defendant  in  error  brought  this  action  against 
plaintiff  in  error  in  the  court  of  common  pleas  of  Muskingum  county, 
and  recovered  a  verdict  and  judgment. 

On  the  trial  the  court  refused  to  instruct  the  jury  that,  "  if  they 
find  that  the  plaintiff,  without  the  knowledge  or  consent  of  the 

41 


643  STBEET   RAILWAY   COMPANY   V.   BOLTON.  [CHAP.   XX. 

defendant,  volunteered  to  assist  the  driver  of  the  north-bound  car 
in  the  performance  of  his  duties  as  such  driver,  the  plaintiff  thus 
volunteering  to  assist,  whether  with  or  without  request  of  such 
driver,  would  for  the  time  being  stand  in  no  better  relation  with 
respect  to  defendant's  liability,  than  would  a  servant  of  the  defend- 
ant, and  would  assume  the  risks  incident  to  such  service;  and  that 
the  plaintiff,  while  thus  assisting  such  driver,  cannot  recover  damages 
resulting  to  him  from  the  negligence  of  the  driver  he  is  assisting, 
or  from  the  negligence  of  the  driver  of  the  south-bound  car,  pro- 
vided they  were  persons  possessing  ordinary  care  and  skill  in  their 
employment,  and  one  not  superior  in  authority  to  the  other;  that 
an  employer  is  not  liable  in  damages  to  an  employee  for  injuries 
resulting  to  such  employee  from  the  negligence  of  a  co-employee  not 
superior  in  authority,  and  to  whom  the  employee  injured  did  not 
owe  obedience,  if  such  employees  possessed  ordinary  care  and  skill 
in  their  employment;  and,  if  the  plaintiff  volunteered  to  assist 
the  driver,  as  before  stated,  and  while  so  assisting  was  injured 
by  the  negligence  of  either  of  said  employees,  he  cannot  recover, 
for  he  assumes  the  risks  incident  to  such  undertaking,  and  does 
not  stand  in  any  better  position  in  respect  to  defendant's  liability 
than  did  the  employee  he  was  thus  assisting."  But  did  instruct  as 
follows : 

"  That  if  the  plaintiff  was  requested  by  the  driver  of  the  north- 
bound car  to  assist  in  pushing  it  back,  and  he  did  so  assist,  and  in 
doing  so  was  injured  by  the  carelessness  or  negligence  of  the  driver 
of  the  north-bound  car  or  of  the  south-bound  car,  he  can  recover,  if 
such  assistance  was  apparently  necessary.  Or  if  there  was  an  actual 
necessity  for  him  to  assist  the  driver  in  pushing  back  the  north-bound 
car,  and  he  did  so  assist,  and  while  doing  so  was  injured  by  the 
negligence  of  the  driver  of  either  car,  he  can  recover,  whether  he  was 
requested  by  the  driver  to  assist  or  not." 

The  district  court  affirmed  the  judgment  of  the  common  pleas. 

This  proceeding  is  prosecuted  to  reverse  the  judgments  of  the 
courts  below. 

In  refusing  to  give  the  instructions  requested  and  in  the  charge 
as  given,  the  plaintiff  in  error  alleges  the  court  of  common  pleas 
erred,  and  that  the  district  court  erred  in  aflfirming  the  judgment 
below, 

McIlvaine,  C.  J.  It  is  imdoubtedly  a  well-established  principle 
of  law  that  a  master  who  is  guilty  of  no  carelessness  in  employing 
servants  is  not  liable  to  one  for  injuries  caused  by  the  carelessness 
of  a  fellow  servant,  while  both  are  engaged  in  the  common  service, 
and  no  relation  of  subordination  exists  between  them.  In  such  case 
each  servant  assumes  the  risk  of  injuries  from  the  carelessness  of 
fellow  servants. 

It  is  also  weU  settled  that  a  person  who  without  any  employment 


CHAP.   XX.]  SUB-SERVANTS   AND  VOLUNTEERS.  643 

voluntarily  undertakes  to  perform  service  for  another,  or  to  assist 
the  servants  of  another  in  the  service  of  the  master,  either  at  the 
request  or  without  the  request  of  such  servants,  who  have  no  authority 
to  employ  other  servants,  stands  in  the  relation  of  a  servant  for  the 
time  being,  and  is  to  be  regarded  as  assuming  all  the  risks  incident 
to  the  business. 

But  it  does  not  follow  that  under  all  circumstances  a  person  who 
assists  the  servants  of  another  in  the  discharge  of  their  duties,  with- 
out employment  by  the  master,  is  to  be  regarded  as  voluntarily  as- 
suming the  relation  of  a  fellow  servant,  or  the  risks  pertaining  to 
that  relation.  To  illustrate :  suppose  a  servant  in  driving  his  master's 
team  on  the  highway  founders  in  such  a  manner  as  to  prevent  the 
use  of  the  highway  by  others  for  the  time  being.  Another  person, 
who  is  thus  impeded  in  the  use  of  the  road,  assists  the  servant,  either 
with  or  without  request,  to  remove  the  impediments  to  travel  from 
the  highway.  Such  other  person  does  not  thereby  become  the  fellow 
servant  of  the  driver.  Indeed,  in  no  just  sense  has  he  voluntarily 
entered  the  service  of  the  master.  And  the  rule  of  law  first  above 
stated  does  not  apply  to  the  case  supposed,  and  therefore  it  was  not 
error  in  the  court  of  common  pleas  to  refuse  it. 

The  law  of  the  case  was  properly  given  in  the  charge. 

The  plaintiff  in  the  court  of  common  pleas  was  not  a  mere  vol- 
unteer, within  the  meaning  of  the  rule  or  law  contended  for  by  the 
plaintiff  in  error,  but,  as  a  passenger  on  the  north-bound  car,  was 
interested  in  having  it  driven  to  its  destination.  To  this  end  it  was 
necessary  to  pass  the  south-bound  car.  This  could  only  be  accom- 
plished by  pushing  the  north-bound  car  back  upon  the  siding.  In 
doing  this,  although  it  may  not  have  been  absolutely  necessary  for 
the  passenger  to  assist  the  driver,  it  was  a  prudent  and  reasonable 
act,  justified  by  the  circumstances  of  the  case ;  not  a  wrongful  inter- 
ference and  intermeddling  with  business  in  which  he  had  no  concern. 
It  was  not,  in  fact  or  in  law,  an  assumption  of  risk  from  the  care- 
lessness of  the  defendant  or  any  of  its  servants. 

The  law  in  this  case  is  well  stated  in  Wright  v.  The  London  & 
N.  W.  K.  E.  Co.,  1  Q.  B.  Div.  252. 

That  case  was  this :  "  The  plaintiff  sent  a  heifer  (which  was  put 
into  a  horse-box)  by  defendants'  railway  to  their  P.  station.  On 
the  arrival  of  the  train  at  the  station,  there  being  only  two  porters 
available  to  shunt  the  horse-box  to  the  siding,  from  which  alone  the 
heifer  could  be  delivered  to  the  plaintiff,  in  order  to  save  delay  he 
assisted  in  shunting  the  horse-box,  and  while  he  was  so  assisting  he 
was  run  against  and  injured  through  a  train  being  negligently 
allowed  by  the  defendants'  servants  to  come  out  of  the  siding.  There 
was  evidence  that  the  station-master  knew  that  the  plaintiff  was 
assisting  in  the  shunting,  and  assented  to  his  doing  so :  Held,  afl&rm- 
ing  the  decision  of  the  queen's  bench,  that  the  plaintiff  was  not  a 


644  STREET   RAILWAY   COMPANY   V.  BOLTON.  [CHAP,   XX. 

mere  volunteer  assisting  the  defendants'  servants,  but  was  on  the 
defendants'  premises,  with  their  consent,  for  the  purpose  of  expe- 
diting the  delivery  of  his  own  goods ;  and  the  defendants  were  there- 
fore liable  to  him  for  the  negligence  of  their  servants,  according  to 
the  principle  of  Holmes  v.  North  Eastern  Ry.  Co.,  L.  E.  4  Ex.  254; 
6  Ex.  123."  Judgment  affirmed. 


CHAP.   XXI.]  LIABILITY  FOB  T0ET8  OF  SEBVANT.  646 


PART  II. 

LIABILITY  OP  MASTEE  FOB  TOETS  AND  CEIMES 
OF   SEEVANT. 

CHAPTEE   XXI. 
LiABiLiTT  or  Masteb  to  Thibd  Pebsons  fob  Tobts  of  Seevant. 


DEMPSEY  V.   CHAMBEES. 

154  Mass.  330.     1891. 
[Reported  herein  at  p.  119.] 


HANNON  V.   SIEGEL-COOPEE   CO. 

167  N.  Y.  244.     1901. 
[Reported  herein  at  p.  470.] 


McCOED   V.   WESTEEN   UNION   TEL.   CO. 

39  Minn.  181.    1888. 
[Reported  herein  at  p.  492.] 


HALUPTZOK  v.    GT.  NOETHEEN  EAILWAY  CO. 

55  Minn.  446.    1893. 
[Reported  herein  at  p.  635.] 


COSGEOVE   V.   OGDEN. 

49  N.  Y.  255.     1872. 

The  action  was  brought  to  recover  damages  for  injuries  resulting 
firom  the  alleged  negligence  of  defendants'  servant. 
Defendants  at  the  time  stated  in  the  complaint,  were  co-partners 


646  COSGROVE  V.   OQDEN.  [CHAP.  XII. 

in  the  lumber  business,  having  a  lumber  yard  in  New  York,  located 
on  Thirteenth  Street,  east  of  Avenue  C,  which  was  in  charge  of 
Walter  S.  Brown,  as  the  foreman  and  agent  of  the  defendants. 

In  hauling  lumber  belonging  to  this  yard  up  from  the  dock,  where 
it  had  been  discharged  from  the  vessels.  Brown  piled  a  large  quan- 
tity of  heavy  timbers  in  Thirteenth  Street  on  the  sidewalk,  west  of 
Avenue  C,  and  nearly  opposite  the  house  where  the  plaintiffs  parents 
resided,  more  than  a  block  from  defendants'  yard. 

On  the  9th  day  of  September,  1866,  this  timber,  which  had  been 
piled  one  upon  the  other  to  the  height  of  several  feet,  fell  down  as 
the  plaintiff  was  passing  by  on  the  sidewalk,  and  greatly  injured  him. 

Brown  had  been  instructed  by  defendants  not  to  pile  the  lumber 
there.  Plaintiff,  who  was  about  six  years  old,  was  out  playing,  un- 
attended, and  was  in  the  habit  of  so  doing.  The  street  was  a  quiet 
one,  but  little  travelled  upon.  At  the  close  of  plaintiff's  evidence, 
defendants  moved  for  a  nonsuit  upon  the  ground  that  it  appeared 
that  plaintiff  and  his  parents  had  been  guilty  of  negligence  which 
caused  or  contributed  to  the  injury,  which  motion  was  denied  and 
defendants  excepted. 

Verdict  for  plaintiff ;  afl&rmed  at  General  Term. 

Geovee,  J.  The  case  shows  that  Brown  was  employed  by  the 
defendants  as  superintendent  of  a  lumber  yard  owned  by  them.  That 
in  the  prosecution  of  this  business  he  had  the  entire  charge  of  re- 
moving timber  and  lumber  from  the  dock  to  the  yard,  piling  it  upon 
the  yard,  and  of  selling  and  delivering  it  to  customers.  That  in  the 
prosecution  of  this  business  he  caused  a  large  quantity  of  timber  to 
be  hauled  to  and  piled  upon  or  near  the  sidewalk  of  Thirteenth  Street, 
west  of  Avenue  C,  in  the  city  of  New  York,  and  nearly  opposite  the 
house  where  the  plaintiff's  parents  resided,  at  the  distance  of  about 
a  block  from  the  yard.  Brown  testified  that  he  piled  it  there  because 
it  was  more  convenient  than  it  was  to  pile  it  upon  the  yard.  That 
he  had  no  direct  authority  from  either  of  the  defendants  to  pile  it 
there.  That  he  had  asked  one  of  the  defendants  whether  he  might 
pile  it  there,  and  he  had  told  him  not  to  do  it,  but  that  he  did,  not- 
withstanding, because  of  the  greater  convenience  and  facility  of  so 
doing.  The  defendants  were  responsible  for  this  act  of  Brown.  It 
was  an  act  done  by  him  in  the  prosecution  of  their  business,  and  they 
are  not  relieved  from  responsibility  therefor  by  his  departure  from 
their  instructions  in  the  manner  of  doing  it.  The  test  of  the  mas- 
ter's responsibility  for  the  act  of  his  servant  is  not  whether  such  act 
was  done  according  to  the  instructions  of  the  master  to  the  servant, 
but  whether  it  was  done  in  the  prosecution  of  the  business  that  the 
servant  was  employed  by  the  master  to  do.  If  the  owner  of  a  build- 
ing employs  a  servant  to  remove  the  roof  from  his  house  and  directs 
him  to  throw  the  materials  upon  his  lot,  where  no  one  would  be 
endangered,   and  the  servant,   disregarding  this   direction,   should 


CHAP.   XXI.]  LIABILITY   FOR  TORTS   OF   SERVANT.  647 

carelessly  throw  them  into  the  street,  causing  an  injury  to  a  passen- 
ger, the  master  would  be  responsible  therefor,  although  done  in  vio- 
lation of  his  instructions,  because  it  was  done  in  the  business  of  the 
master.  But  should  the  servant,  for  some  purpose  of  his  own,  inten- 
tionally throw  material  upon  a  passenger,  the  master  would  not  be 
responsible  for  the  injury,  because  it  would  not  be  an  act  done  in  his* 
business,  but  a  departure  therefrom  by  the  servant  to  effect  some 
purpose  of  his  own.  Weed  v.  The  Panama  Railroad  Co.,  17  N.  Y. 
362;  Mali  v.  Lord,  39  id.  381,  and  cases  cited.  The  remark  cited 
by  the  counsel  from  the  opinion  in  the  latter  case,  to  the  effect  that 
it  cannot  be  presumed  that  a  master  by  entrusting  his  servant  with 
his  property  and  conferring  power  upon  him  to  transact  his  busi- 
ness, thereby  authorizes  him  to  do  any  act  for  its  protection  that  he 
could  not  lawfully  do  if  present,  must  be  construed  in  reference  to 
the  facts  of  that  case  and  of  the  point  to  which  it  was  applied.  So 
considered,  it  is  obvious  that  a  master  by  employing  a  servant  to 
protect  his  property  did  not  thereby  authorize  him  illegally  to  arrest 
and  search  one  that  he  suspected  had  stolen  and  secreted  upon  his 
person  a  portion  of  such  property,  for  the  reason  that  such  arrest  and 
search  was  not  embraced  in  the  business  of  guarding  and  protecting 
the  property. 

The  judge  was  right  in  refusing  to  hold  as  a  legal  conclusion  that 
the  plaintiff's  parents  were  guilty  of  negligence  in  permitting  him 
to  go  in  the  street  unattended.  The  case  shows  that  they  lived  in 
a  part  of  the  city  occupied  principally  by  laborers  living  in  tenement 
houses,  where  but  few  vehicles  were  passing  in  the  street,  where  there 
was  but  little  if  any  more  danger  to  be  apprehended  than  upon  an 
ordinary  country  road.  The  plaintiff  was  a  lad  nearly  six  years  of 
age.  The  law  cannot  assume  that  such  boys  are  incapable  of  pro- 
tecting themselves  from  any  danger  to  be  apprehended  in  such  streets 
and  roads.  The  question  as  to  the  negligence  of  the  parents  was 
fairly  submitted  to  the  jury,  and  their  verdict  clears  them  from  such 
an  imputation.  The  judgment  appealed  from  must  be  aflfirmed,  with 
costs. 

All  concur.  Judgment  affirmed. 


COHEN  V.   DEY   DOCK  &   C.   R.   R.   CO. 

69  N.  Y.  170.     1877. 

Appeal  from  order  of  the  General  Term  of  the  Superior  Court  of 
the  city  of  New  York,  reversing  a  judgment  in  favor  of  defendant, 
entered  upon  an  order  nonsuiting  plaintiff  on  the  trial,  and  granting  a 
new  trial.    (Reported  below,  8  J.  &  S.,  368.) 

This  action  was  brought  to  recover  damages  alleged  to  have  been 
sustained  by  reason  of  the  negligence  of  defendant's  servant.     On 


648  COHEN    V.   DBY   DOCK   &   C.    B.    R,    CO.  [CHAP.    XXI. 

April  27,  1872,  plaintiff  was  driving  along  Catharine  Street,  in  the 
city  of  New  York,  in  a  buggy.  He  had  crossed  the  track  of  defend- 
ant's road,  but  before  the  rear  part  of  the  buggy  was  far  enough 
from  the  track,  so  that  a  car  could  pass  without  striking  it,  his  further 
progress  was  arrested  by  a  blockade  of  trucks  and  other  vehicles,  and 
he  was  unable  to  move  forward,  and  by  other  vehicles  he  was  pre- 
vented from  moving  in  any  direction.  A  car  approached  on  de- 
fendant's road,  the  driver  of  which,  as  plaintiff  testified,  after  wait- 
ing a  moment  or  two,  told  the  plaintiff  to  "  get  off  the  track."  The 
plaintiff  asked  him  to  wait  until  the  trucks  moved,  promising  then 
to  move.  The  driver  said,  **  Damn  you,  if  you  don't  get  off  here  —  I 
am  late — I  will  get  you  off  some  other  way."  The  plaintiff  said, 
"  You  wait  a  moment ;  I  guess  the  trucks  are  moving,  and  I  may  go." 
The  trucks  started,  and  as  the  plaintiff  prepared  to  move  on,  the 
driver  started  his  horses,  and  the  platform  of  the  car  struck  the  hind 
wheels  of  the  buggy  and  overturned  it,  thus  causing  the  injury 
complained  of. 

Defendant's  counsel  moved  fo^  a  nonsuit  on  the  ground,  among 
others,  that  the  car-driver's  act  was  not  within  the  scope  of  his 
authority,  but  was  an  unlawful  and  unauthorized  act,  for  which 
defendant  was  not  responsible. 

Per  Curiam.  The  general  rule  of  law  contended  for  by  the  ap- 
pellant, that  a  master  cannot  be  held  liable  for  the  wilful,  inten- 
tional, and  malicious  act  of  his  servant,  whereby  injury  is  caused 
to  a  third  person,  is  not  disputed-  Many  limitations  and  illustrations 
of  the  rule  will  be  found  in  reported  cases,  and  it  is  not  always  easy 
to  apply  the  rule.  It  has  recently  been  imder  consideration  in  this 
court  in  the  case  of  Rounds  v.  The  Delaware,  Lack.  &  Western  R,  R. 
Co.,  64  N.  Y.  129,  and  in  the  opinion  of  Andrews,  J.,  in  that  ease, 
is  found  a  very  thorough  and  satisfactory  consideration  of  the  rule, 
and  the  principles  upon  which  it  is  founded.  The  general  principles 
there  announced  are  as  follows:  To  make  a  master  liable  for  the 
wrongful  act  of  a  servant  to  the  injury  of  a  third  person,  it  is  not 
necessary  to  show  that  he  expressly  authorized  the  particular  act. 
It  is  sufficient  to  show  that  the  servant  was  engaged  at  the  time  in 
doing  his  master's  business,  and  was  acting  within  the  general  scope 
of  his  authority,  and  this,  although  he  departed  from  private  in- 
structions of  the  master,  abused  his  authority,  was  reckless  in  the 
performance  of  his  duty,  and  inflicted  unnecessary  injury.  While 
the  master  is  not  responsible  for  the  wilful  wrong  of  the  servant,  not 
done  with  a  view  to  the  master's  service,  or  for  the  purpose  of  ex- 
ecuting his  orders;  if  the  servant  is  authorized  to  use  force  against 
another,  when  necessary,  in  executing  his  master's  orders,  and  if, 
while  executing  such  orders,  through  misconduct  or  violence  of 
temper,  the  servant  use  more  force  than  is  necessary,  the  master  is 
liable. 


CHAP.   XXI.]  LIABILITY  FOE  TORTS  OP  SERVANT.  649 

The  master  who  puts  the  servant  in  a  place  of  trust  or  responsibil- 
ity, or  commits  to  him  the  management  of  his  business  or  the  care 
of  his  property,  is  justly  held  responsible  when  the  servant,  through 
lack  of  judgment  or  discretion,  or  from  infirmity  of  temper,  or  under 
the  influence  of  passion  aroused  by  the  circumstances  and  the  occa- 
sion, goes  beyond  the  strict  line  of  his  duty  or  authority,  and  inflicts 
an  unjustifiable  injury  upon  another. 

The  master  is  not  exempt  from  responsibility  in  all  cases  on  show- 
ing that  the  servant,  without  express  authority,  designed  to  do  the 
act  or  the  injury  complained  of.  But  if  the  servant,  under  guise  and 
cover  of  executing  his  master's  orders,  and  executing  the  authority 
conferred  upon  him,  wilfully  and  designedly,  for  the  purpose  of 
accomplishing  his  own  independent,  malicious,  or  wicked  purposes, 
does  an  injury,  then  the  master  is  not  liable. 

When  it  is  said  that  the  master  is  not  responsible  for  the  wilful 
wrong  of  the  servant,  the  language  is  to  be  understood  as  referring 
to  an  act  of  positive  and  designed  injury  not  done  with  a  view  to  the 
master's  service,  or  for  the  purpose  of  executing  his  orders. 

The  application  of  these  principles  to  the  facts  of  this  case  leaves 
no  doubt  that  the  case  was  properly  disposed  of  by  the  General  Term 
of  the  Superior  Court.  The  driver  was  driving  this  car  for  the 
defendant,  and  in  its  business.  As  the  car  could  only  run  upon  the 
railroad  track,  it  was  his  duty,  so  far  as  he  reasonably  and  peaceably 
could,  to  overcome  obstacles  on  the  track  in  the  way  of  his  car;  and 
in  driving  his  car  and  overcoming  these  obstacles,  he  was  acting 
within  the  general  scope  of  his  authority.  If  he  acted  recklessly 
(and  that  is  the  most  that  can  be  said  here),  the  defendant  was 
responsible  for  his  acts.  He  was  not  seeking  to  accomplish  his  own 
ends.  He  was  seeking  to  make  his  trip  on  time,  and  for  that  pur- 
pose, and  not  for  any  purpose  of  his  own,  sought  to  remove  plain- 
tiff's buggy  from  the  track.  It  cannot  be  said  to  be  clear,  upon  the 
facts  proved,  that  the  act  of  the  driver  was  done  with  a  view  to  in- 
jure the  plaintiff,  and  not  with  a  view  to  his  master's  service.  He 
may  have  supposed  that  the  plaintiff  would  get  off  from  the  track 
in  time,  or  that  he  could  crowd  him  off  without  injury.  The  evi- 
dence should  at  least  have  been  submitted  to  the  jury.  They  were 
the  proper  judges  of  the  motives  and  purposes  of  the  driver,  and  of 
the  character  and  quality  of  his  acts. 

The  order  must  be  affirmed  and  judgment  absolute  ordered  against 
the  defendant  with  costs. 

All  concur.  Order  affirmed  and  judgment  accordingly. 


SCHMIDT  V.  VANDEBVEEE.  [CHAP.  XXI. 

SCHMIDT  V.  VANDEEVEEB. 

110  N.  Y.  App.  Div.  758.     1906. 

Appeal  by  the  defendants,  John  Vanderveer  and  another,  from  a 
jtldgment  of  the  Supreme  Court  in  favor  of  the  plaintiff,  entered 
in  the  office  of  the  clerk  of  the  county  of  Kings,  upon  the  verdict  of 
a  jury  for  $4,500,  and  also  from  an  order  entered  in  said  clerk's 
office  denying  the  defendants'  separate  motions  for  a  new  trial  made 
upon  the  minutes. 

Gaynor,  J.  The  defendant  Brown  was  employed  by  the  defendant 
Vanderveer  to  keep  trespassers  off  his  land,  and  finding  the  plaintiff 
there  crabbing  committed  a  severe  battery  on  him  with  a  club.  The 
court  correctly  charged  in  substance,  that  if  the  servant  committed 
the  battery  in  the  course  of  his  duty  to  put  trespassers  off,  the  master 
was  liable,  even  though  the  battery  was  wanton  or  vindictive.  The 
plaintiff's  counsel  had  claimed  in  summing  up  that  the  motive  for 
the  battery  was  that  a  week  previously  a  trespasser  who  had  been  put 
off  by  the  servant  had  enraged  him  by  calling  him  names  (and  this 
appeared  from  the  servant's  testimony),  and  that  when  he  saw  the 
plaintiff  he  mistook  him  for  the  previous  trespasser,  and  committed  the 
battery  on  him  out  of  revenge.  This  caused  the  defendants'  counsel 
to  make  the  following  request  to  charge,  viz. :  ^^  jf  the  jury  believe, 
as  the  counsel  for  the  plaintiff  has  said,  that  the  reason  why  the 
assault  was  committed  by'Brown  was  that  Brown  was  then  revenging 
mmself  for  the  calling Tiim  of  opprobrious  names  by  plaintiff  or  by  a 
person  supposed  by  Brown  to  be  the  plaintiff,  the  jurj-  cannptj&ail 
a  verdict  against  the  defendant  Vanderveer." 

Now,  asjbhe  learned  trial  judge  perceived,  if  the  battery  were  corn- 
mi  tte3~in~putting  the  plaintiff  off,  that  the  *^  reason  "jfor  it  was  re- 
venge  would  not  exonerate  the  master.    It  would  still  have  been  done 
in  his  service.    If  the  defendant  was  in  fact  putting  the  plaintiff  off 
by  the  battery,  that  he  adopted  that  way  out  of  private  revenge  did 
not  exonerate  the  master.    The  request  therefore  lacked  an  essential, 
and  the  refusal  of  it  was  not  error.    But  if  the  battery  was  not  coni- 
mitted  in  putting  or  to  put  the  plaintiff  off,  or,  if  you  will,  to  give 
him  at  the  same  time  a  good  drubbing  for  coming  on  and  teach  him 
not  to  come  again  (for  all  of  which  the  master  would  be  liable),  but 
on  the  contrary-  was  done  solely  as  an  independent  and  disconnected^ 
act  of  revenge  of  the  servant,  the  master  would  not  be  liable  for  it, 
(tiirvin  V.  N.  Y.  C.  &  H.  R.  R.  E.  Co.,  166  N.  Y.  289;  Cohen  v.  Dry" 
Dock,  E.  B.  &  B.  R.  R.  Co.,  69  id.  170). 

If,  therefore,  the  request  had  been  that  if  the  battery  was  not  com- 
mitted in  putting  or  to  put  the  plaintiff  off,  or  because  he  came  on, 
or  to  teach  him  to  stay  off,  and  the  "  reason  "  of  it  was  revenge  for 


CHAP,    XXI.]  LIABILITY   FOR  TORTS   OF  SERVANT.  651 

the  opprobrious  names,  the  refusal  would  have  been  a  different  matter. 
The  learned  trial  judge's  response  to  the  request  was  that  he  could 
not  charge  it  "  in  that  form,"  which  warned  counsel  that  it  lacked 
something,  or  else  contained  too  much;  and  when  counsel,  upt  con- 
tent with  a  fair  charge,  resort  to  requests  of  exact  nicety,  they  must 
abide  to  be  judged  by  that  same  standard. 

The  learned  trial  judge  did  not  charge  that  the  jury  could  not  find 
against  the  servant  only,  but  must  render  a  joint  verdict,  as  is  claimed, 
but  the  contrary.  Mere  flaws  should  not  be  picked  in  a  judge's  charge. 
If  he  had  ruled  that  to  be  the  law  of  the  case,  the  question  whether 
the  acts  were  done  in  the  master's  service  would  not  have  been  sub- 
mitted to  the  jury  at  all. 

The  judgment  and  order  are  affirmed. 

Present  —  Jenks,  Hooker,  Gaynor,  Rich,  and  Miller,  JJ.  j 

Judgment  and  order  unanimously  affirmed,  with  costs.  ^^_       J  p 


EVERS  V.   KROUSE. 

70  N.  J.  L.  653.     1904. 


Hfi^- 


Gummere,  C.  J.     The  plaintiff  in  error  (the  defendant  below) 

resides  at  No. Park  Place,  in  the  city  of  Passaic.    On  the  24th  ^ 

of  July,  1901,  his  minor  son  was  directed  by  Mrs.  Krouse,  the  wife    ^)L^ 
of  the  defendant,  to  sprinkle  the  lawn  in  front  of  the  house  with  ^ 

water  from  the  garden  hose.  While  he  was  engaged  in  his  work,  a 
Mrs.  Glazier,  who  had  borrowed  from  Mr.  Evers,  the  plaintiff  below, 
his  horse  and  wagon,  drove  down  Park  Place  to  her  own  home,  which 
was  nearly  opposite  the  Krouse  residence,  tied  the  horse  to  a  hitch- 
ing post  along  the  curb,  and  left  it  standing  there  while  she  went  into 
her  house.  During  her  absence  young  Krouse  turned  the  hose  upon 
the  horse,  frightening  him  so  that  he  broke  loose  and  ran  away. 
Before  being  caught,  he  had  so  injured  himself  that  it  was  found 
necessary  to  destroy  him.  The  wagon  was  practically  demolished. 
This  suit  was  brought  to  recover  the  value  of  the  horse  and  wagon, 
and  resulted  in  a  verdict  and  judgment  for  the  plaintiff. 

The  only  error  assigned  which  requires  consideration  is  directed  at 
the  charge  of  the  judge  to  the  jury  in  dealing  with  the  question  of  the 
liability  of  the  defendant.  The  instruction  complained  of  was  as  fol- 
lows: "  The  boy  was  en^agedJn  sprinkling  the  lawn.  He  was  accus- 
tomed-to,3o  it.  It  was  his  father^s  lawn.  Was  he,  then^in  his  father's 
service  while  he  was  doing  that?  Wqp  ^fiai  ins  fatner^s  business? 
if  he  was,  then,  lor  the  miscondnct  of  the 'boy  in  the  use  of  these 
things jvhich  he  was  nsiii^  *^9^t  faJS  fft^^^r's  business,  the  father  would 
be  responsible,  just  as  if  the  father  himself  had  done  it.  So,*  if  you 
find  that  the  boy  was  in  his  father's  service,  and,  tlirough  neglect, 


653  EVEBS   V.    KROUSE.  [CHAP.   XII. 

njT      through  lack  of  ordinary  care^  or  from  a  miBchieYous  dispositioiL 
A*^  threw  this  water  upon  or  over  the  horse  in  such  a  w^v  as  was  likftly 

^  to  frighten  the  horse,  tiien  both  father  and  son  woulrl  he  reBpi^^gihle/* 

It  is  contended  that  it  was  erroneous  to  instruct  the  jury  that  the 
father  would  be  liable  to  the  plaintiff  if  they  found  that  the  boy, 
"through  a  mischievous  disposition,  threw  this  water  upon  or  over 
the  horse." 

The  general  rule  as  to  the  question  of  the  master's  liability  for  the 
wrongful  acts  of  his  servant  is  thus  stated  by  Mr.  Justice  Fort,  speak- 
ing for  this  court,  in  the  case  of  Holler  v.  Ross,  68  N.  J.  Law,  324. 
"  The  servant  cannot  bind  the  master  to  respond  in  damages  to  the 
plaintiff  unless  it  be  shown  that  the  act  which  the  servant  did,  which 
caused  the  injury,  was  an  act  which  was  expressly  or  by  necessary  im- 
plication within  the  line  of  his  duty  under  his  employment.  .  .  . 
For  a  wilful  act  done  by  a  servant,  not  within  the  scope  of  his 
employment,  no  liability  attaches  to  the  master." 

A  reference  to  the  text-books  which  deal  with  this  subject  shows 
that  the  rule  laid  down  in  Holler  v.  Ross  has  been  generally  accepted 
in  other  jurisdictions,  notwithstanding  there  has  been  much  con- 
trariety of  result  reached  in  the  application  of  the  rule;  and  this, 
it  would  seem,  is  due  to  the  assumption  in  some  jurisdictions  that 
the  act  done  by  a  servant  while  engaged  in  the  master's  work  is 
necessarily  an  act  done  within  the  scope  of  the  former's  employment. 
But  this  is  conspicuously  a  non  sequitur.  ^^jct  done  by  the  ser- 
vant while  engaged  in  the  work  of  his  master  may  be  pntirply  dia- 
connected  therefrom  —  done,  not  as  a  means  or  for  the  purpose  of 
performing  that  work,  but  solely  for  the  accomplishment  of  the  inde- 
jjendent  malicious  or  mischievous  purpose  of  the  servant.  Such  as 
act  is  not,  as  a  matter  of  fact,  the  act  of  the  master,  in  any  sense, 
and_  should  not  be  deemed  to  be  so  as  a  matter  of  law.  As  to  it,  the 
relation  of  master  and  servant  does  not  exist  between  the  parties^ 
and  for  the  injury  resulting  to  a  third  person  from  it  the  servant 
alone  should  be  held  responsible.  Aycrigg's  Ex'rs  v.  Xew  York  & 
Erie  R.  R.  Co.,  30  K  J.  Law,  460;  Rounds  v.  Del.,  Lack  &  West. 
R.  R.  Co.,  64  N.  Y.  129 ;  Bowler  v.  O'Connell,  162  Mass.  319. 

The  decision  of  this  court  in  the  case  of  Bittle  v.  Camden  &  Atlan- 
tic R.  R.  Co.,  55  N.  J.  Law,  615,  is  in  no  wise  opposed  to  this  view. 
In  that  case  the  defendant  company  was  held  responsible  to  the  plain- 
tiff for  injuries  received  by  him  through  the  running  away  of  his 
horse,  the  animal  having  been  frightened  at  the  blowing  of  the 
whistle  upon  one  of  the  defendant  company's  locomotives  by  the 
engineer.  The  statute  of  the  state  in  force  at  the  time  of  the  accident 
required  that  a  whistle  should  be  blown  or  a  bell  rung  upon  the  engine 
whenever  a  train  reached  a  point  300  yards  distant  from  a  highway 
crossing.  The  defendant  company's  train  was  approaching  a  highway 
,    crossing  at  the  time  when  the  whistle  was  blown,  and  the  opinion 


CHAP.   XXI.]  LIABILITY    FOR   TORTS   OF   SERVANT.  653 

states  (page  620,  55  N.  J.  Law)  that,  "  upon  review  of  this  case,  the 
conclusion  is  that,  under  the  statute  authorizing  the  points  and  dis- 
tances at  and  for  which  either  a  whistle  shall  be  blown  or  a  bell  rung, 
the  defendant  had  a  right  to  blow  the  whistle  at  this  point."  Mani- 
feeth',  if  the  defendant  had  this  right,  it  was  because  the  statute 
imposed  upon  it  the  duty  of  doing  so,  and  the  performance  of  that 
duty  rested  upon  the  agent  of  the  company  who  was  operating  the 
engine.  The  plaintiff's  claim  was,  and  his  proofs  showed,  that  the 
compan3r's  engineer,  having  observed  that  the  plaintiff's  horse  had 
become  frightened  and  almost  unmanageable  at  the  approach  of  the 
train,  wantonly  and  maliciously  blew  an  extraordinarily  loud  and 
shrill  blast  upon  the  whistle,  for  the  purpose  of  still  further  frighten- 
ing the  animal.  The  conclusion  reached,  that  the  company  was 
responsible,  was  the  necessary  result  of  the  application  of  the  first 
branch  of  the  rule  laid  down  in  Holler  v.  Ross,  namely,  that  the 
master  is  responsible  for  injuries  resulting  from  an  act  done  by 
his  servant  within  the  scope  of  the  latter's  employment,  without 
regard  to  whether  the  act  was  done  negligently  or  even  mali- 
ciously. The  blowing  of  the  whistle  at  the  point  where  the  company's 
engineer  blew  it  was  a  part  of  the  duty  which  he  was  employed  to 
perform,  and  it  was  because  of  that  fact  that  the  rule  of  respondeat 
superior  was  applicable.  If  the  engineer,  in  the  case  referred  to,  had 
maliciously  increased  the  fright  of  the  plaintiff's  horse  by  throwing 
lumps  of  coal  at  him  from  the  tender  while  the  train  was  passing 
by,  this  act  would  as  plainly  not  have  been  within  the  scope  of  his 
employment  (notwithstanding  that  the  coal  was  furnished  him  by  the 
employer  to  be  used  in  the  employer's  business),  as  his  act  in  blow- 
ing the  whistle  was  within  it.  For  the  one  act  the  master  would  not 
be  responsible ;  for  the  other,  he  would  be. 

Turning  again  to  the  case  now  under  review:  If  the  act  of  the 
defendant's  son  in  throwing  water  upon  the  plaintiff's  horse  was  not ' 
tte  result  of  his  careless  handling  of  the  garden  hose  while  sprink- 
fing  his  father's  lawn,  but  was  deliberately  done  by  him,  purely  out 
of  a  spirit  of  mischief,  for  the  purpose  of  frightening  the  animal,  the^ 
fact  that  he  used  the  tool  supplied  to  him  for  the  doing  of  his  father's 
work  for  the  accomplishment  of  his  own  mischievous  purpose  did  not 
make  it  an  act  within  the  scope  o?  his'employment,  and  did  not 
render  the  defendant  liable  for  the  injury  resulting  therefrom. 

The  instruction  complained  of  was  erroneous,  and  for  this  reason 
the  judgment  under  review  should  be  reversed.  "* 


.4^   /v^ 

554.  ~ 


J^       654    'A        ALSEVEB   V.    MINNEAPOUS   &  ST.    L.    li.    CO.       [CHAP.   XXI. 


V   ^  ALSEVEK  V.   MINNEAPOLIS   &   ST.   L.   E.   CO. 

\  ^  115  Iowa,  338.     1902. 

U,  .  Action  to  recover  damages  for  personal  injuries.     From  a  judg- 
/  ^inent  for  plaintiff,  defendant  appeals. 
^         Ladd,   C.  J.     The  defendant's  train  had  stopped   at  Bumside 
T        shortly  after  12  o'clock  m.,  May  25,  1899.    Attached  to  the  engine  was 
a  device  known  as  the  "  Mcintosh  Blow-Off  Cock,"  used  for  the  pur- 
pose of  cleansing  the  boiler  of  sediment  by  forcing  water  through  it 
from  the  bottom  at  great  pressure.    At  that  time  the  plaintiff,  then 
eight  years  old,  was  standing,  with  other  children,  on  the  side  of  the 
corncrib,  about  7  feet  above  the  ground,  and  some  20  feet  from  the 
J''      engine,  looking   at  it  through  an  opening.    In  operating  the  blow-off 
cock,  hot  steam  or  spray  was  thrown  on  the  crib,  and  possibly  on  plain- 
tiff, thereby  so  frightening  her  that  she  fell,  breaking  a  leg.     Her 
ts,     screams  immediately  brought  her  father.  Cox,  and  the  engineer.    The 
y        father  testified.  .  .  .  "  Q.  What,  if  anything,  was  said  by  the  engineer 
at  that  time  in  reference  as  to  how  the  accident  happened?    A.    He 
says,  *  J  was  only,  having  a  little  fun  with  the  children.'  .  .  .  He  said 
V        he  had  no  idea  of  hurting  the  children,  —  just  for  the  idea  of  having 
J         a  little  sport  with  them,  or  fun;   that. he  was  just  going  to  have  a 
^  Uttle  sport  with  the  children.  .  .  .    The  evidence  of  Cox  was  to  the 
Vj^     same  effect.  .  .  . 

»^         The  engineer  testified  that  ordinarily  he  operated  the  blow-off  cock 
^    ten  times  a  day,  and  that  in  doing  so  on  this  occasion  he  did  not  notice 
the  children.     The  defendant  requested  the  following  instruction, 
which  was  Tefuse13):  "  If  you  find  from  the  evidence  that  the  defend- 
ant's servants  were  not  using  the  blow-off  cock  for  the  purpose  jof 
■*'     cleansing  the  boiler  of  defendant's  engine,  but  solely  for  a  purpose^of 
j/      •  their  own,  —  for  their  own  amusement,  and  for  the  purpose  of  fright- 
ening the  plaintiff  and  the  other  children  with  her  —  the  plaintiff 
cannot  recover  in  this  action." 

The  engineer  was  in  charge  of  the  engine,  and  had  control  of  the 
blow-off  cock.  How  often  and  when  to  make  use  of  it  wa^  necessarily 
left  to  his  judgment.  All  that  was  exacted  of  him  was  that  in  doing 
so  he  exercise  ordinary  care.  In  blowing  off  the  steam  he  was  acting 
within  the  scope  of  his  employment.  The  negligence  consisted  in 
the  manner  and  place  of  doing  so.  There  was  no  departure  from  his 
employment,  —  merely  failure  to  exercise  care  in  doing  what  he  was 
authorized  to  do.  Says  Prof.  Wharton :  "  It  may  have  contravened 
the  master's  purposes  or  direction ;  but  a  master  who  puts  in  action  a 
train  of  servants,  subject  to  all  the  ordinary  defects  of  human  nature, 
can  no  more  escape  liability  for  injury  caused  by  such  defects  than 
can  a  master  who  puts  machinery  in  motion  escape  liability,  on  the 


CHAP.   XXI.]  LIABILITY   FOR   TORTS   OF   SERVANT.  655 

ground  of  good  intentions,  from  injuries  occurring  from  defects  of 
machinery.  Out  of  the  servant's  orbit,  when  he  ceases  to  be  a  servant, 
his  negligences  are  not  imputable  to  the  master;  but  within  that 
orbit  they  are  so  imputable,  whatever  the  master  may  have  meant." 
Whart.  Neg.  §  160. 

In  Railway  Co.  v.  Shields,  47  Oh.  St.  387,  an  employee  placed  tor- 
pedoes, used  for  signals,  on  the  track  in  front  of  the  wheels  of  the 
caboose  in  which  lady  passengers  were  riding,  with  the  purpose  of 
frightening  them  by  their  explosion  when  being  passed  over.  One  of 
them  was  afterwards  found  on  the  track  by  some  boys,  who  caused  it 
to  explode  by  hitting  it,  and  injured  one  of  them.  In  the  course  of 
the  opinion,  affirming  the  company's  liability,  the  court  said :  "  It 
is  necessary  in  this  and  all  similar  cases  to  distinguish  between  the 
departure  of  a  servant  from  the  employment  of  the  master,  and  his 
departure  from  or  neglect  of  a  duty  connected  with  that  employment. 
A  servant  may  depart  from  his  employment  without  making  his 
master  liable  for  his  negligence  when  outside  of  the  employment  of 
the  master,  and  he  so  departs  whenever  he  goes  beyond  the  scope  of  his 
employment  and  engages  in  afPairs  of  his  own,  but  he  cannot  depart 
from  the  duty  intrusted  to  him  when  that  duty  regards  the  rights  of 
others  in  respect  to  the  employment  of  dangerous  instruments  by  the 
master  in  the  prosecution  of  his  business,  without  making  the  master 
liable  for  the  consequences;  for  the  first  step  in  that  direction  is  a 
breach  of  the  duty  intrusted  to  him  by  the  master,  and  his  negligence 
in  this  regard  becomes  at  once  the  negligence  of  the  master.  Other- 
wise the  duty  required  of  the  master  in  respect  to  the  custody  of  such 
instruments  employed  in  his  business  may  be  shifted  from  the  master 
to  the  servant,  which  cannot  be  done  so  as  to  exonerate  the  master 
from  the  consequences  of  neglect  of  duty." 

In  Andrews  v.  Railway  Co.,  77  Iowa,  669,  a  fireman  had  been  left 
to  watch  the  engine,  and  while  doing  so  unnecessarily  blew  off  the 
steam ;  and  an  instruction  that  if,  "  while  so  in  charge  or  while  em- 
ployed in  the  discharge  of  his  duties  as  fireman,  he  negligently  or 
wilfully  let  off  steam,  and  thereby  frightened  plaintiff's  horses,  and 
injured  plaintiff,  the  defendant  was  liable,"  was  approved.  See,  also^ 
Railway  Co.  v.  Boettcher,  131  Ind.  82 ;  Brendle  v.  Spencer,  37  S.  C. 
194;  Cobb  v.  Railway  Co.,  125  N.  C.  474;  Railroad  Co.  v.  Dickson, 
63  111.  152. 

In  Railroad  Co.  v.  Harmon,  47  111.  299,  the  plaintiff  checked  his 
team  to  allow  the  locomotive  to  pass,  but,  instead,  it  stopped;  and, 
though  the  engineer  noticed  the  horses  were  afraid,  he  unnecessarily 
and  wantonly  let  off  steam.  It  was  contended  in  that  case,  as  in  this, 
that  the  act  was  wanton  and  wilful  and  outside  of  his  authority,  and 
that  the  company  was  not  liable.  Answering  this  contention,  the  court 
said :  "  He  was  their  servant,  —  was  engaged  in  the  performance  of 
the  duty  assigned  to  him;    and  if,  while  so  engaged,  he  used  the 


656  ALSEVER   V.   MINNEAPOLIS   A  ST.   L.    R.    CO.       [CHAP.   XXI. 

engine  put  into  his  possession  and  under  his  control  to  accomplish 
the  wanton  or  wilful  act  complained  of,  why  should  not  the  company 
be  held  liable  ?  It  is  said  that  he  was  not  employed  for  the  purpose, 
nor  directed  to  perform  the  act;  and  it  is  equally  true  that  they 
do  not  employ  engineers  to  inflict  injuries  through  negligence  or  in- 
competency, and  yet  these  bodies  are  held  liable  for  such  acts  of  their 
servants.  .  .  .  But  when  employed  in  the  discharge  of  his  duty,  or 
while  engaged  in  operating  their  engines  and  machinery  on  their  road, 
if  he  uses  such  agencies  in  an  unskilful  manner  or  so  negligently  as 
to  occasion  injury  to  another,  or  even  if  while  so  engaged  he  wilfully 
perverts  such  agencies  to  the  purpose  of  wanton  mischief  and  injury, 
the  company  should  respond  in  damages.  They  should  not  be  per- 
mitted to  say,  '  It  is  true  he  was  an  agent,  was  authorized  by  us  to 
have  possession  of  our  engines,  was  engaged  in  carrying  on  our  busi- 
ness, and  while  so  engaged  he  wilfully  perverted  the  instruments 
which  we  placed  in  his  hands  to  something  more  than  that  de- 
signed or  authorized,  and  therefore  we  should  not  be  liable  for  the 
injury  thus  inflicted.'  In  this  case,  so  far  as  the  record  discloses, 
the  engineer  was  properly  engaged  in  the  use  of  the  machinery  of  the 
company ;  and  it  can  make  no  difference  whether  the  escape  of  steam 
was  negligently  permitted  or  wilfully  done  by  the  engineer,  any  more 
than  if  he  had  wilfully  run  his  engine  against  appellee's  wagon  and 
team,  and  thus  produced  the  injury.  The  question  whether  or  not 
it  was  negligently  done  can,  we  think,  make  no  difference  in  the 
results." 

If  the  company  may  be  held  liable  for  an  injury  caused  by  the 
engineer  blowing  off  steam  or  a  whistle  to  purposely  frighten  a  team, 
as  many  authorities  hold,  it  is  not  perceived  on  what  principle  sujch 
liability  shall  be  denied  when  this  is  done  to  frighten  children.  See  2 
Thomp.  Neg.  §  1910  et  seq. 

We  think  the  true  test  that  stated  by  Judge  Cooley  in  his  work  on 
Torts  (page  536)  :  "The  test  of  the  master's  liability  is  not  the 
motive  of  the  servant,  but  whether  that  which  he  did  was  something 
which  his  employer  contemplated,  and  something  which,  if  he  could 
do  it  lawfully,  he  might  do  in  the  employer's  name." 

It  was  part  of  the  engineer's  duty  to  use  this  blow-off  cock.  For 
all  the  record  discloses,  he  may  then  have  been  operating  it  to  cleanse 
the  boiler.  There  is  no  evidence  to  the  contrary.  Whether  inciden- 
tally to  cleansing  it  he  engaged  in  the  diversion  of  frightening  the 
children,  or  blew  off  the  steam  or  spray  for  that  express  purpose, 
-however,  we  think,  can  make  no  difference.  The  company  had  placed 
in  his  charge  an  instrumentality  requiring  care  in  its  operation  and 
management.  He  was  doing  precisely  what  the  company  contemplated 
he  should  do  when  it  employed  him,  i.e.  operating  the  blow-off  cock. 
WTien  this  was  to  be  done,  and  how,  as  said,  was  left  to  his  discretion, 
the  use  of  which  was  also  contemplated  in  his  employment;  and  the 


CHAP.   XXI.]  LIABILITY   FOE  TORTS  OF  SERVANT.  657 

company  was  as  responsible  for  a  mistake  or  wilful  perversion  of 
judgment  in  its  operation,  if  within  the  compass  of  what  he  was  to 
do,  when  amounting  to  negligence,  as  for  his  negligence  in  doing 
that  which  may  be  conceded  to  have  been  necessary.  Rounds  v. 
Railway  Co.,  64  N.  Y.  129;  Cooley,  Torts,  p.  534. 

This  is  well  illustrated  by  the  case  of  Cobb  v.  Railway  Co.,  37  S.  C. 
194,  15  S.  E.  878,  where  the  company  was  declared  liable  for  the 
misconduct  of  the  engineer  in  wilfully  or  wantonly  blowing  off  steam 
80  as  to  scare  a  horse  and  cause  it  to  run  away,  but  not  for  the  mis- 
conduct of  the  trainmen,  contributory  thereto,  by  shouting.  The 
engineer  was  doing  that  which  he  might,  but  for  the  proximity  of 
the  horse,  lawfully  do  within  the  scope  of  his  employment.  Train- 
men were  under  no  circumstances  engaged  to  do  what  they  did.  The 
one  thing  was  done  within  the  master's  business ;  the  other,  without. 
And  on  this  principle  Kincade  v.  Railway  Co.,  107  Iowa,  682,  and 
Marion  v.  Railway  Co.,  59  Iowa,  430,  are  to  be  distinguished  from  the 
case  at  bar. 

Stephenson  v.  Southern  Pac.  Co.,  93  Cal.  558,  relied  on  by 
appellant,  is  not  in  harmony  with  the  authorities  heretofore  cited, 
and  does  not  meet  our  approval. 

We  think  the  instruction  properly  refused,  and  that  the  judgment 
should  be  affirmed. 

Weaver,  J.,  took  no  part.^ 

'  "  So  the  situation  to  be  considered  upon  the  motion  Is  this :  The  defendant 
placed  these  dangerous  explosives  in  the  custody  of  Its  servant,  to  be  placed  on  tlig 
track  in  certain  contingencies  as  a  warning  to  approaching  trains.  The  servant. 
however,  placed  one  on  the  track  when  not  contemplated  ])v  the  emnlover.  evidently 
for  his  own  amusement,  and  in  dangerous  proximity  to  third  persons,  and  moved  the 
€nginj_oyer  it,  causing  it  to  exnlode.  and  inflict  injury  on  one  of  such  persons; 
qjd  the_guestion  is  whether  a  verdict  for  the  injured  person  against  the  principal 
^fln  "1>^  sii^t"'"'"^  ""f'p'-  s"^h  rirpnmst;fi^f»!r  We  tnink  tflis  question  mUHl  |)e 
answered  in  the  aflirmatlve.  The  principle  that  a  master  is  not  responsible  for 
the  torts  of  his  servant  when  the  servant  has  departed  from  his  employment  is 
well  understood.  If  this  principle  were  as  easy  of  application  as  it  is  of  statement, 
we  should  have  little  difficulty ;  but,  like  many  another  simple  and  plain  principle. 
Its  application  to  concrete  facts  is  sometimes  very  difficult.  The  question,  gener- 
ally. Is  whether  the  servant  has  departed  from  his  employment,  or  whether  he  has 
departed  from  or  neglected  a  duty  in  the  line  of  that  employment.  In  the  first  case 
the  principal  Is  not  responsible  for  his  acts,  and  in  the  second  case  he  is.  Applying 
the  principle  to  the  present  case,  supposing  that  the  jury  had  found  that  the 
engineer  placed  the  torpedo  on  the  track.  It  seems  quite  plain  that  a  verdict 
for  the  plalntlft  might  be  sustained.  The  engineer's  duty  was  to  operate  the 
engine ;  to  take  care  of  the  torpedoes,  and  see  that  they  were  used  only  at  proper 
times  and  places.  "gifLl!2I"T'ft^y  ^"'^  placed  In  his  charge  these  dangerous  agencies. 
and  authorized  hlm~to  use  them  at  proper  times.  In  placing  one  of  _them  upon 
the  track  as  he  did,  he  was  doing  what  the  company  had  dii;^ctTv~authorlzed  hinf 
to~goT  huj~he"  was  ncft  doing  it  at  the  time  or  place  authorize^  hv  the  mgafer 
He  was  not  beyond  the  scope  of  his  employment,  but  be  was  wllfuHv  or  wantonly 
violating  a  duty  resulting  from  nis  employment,  namelv.  his  duty  to  safely  kfpp 
and  properly  h^e  the  torpedoes.  There  have  been  many  cases  involving  thp  nppjj- 
catlon  of  this  principle,  and  they  cannot  be  said  to  be  entirely  harmonious  ;  h\^p 
the  principle  above  stated  is  believed  to  be  substantiated  bv  the  great  weight 
of^uthorlty.**    Eutlng  v.  Chicago  ^  N.  W.  E.  Co.,  116  Wis.  13,  17,  18. 


658  OBERTONI    V.    BOSTON    &    MAINE   RAILBOAD.       [CHAP.   Xil. 

OBEKTONI   V.   BOSTON   &   MAINE   EAILROAD. 

186  Mass.  481.     1904. 

Tort,  by  a  boy  eight  years  old  when  injured,  for  personal  injuriea 
caused  by  the  alleged  negligence  of  the  defendant  and  its  servants 
in  leaving  a  signal  torpedo  on  the  public  crossing  of  the  defendant's 
railroad  on  Furness  Street  in  North  Adams,  where  it  was  found  by 
the  plaintiff,  who,  believing  it  to  be  harmless,  took  it  home  and  cracked 
it  with  a  rock,  receiving  the  injuries  alleged. 

At  the  trial,  there  was  a  verdict  for  the  plaintiff ;  defendant  alleged 
exceptions. 

LoRiNG,  J.  The  evidence  in  this  case  warranted  a  finding  that  the 
plaintiff,  a  boy  of  eight  years  of  age,  found  a  signal  torpedo  on  the 
planking  of  a  railroad,  at  a  grade  crossing  of  a  highway;  that  he 
took  it  home  and,  not  knowing  the  danger,  cracked  it  with  a  rock 
and  was  hurt.  In  addition  there  was  the  testimony  of  one  Paris 
that  "  a  brakeman  threw  the  torpedo  to  the  flagman  at  the  crossing 
and  it  dropped  at  his  feet  as  he  did  not  catch  it;  that  the  flagman 
threw  it  back  to  the  brakeman  and  he  did  not  cateh  it  and  the  torpedo 
dropped  to  the  ground  " ;  that  "  after  the  train  went  by,  the  flagman 
went  back  to  his  covered  station  without  picking  it  up." 

The  defendant  contends  that  there  was  no  evidence  of  negligence  on 
its  part,  and  we  are  of  opinion  that  in  this  contention  it  is  right. 

The  plaintiff's  position  is  that  if  the  story  told  by  Paris  was  believed 
the  defendant  was  liable,  and  he  relies  on  Harriman  v.  Railway  Co., 
45  Ohio  St.  11,  in  support  of  that  contention,  to  which  may  be  added 
the  subsequent  case  of  Railway  jCo.  v.  Shields,  47  Ohio  St.  387,  as 
cases  of  the  highest  court  of  another  state. 

But  we  are  of  opinion  that  if  the  torpedo  came  to  and  was  left 
on  the  planking  in  the  way  testified  to  by  Paris  the  defendant  is  not 
liable,  and  for  the  reason  that  the  jury  were  not  warranted  in  finding 
that  the  brakeman  and  flagman  in  throwing  the  torpedo  back  and 
forth  and  leaving  it  on  the  crossing  were  acting  in  the  course  of  their 
employment.  There  is  nothing  in  the  evidence  in  this  case,  or  in  the 
common  knowledge  of  mankind,  as  to  railroad  signal  torpedoes,  which 
would  make  it  the  duty  of  the  brakeman  to  throw  a  torpedo  to  a 
flagman.  All  that  was  declared  as  to  the  use  of  .railroad  torpedoes 
in  evidence  in  this  case  was  that  "  signal  torpedoes  were  used  by 
railroads  in  signalling,  being  fastened  upon  the  rails  and  containing 
an  explosive."  There  was  nothing  in  the  evidence  showing  that  it 
belonged  to  a  flagman  at  a  railroad  crossing  to  signal  trains  by  tor- 
pedoes or  otherwise,  much  less  is  that  within  the  common  knowledge 
of  mankind.  If  the  use  of  railroad  torpedoes  is  a  fact  within  such 
common  knowledge  at  all,  the  flagman  has  nothing  whatever  to  do 


CHAP.   XXI.]  LIABILITY  FOE  TORTS  OP  SERVANT.  659 

with  signalling  trains  or  with  torpedoes.  The  case  comes  within 
the  rule  laid  down  in  Howe  v.  Newmarch,  12  Allen,  49,  which  was 
applied  in  Hankinson  v.  Lynn  Gas  &  Electric  Co.,  175  Mass.  271,  and 
sBrown  v.  Boston  Ice  Co.,  178  Mass.  108.  See,  also,  McCarthy  v.  Tim- 
mins,  178  Mass.  378. 

The  two  cases  from  Ohio  relied  on  by  the  plaintiff  in  the  case  at 
bar  are  entitled  to  great  consideration  as  cases  of  the  highest  court 
of  another  state ;  but  after  a  careful  consideration  of  them,  we  are  of 
opinion  that  they  are  not  in  accordance  with  the  settled  law  of  this 
Commonwealth  and  should  not  have  been  followed  by  the  judge  pre- 
siding at  the  trial. 

[The  court  then  holds  that  the  fact  that  the  torpedo  was  found  on 
the  planking  was  not  presumptive  evidence  of  negligence.] 

Exceptions  sustained. 


660  KEENAN    V.   SOOTHWORTH.  [CHAP.   XXII. 


CHAPTEE   XXII. 

Liability  of  Public  Agencies  or  Public  Charities  for  Torts 

OF  Servants. 

KEENAN   V.   SOUTHWOKTH. 

110  Mass.  474.     1872. 

Tort  against  the  postmaster  of  East  Randolph,  to  recover  damages 
for  the  loss,  by  the  defendant's  negligence,  of  a  letter  addressed  to 
the  plaintiff.  At  the  trial  in  the  superior  court,  before  Pitman,  J., 
the  plaintiff  introduced  evidence,  not  now  necessary  to  report,  that  the 
letter  was  received  at  the  post-office  at  East  Randolph,  and  was  lost 
by  the  negligence  or  wrongful  conduct  of  one  Bird,  who  was  the  post- 
master's clerk.  The  plaintiff  having  disclaimed  "  any  actual  partici- 
pancy  or  knowledge  of  the  acts  of  Bird  on  the  part  of  the  defendant," 
the  judge  ruled  that  the  defendant  was  not  liable  for  any  careless, 
negligent,  or  wrongful  acts  of  Bird ;  and,  by  consent  of  the  plaintiff, 
he  directed  a  verdict  for  the  defendant,  and  reported  the  case  for  the 
consideration  of  this  court.  If  the  ruling  was  wrong,  the  verdict  to 
be  set  aside,  and  the  case  to  stand  for  trial ;  otherwise,  judgment  for 
the  defendant  on  the  verdict. 

Gray,  J.  The  law  is  well  settled  in  England  and  America,  that 
the  postmaster-general,  the  deputy  postmasters,  and  their  assistants 
and  clerks,  appointed  and  sworn  as  required  by  law,  are  public  offi- 
cers, each  of  whom  is  responsible  for  his  own  negligence  only,  and  not 
for  that  of  any  of  the  others,  although  selected  by  him,  and  subject  to 
his  orders.  Lane  v.  Cotton,  1  Ld.  Raym.  646 ;  S.  C.  12  Mod.  472 ; 
Whitfield  V.  Le  Despencer,  Cowp.  754 ;  Dunlop  v.  Munroe,  7  Cranch, 
242 ;  Schroyer  v.  Lynch,  8  Watts,  453 ;  Bishop  v.  Williamson,  2  Fairf . 
495 ;  Hutchins  v.  Brackett,  2  Foster,  252. 

The  ruling  at  the  trial  was  therefore  right ;  and  the  plaintiff,  hav- 
ing consented  to  a  verdict  for  the  defendant,  reserving  only  the  ques- 
tion of  the  correctness  of  that  ruling,  cannot  now  raise  the  question 
whether  there  was  sufficient  evidence  of  the  defendant's  own  negli- 
gence to  be  submitted  to  the  jury.  Judgment  on  the  verdict. 


CHAP.  XXII.]  LIABILITY  OF  PUBLIC  AGENCIES.  661 

ELY   V.   PAESONS. 

65  Conn.  83.     1887. 

Action  for  trespass  to  land  and  cutting  trees  and  shrubs  growing 
thereon. 

The  defence  set  up  was  —  1.  A  general  denial ;  2.  That  the  land 
upon  which  the  entry  was  made  was  a  public  highway,  which  it  was 
the  duty  of  the  selectmen  of  the  town  of  Enfield  to  keep  in  repair, 
and  commodious  and  safe  for  public  travel;  that  the  highway  was 
defective  by  reason  of  certain  small  trees  and  shrubs  which  grew  in  or 
overhung  the  travelled  path,  so  as  -to  annoy  and  endanger  public  travel 
upon  the  highway ;  and  that  the  defendant  as  a  selectman,  and  in  the 
line  of  his  duty,  directed  the  cutting  and  trimming  of  all  such  small 
trees  and  shrubs  within  the  limits  of  the  highway  as  might  be  neces- 
sary to  render  it  reasonably  safe  and  convenient  for  public  travel,  but 
did  not  authorize  or  direct  or  himself  commit  any  other  acts  whatever 
upon  the  land. 

Judgment  for  defendant,  and  plaintiff  appeals. 

LooMis,  J.  The  acts  constituting  the  trespass  complained  of  were 
committed  by  one  Button,  by  order  of  the  defendant  as  a  selectman 
of  the  town  of  Enfield,  and  consisted  of  the  cutting  of  certain  trees 
and  brush  along  an  alleged  highway  of  the  town.  .  .  . 

But  another  claim  of  law  remains  to  be  considered  —  whether 
the  defendant  was  liable  for  the  unnecessary  cutting  by  Button.  The 
defendant  directed  Button  "  to  cut  the  brush  and  trees  and  make  the 
road  passable  at  as  little  expense  as  possible."  .  .  . 

The  defendant  invokes  for  his  protection  the  rule  that  a  public 
officer  or  agent  is  responsible  only  for  his  own  misfeasance  or  neg- 
ligence, and  not  for  the  negligence  of  his  subaltern,  provided  the 
latter  is  competent  for  the  work.  Story  on  Agency,  §  321 ;  Wharton 
on  Agency,  §  550. 

Although  the  general  language  in  which  the  rule  is  stated  in  the 
books  may  at  first  seem  decisive  of  this  question,  yet  we  think  it  is  not 
applicable  to  this  case.  In  stating  the  proposition  that  the  principal 
is  not  liable,  a  qualification  stated  in  Story  on  Agency  (supra) y 
should  always  be  understood  —  that  is,  that  he  is  not  liable  unless  he 
directed  or  authorized  the  wrong.  Then  there  is  another  very  im- 
portant distinction,  to  the  effect  that  if  the  inferior  or  sub-agent  holds 
not  an  office  known  to  the  law,  but  his  appointment  is  private  and  dis- 
cretionary with  the  officer,  the  principal  is  responsible  for  his  acts. 
This  distinction  is  more  fully  stated  in  a  note  to  the  case  of  Wilson  v. 
Peverly,  in  1  American  Leading  Cases,  5th  edition,  side  p.  651,  top  p. 
785.1  ^  ^  ^ 

'  "  with  regard  to  the  responsibility  of  a  public  oflBcer  for  the  misconduct  or 
negligence  of  those  employed  by  or  under  him,  the  distinction  apparently  turns 


S62,  CULVER  V.   CITY  Of  STREATOR.  [CHAP.   XXII. 

In  the  case  at  bar,  upon  the  finding,  we  do  not  think  Button 
should  be  regarded  as  an  inferior  public  officer  or  agent,  but  ratlier 
as  acting  solely  under  the  defendant,  so  that  the  question  we  are 
considering  turns  on  the  authority  given  by  the  defendant  to  Button. 
There  was  of  course  no  express  authority  as  the  court  finds  to  do  un- 
necessary cutting,  but  there  was  express  authority  "  to  cut  the  brush 
and  trees  and  make  the  road  passable."  No  trees  were  pointed 
out,  no  limits  given,  no  restriction  of  any  kind  was  mentioned,  no 
indication  was  given  as  to  the  defendant's  own  judgment,  but  the 
work  was  all  committed  to  the  judgment  and  discretion  of  Button  as 
to  what  should  be  cut.  There  is  no  claim  or  suggestion  that  Button 
acted  maliciously  or  wantonly,  but  he  acted  on  his  own  judgment, 
just  as  in  eiffect  he  was  told  to  do,  and  so  we  may  say  he  acted  within 
the  scope  and  course  of  his  employment,  so  that  his  act  was  the 
defendant's  act.  .  .  •. 

We  conclude  that  there  was  error  in  holding  the  defendant  not 
liable  for  the  unnecessary  cutting,  which  would  give  the  plaintiff 
a  new  trial  if  the  court  had  not  found  that  the  damage  from  the  un- 
necessary cutting  was  merely  nominal. 

(From  certain  considerations  arising  out  of  the  fact  that  the 
damages  were  merely  nominal,  the  court  refused  to  grant  a  new  trial 
and,  accordingly,  affirmed  the  judgment  of  the  court  below.) 


CULVEE   V.    CITY   OF   STREATOE. 

130  111.  238.     1889. 

Mr.  Justice  Bailey  delivered  the  opinion  of  the  court:  We  are 
of  the  opinion  that  the  several  counts  of  the  amended  declara- 
tion, though  differing  somewhat  in  the  character  of  their  averments, 
all  call  for  the  application  of  the  same  principles.  The  fourth  count, 
which  is  fullest  in  its  allegations,  shows  that  the  injury  complained 
of  was  caused  by  the  negligent  act  of  a  party  employed  by  the 
city  of  Streator  to  enforce  a  municipal  ordinance  forbidding  the 
running  at  large  of  dogs  in  said  city  without  being  muzzled,  and 
providing  that  all  dogs  running  at  large  contrary  to  said  ordinance 
should  be  destroyed.  This  was  clearly  an  ordinance  passed  by  the 
city  in  the  exercise  of  its  police  powers,  and  the  injury  was  caused 
by  the  party  employed  to  enforce  such  police  regulations. 

The  third  count  alleges  that  the  injury  was  caused  by  the  negligent 

upon  the  question  whether  the  persons  employed  are  his  servants  appointed  volun- 
tarily and  privately,  and  paid  by  him,  and  responsible  to  him,  or  whether  they  are 
his  official  subordinates,  nominated  perhaps  by  him,  but  officers  of  the  government ; 
in  other  words,  whether  the  situation  of  the  inferior  is  a  public  office  or  a  private 
service.  In  the  former  case  the  official  superior  Is  not  liable  for  the  inferior's  acts ; 
in  the  latter  he  is."     1  Am.  Lead.  Cases,  651. 


CHAP.   XXII.]  LIABILITY   OF   PUBLIC   AGENCIES.  663 

and  careless  acts  of  the  servants  of  the  city  while  destroying  dogs 
running  at  large  contrary  to  a  city  ordinance;  and  the  first  and  second 
counts  allege,  in  substance,  that  the  injury  was  caused  by  tjje  negligent 
and  careless  acts  of  servants  hired  and  employed  by  the  city  to  shoot 
and  kill  dogs  at  large  in  the  city,  and  which  had  not  been  by  it  duly 
licensed.  The  matter  of  regulating  and  restraining  the  running  at 
large  of  dogs  by  a  municipal  corporation  manifestly  pertains  to  the 
police  power.  That  power  may  be  defined,  in  general  terms,  as  com- 
prehending the  making  and  enforcement  of  all  such  laws,  ordinances 
and  regulations  as  pertain  to  the  comfort,  safety,  health,  conven- 
ience, good  order  and  welfare  of  the  public,  and  all  persons  officially 
charged  with  the  execution  and  enforcement  of  such  police  ordinances 
and  regulations  are,  quoad  hoc,  police  officers. 

The  pleader,  in  drafting  the  declaration,  seems  to  have  endeavored 
to  obviate  the  conclusions  to  be  drawn  from  the  character  of  the  duties 
which  the  officer  in  question  was  performing  at  the  time  the  plain- 
tiff was  injured,  by  designating  and  describing  him  as  a  servant  or 
employee  of  the  city,  and  alleging  that  he  was  hired  and  employed 
by  the  city  to  perform  said  duties.  Merely  denominating  him  a 
servant  or  employee  does  not  make  him  such  in  a  sense  calling  for 
an  application  of  the  maxim,  respondeat  superior;  whether  he  was  a 
servant  or  employee  in  that  sense  depends  mainly  upon  whether  he 
was  employed  to  perform  acts  which  the  corporation  could  do  in  its 
private  or  corporate  character,  or  acts  which  the  corporation  was 
empowered  to  do  in  its  public  capacity  as  a  governing  agency,  and  in 
discharge  of  duties  imposed  for  the  public  or  general  welfare.  Acts 
performed  in  the  exercise  of  the  police  power  plainly  belong  to  the 
latter  class. 

Police  officers  appointed  by  the  city  are  not  its  agents  or  servants 
so  as  to  render  it  responsible  for  their  unlawful  or  negligent  acts 
in  the  discharge  of  their  duties.  Accordingly  it  has  been  held  that 
a  city  is  not  liable  for  an  assault  and  battery  committed  by  its  police 
officers,  though  done  in  an  attempt  to  enforce  an  ordinance  of  the 
city:  Butterick  v.  City  of  Lowell,  1  Allen,  172;  nor  for  illegal  and 
oppressive  acts  of  officers  committed  in  the  administration  of  an 
ordinance :  Board  of  Trustees  v.  Schroeder,  58  111.  353 ;  nor  for  an 
arrest  made  by  them  which  is  illegal  for  want  of  a  warrant :  Pollock's 
Administrators  v.  City  of  Louisville,  13  Bush,  221 ;  Cook  v.  City  of 
Macon,  54  Ga.  468 ;  Harris  v.  City  of  Atlanta,  62  id.  290 ;  nor  for 
their  unlawful  acts  of  violence,  whereby,  in  the  exercise  of  their 
duty  in  suppressing  an  unlawful  assemblage,  an  injury  is  done  to  the 
property  of  an  individual :  Stewart  v.  New  Orleans,  9  La.  Ann.  461 ; 
Dargan  v.  City  of  Mobile,  31  Ala.  469. 

Upon  the  same  principle  it  has  been  held  that  a  city  having  power 
to  establish  a  fire  department,  to  appoint  and  remove  its  officers,  and 
to  make  regulations  in  respect  to  their  government  and  the  manage- 
ment of  fires,  is  not  liable  for  the  negligence  of  the  firemen  appointed 


664  WELSH    V.    VILLAGE   OF   EUTLAND.  [CHAP.    XXII. 

and  paid  by  it,  who,  when  engaged  in  the  line  of  their  duty,  upon  an 
alarm  of  fire,  run  over  the  plaintiff,  on  their  way  to  the  fire :  Haf- 
ford  V.  New  Bedford,  16  Gray,  297;  Wilcox  v.  City  of  Chicago,  107 
111.  334 ;  nor  for  an  injury  to  the  plaintiff  caused  by  the  bursting  of 
a  hose  of  one  of  the  engines  of  the  city,  through  the  negligence  of  a 
member  of  the  fire  department :  Fisher  v.  City  of  Boston,  104  Mass. 
87;  nor  for  negligence  whereby  sparks  from  the  fire  engine  of  the 
city  caused  the  plaintiff's  property  to  be  burned:  Hays  v.  City  of 
Oshkosh,  33  Wis.  314.  In  like  manner  it  is  held  that  where  a  city, 
under  authority  of  law,  establishes  a  hospital,  it  is  not  liable  to 
persons  injured  by  the  misconduct  of  its  agents  and  employees 
therein:  City  of  Eichmond  v.  Long's  Administrators,  17  Gratt. 
375.  See  also  2  Dillon  on  Municipal  Corporations,  sees.  973-975,  and 
authorities  cited  in  notes. 

The  ground  upon  which  the  foregoing  cases,  and  many  others  of 
like  nature,  are  admitted  as  exceptions  to  the  general  rule  of  corporate 
liability,  is,  that  in  those  matters  the  city  acts  only  as  the  agent  of  the 
state,  in  the  discharge  of  duties  imposed  by  law  for  the  promotion  and 
preservation  of  the  public  and  general  welfare,  as  contradistin- 
guished from  mere  corporate  acts,  having  relation  to  the  manage- 
ment of  its  corporate  or  private  concerns,  and  from  which  it  derives 
some  special  or  immediate  advantage  or  emolument  in  its  corporate 
or  private  character. 

The  police  regulations  of  a  city  are  not  made  or  enforced  in  the 
interest  of  the  city  in  its  corporate  capacity,  but  in  the  interest  of 
the  public.  A  city,  therefore,  is  not  liable  for  the  acts  of  its  officers 
in  attempting  to  enforce  such  regulations.  Caldwell  v.  Boone,  51 
Iowa,  687 ;  Prather  v.  Lexington,  13  B.  Mon.  559 ;  Elliott  v.  Phila- 
delphia, 75  Pa.  St.  347;  Board  of  Trustees  v.  Schroeder,  supra. 

The  injuries  complained  of  in  the  declaration  having  been  caused 
by  the  negligence  of  an  officer  or  employee  of  the  city  while  attempt- 
ing to  enforce  a  police  regulation,  the  maxim  respondeat  superior 
does  not  apply,  and  the  demurrer  to  the  declaration  therefore  was 
properly  sustained.  The  judgment  of  the  Appellate  Court  will  be 
affirmed.  Judgment  affirmed.^ 


WELSH   V.   VILLAGE    OF   EUTLAND. 

56  Vt.  228.     1883. 

Action  on  the  case  to  recover  damages  for  injuries  received  by 
Mary  Welsh,  the  wife  of  the  plaintiff,  Michael  Welsh,  caused  by 
slipping  down  upon  the  ice  in  the  village  of  Eutland.  The  jury  fail- 
ing to  agree,  the  court  directed  a  verdict  for  the  defendant. 

•  Accord :    Whitfield  v.  City  of  Paris,  84  Tex.  431. 


CHAP.   XXII.]  LIABILITY   OF   PUBLIC   AGENCIES.  665 

The  opinion  of  the  court  was  delivered  by 

EoYCE,  Ch.  J.  By  its  charter  the  village  of  Eutland  is  empowered : 
"To  provide  for  the  preservation  of  buildings  from  fires  by  pre- 
cautionary measures  and  inspections,  and  to  establish  and  regulate 
a  fire  department  and  fire  companies  " ;  also  "  to  provide  a  supply 
of  water  for  the  protection  of  the  village  against  fire  and  for  other 
purposes,  and  to  regulate  the  use  of  the  same."    Charter,  s.  11.  .  .  . 

In  pursuance  of  this  authority  the  village,  by  ordinance,  established 
a  fire  department.  .  .  . 

Under  the  authority  of  its  charter,  as  amended,  and  by  vote  of  the 
village,  the  village  provided  for  a  supply  of  water,  for  public  and 
private  use,  laid  water-pipes  through  the  streets  and  supplied  them 
with  hydrants  for  use  in  case  of  fire. 

The  declaration  in  this  case  sets  forth  the  authority  of  the  village 
to  "  construct,  maintain,  increase,  improve,  repair,  and  keep  in  repair 
reservoirs,  aqueducts,  water-courses,  and  water-pipes  for  public  and 
private  uses  in  said  village " :  and  counts  upon  an  injury  to  the 
female  plaintiff  by  reason  that  the  defendant  did  "  carelessly  and 
negligently  maintain,  amend,  and  repair  said  aqueduct,  water-pipe, 
and  water-course,  and  carelessly  and  negligently  leave  the  same  out 
of  repair." 

The  facts,  so  far  as  material,  appear  to  be  that  a  certain  hydrant, 
connected  with  the  aqueduct  pipe,  having  become  frozen,  one  Davis, 
who  was  first  assistant  engineer  of  the  fire  department,  acting  under 
the  direction  of  the  chief  engineer,  reported  its  condition  to  the  vil- 
lage trustees  and  was  by  them  directed  to  thaw  out  the  same  at  the 
expense  of  the  village.  This  he  proceeded  to  do,  using  for  the  pur- 
pose the  steam  fire-engine  belonging  to  the  fire  department  and  with 
the  aid  of  assistants,  all  being  paid  by  the  village  for  their  services. 
The  water,  which  was  allowed  to  escape  from  the  hydrant  in  order  t* 
clear  it  of  broken  ice,  froze  in  the  street,  and  the  female  plaintiff,, 
falling  thereon,  sustained  the  injuries  complained  of.  It  further 
appeared  that  the  water-works  and  fire  departments  are  distinct  and 
are  managed  by  different  oflScers.  '  The  former  is  a  source  of  large 
revenue,  paid  by  individuals  for  the  use  of  the  water,  and  is  in  charge 
of  water  commissioners,  who  defray  the  expenses  from  this  revenue, 
the  works  being  the  property  of  the  village ;  the  latter  has  no  income, 
but  is  a  source  of  expense  which  is  paid  by  the  village,  under  the 
general  authority  and  direction  of  the  board  of  trustees. 

The  evidence  having  been  closed,  the  defendant  moved  for  a  ver- 
dict on  the  grounds  (1)  that  the  plaintiffs  upon  their  declaration 
could  not  recover ;  .  .  .  and  (3)  that  whatever  act  was  done,  was  done 
by  the  fire  department  of  said  village,  for  the  acts  of  which  the  village 
was  not  liable.  The  court  overruled  this  motion  so  far  as  to  submit 
the  question  of  negligence  to  the  jury,  and  if  negligence  was  found, 
the  amount  of  damages.    The  jury  failing  to  agree,  the  court  there- 


666  WELSH   V.   VILLAGE   OP   RUTLAND,  [CHAP.   XXII. 

upon  directed  a  verdict  for  the  defendant,  to  which  the  plaintiffs 
excepted,  as  also  to  the  overruling  of  their  motion  to  set  aside  the 
verdict  and  for  a  new  trial.  Upon  these  exceptions  the  case  comes 
to  this  court.  .  .  . 

We  therefore  come  to  the  question  raised  by  the  first  and  third 
grounds  of  the  motion,  namely,  whether  or  not  the  defendant  is  liable 
in  this  action.  In  considering  this,  the  state  of  the  case,  of  course, 
requires  that  we  treat  as  established  the  plaintiff's  allegation  that 
the  repairing  or  thawing  out  of  the  hydrant  was  done  in  a  careless 
and  negligent  manner. 

The  question  of  the  liability  of  quasi  corporations  for  the  negli- 
gence, non-feasance  or  misfeasance  of  the  officers  and  agents  through 
whose  instrumentality  their  various  functions  are  performed,  is  one 
of  some  difficulty  and  delicacy,  and  is  obscured  by  a  great  number 
of  decisions,  particularly  in  this  country,  which  are  at  least  apparently 
conflicting  and  irreconcilable.  This  conflict,  however,  will  be  found 
due,  upon  closer  examination,  not  so  much  to  any  ambiguity  in  the 
legal  principles  which  it  is  our  duty  under  the  system  of  Jurispru- 
dence which  obtains  in  this  state  to  apply,  as  to  the  fact  that  while 
some  courts  have  followed  the  doctrines  of  the  common  law,  others 
have  leaned  more  to  the  civil  law;  or  else  their  decisions  have  been 
based  on  statutory  provisions,  or  some  analogy  to  the  local  organic 
law  or  custom. 

At  common  law  it  has  been  a  settled  principle  ever  since  the  lead- 
ing case  of  Kussell  v.  Men  of  Devon,  3  Term,  667,  decided  by  Lord 
Kenyon  in  1788,  that  an  individual  cannot  sustain  an  action  against 
a  political  subdivision  of  the  state  based  upon  the  misconduct  or 
non-feasance  of  public  officers.  The  reasons  assigned  in  the  earlier 
cases  were  that  the  maxim  which  declares  it  better  for  the  individual 
to  suffer  than  for  the  public  to  be  inconvenienced,  is  stronger  than 
the  other  principle,  that  for  every  injury  the  law  gives  a  remedy, 
and  that  the  plaintiff  might  levy  his  execution  upon  the  property 
of  any  individual  inhabitant  —  the  organization  having  no  fund 
legally  applicable  to  its  payment  —  thus  giving  rise  to  multiplicity 
of  actions  to  enforce  contribution  and  great  public  annoyance.  But 
the  more  modern  and  broader  ground  is  said  to  be,  that  these  quasi 
corporations  are  mere  instrumentalities  for  the  administration  of 
public  government  and  the  collection  and  disbursement  of  public 
moneys,  raised  by  taxation  for  public  uses,  and  which  cannot  lawfully 
be  applied  to  the  liquidation  of  damages  caused  by  wrongful  acts  of 
their  officers.  Eiddle  v.  Proprietors,  7  Mass.  187 ;  Mower  v.  Leicester, 
9  Id.  247 ;  Coolidge  v.  Brookline,  114  Id.  596 ;  Com'rs  v.  Mighels, 
7  Ohio  St.  109 ;  Findlater  v.  Duncan,  McL.  «&  E.  911. 

This  rule  of  exemption  extends,  necessarily,  to  municipal  corpora- 
tions so  far  as  the  reason  of  it  applies,  and  that  is  so  far  as  the  acts 
done  are  governmental  and  political  in  their  character  and  solely 


CHAP.    XXII.]  LIABILITT   OF   PUBLIC   AGENCIES.  667 

for  the  public  benefit  and  protection;  or  the  negligence  or  non- 
feasance are  in  respect  of  the  same  matters.  Instances  of  this 
non-liability  may  be  found  in  2  Thompson  on  N'egligence,  731,  and 
in  numerous  cases.  The  immunity  goes  a  step  farther  and  protects 
such  corporations  in  a  total  neglect  to  perform  certain  functions 
M'hich  are  concededly  for  the  public  benefit  and  convenience.  No 
action  can  be  maintained  against  a  municipal  corporation  by  an  in- 
dividual, no  matter  how  great  an  injury  he  might  be  able  to  show, 
for  the  neglect  to  build  sewers  or  water-works,  or  for  defects  or 
insufficiencies  in  the  plans  adopted  for  these  or  other  public  improve- 
ments; and  this  is  upon  the  ground  that  in  such  matters  the  cor- 
poration is  discharging  a  legislative  or  qitasi  judicial  function,  and 
its  action  is  not  reviewable  by  the  law  courts.  If  the  plan  adopted 
for  the  construction  of  such  public  works  is  not  necessarily  injurious 
or  dangerous  to  private  interests,  and  is  executed  with  reasonable 
skill  and  prudence,  the  protection  against  liability  is  absolute.  Lan- 
sing V.  Toolan,  37  Mich.  153 ;  35  Id.  296 ;  34  Id.  25 ;  Merrifield  v. 
Worcester,  110  Mass.  216;  104  Id.  15;  4  Allen,  41;  6  Gray,  546; 
13  Id.  194;  Van  Pelt  v.  Davenport,  42  Iowa,  308;  Carr  v.  Northern 
Liberties,  35  Pa.  St.  324.  And  the  same  rule  applies  to  the  action 
of  municipal  corporations  in  changing  or  grading  their  streets.  2  Dill. 
Mun.  Cor.  ss.  781,  798;  Sherm.  &  Ked.  Neg.  s.  370;  2  Thomp.  Neg. 
747;  Mills  Em.  D.  s.  195;  Perry  v  Worcester,  6  Gray,  546;  City  of 
Shawneetown  v.  Mason,  82  111.  337 ;  Scovil  v.  Geddings,  7  Ohio,  562 ; 
Hickox  V.  Cleveland,  8  Id.  543. 

When,  however,  municipal  corporations  are  not  in  the  exercise  of 
their  purely  governmental  functions,  for  the  sole  and  immediate 
benefit  of  the  public,  but  are  exercising,  as  corporations,  private 
franchise  powers  and  privileges,  which  belong  to  them  for  their 
immediate  corporate  benefit,  or  dealing  with  property  held  by  them 
for  their  corporate  advantage,  gain,  or  emolument,  though  enuring 
ultimately  to  the  benefit  of  the  general  public,  then  they  become 
liable  for  negligent  exercise  of  such  powers  precisely  as  are  indi- 
viduals. Hill  V.  Boston,  122  Mass.  344;  102  Id.  499;  Eastman  v. 
Meredith,  36  N.  H.  284;  Providence  v.  Clapp,  17  How.  161.  So, 
of  the  construction  and  maintenance  of  water-works:  Murphy  v. 
Lowell,  124  Mass.  564;  122  Id.  344;  102  Id.  489;  City  of  Dayton 
V.  Pease,  4  Ohio  St.  80;  Gibson  v.  Preston,  L.  R.  5  Q.  B.  219 ;  South- 
coat  V.  Stanley,  1  Hurlst.  &  N.  247 ;  2  Id.  204 ;  4  Id.  67 ;  of  ditches 
or  drains :  Chicago  v.  Langlass,  66  111.  361 ;  44  Id.  295 ;  of  bridges 
or  culverts,  and  in  respect  of  structures  which  may  obstruct  the  flow 
of  natural  water-courses  and  of  the  pollution  of  them  by  sewage  and 
the  like;  Hill  v.  Boston,  supra;  Wheeler  v.  Worcester,  10  Allen,  591; 
4  Id.  41 ;  Parker  v.  Lowell,  11  Gray,  353 ;  Conrad  v.  Ithaca,  16  N.  Y. 
158 ;  Merrifield  v.  Worcester,  supra;  Hazeltine  v.  Case,  46  Wis.  391 ; 
Hig.  Waterc.  96 ;  Wood  Nuis.  s.  688 ;  and  public  works  and  improve- 


668  WELSH   V.   VILLAGE   OF   RUTLAND.  [CHAP.    XXII. 

ments  generally:  Lyme  Eegis  v.  Henley,  3  B.  &  Ad.  77;  Nebraska 
City  V.  Campbell,  2  Black,  590;  1  Id.  39 ;  Dayton  v.  Pease,  4  Ohio  St. 
80 ;  Bigelow  v.  Eandolph,  14  Gray,  543 ;  Child  v.  Boston,  4  Allen,  41. 
This  rule  has  been  held  to  apply  to  the  discharge  of  sewage  or  other 
noxious  substances  in  such  manner  as  to  pollute  the  surface  water 
and  damage  the  property  of  individuals.  Winn  v.  Rutland,  52  Vt. 
481 ;  Gale  Eas.  308;  Merrifield  v.  Lombard,  13  Allen,  16;  Johnson  v. 
Jordon,  2  Met.  234;  and  if  a  plan  adopted  for  public  works  must 
necessarily  cause  injury  or  peril  to  private  persons  or  property,  though 
executed  with  due  care  and  skill,  the  law  regards  the  execution  of 
such  a  plan  as  negligence.  2  Thomp.  Neg.  742;  Haskell  v.  New 
Bedford,  108  Mass.  208;  30  Ind.  235;  35  Mich.  296;  33  Ala.  116; 
3  Comst.  463. 

The  case  at  bar  is  grounded  solely  upon  the  application  of  the 
doctrine  respondeat  superior,  and  can  be  maintained  only  by  estab- 
lishing the  relation  of  master  and  servant,  and  the  further  proposi- 
tion that  the  acts  done  were  of  such  a  character  that  for  a  negligent 
doing  of  them  the  village  can  be  made  liable.  The  acts  done  were 
done  by  and  under  the  direction  of  the  officers  of  the  fire  department 
and  in  pursuance  of  the  duty  imposed  upon  them  by  s.  4  of  the 
ordinance  establishing  a  fire  department  "  to  examine  into  the  con- 
dition of  all  reservoirs,  hydrants  and  wells,  and  of  the  engines  and 
all  other  fire  apparatus,  ....  and  to  take  a  general  supervision  and 
care  of  the  same."  They  performed  a  further  duty  prescribed  by  that 
section  in  reporting  the  condition  of  these  hydrants  to  the  trustees, 
and  were  by  said  trustees  directed  to  go  on  and  thaw  them  out,  and 
informed  that  the  village  would  pay  the  expense  of  so  doing.  The 
question  of  payment  seems  to  be  about  all  that  the  trustees  have  to  do 
with  such  matters,  under  the  charter  and  ordinances.  It  was  the 
duty  of  the  fire  department  officers  to  perform  the  service,  if  it  was 
necessary;  and  neither  this  duty  nor  the  mode  of  its  performance 
could  be  affected  in  one  way  or  another  by  the  fact  that  payment  of  the 
expense  was  assured  by  the  officers  through  whom  all  the  expenses 
of  the  fire  department  must  be  paid.  The  propriety  and  necessity  of 
thawing  out  the  hydrants  is  not  disputed ;  and  putting  them  in  condi- 
tion for  effective  service  in  case  of  a  fire,  which  was  liable  to  occur 
at  any  moment,  was  not  only  directly  in  the  line  of  duty  prescribed  by 
the  ordinance  just  quoted,  but  also  as  important  a  part  of  the  general 
duty  to  protect  from  and  extinguish  fires,  as  would  be  the  laying  of 
hose  or  hauling  of  fire  apparatus  while  a  conflagration  was  in  actual 
progress. 

The  fire  department  and  its  service  are  of  no  benefit  or  profit  to 
the  village  in  its  corporate  capacity.  They  are  not  a  source  of  income 
or  profit  to  the  village,  but  of  expense,  which  is  paid  —  not  out  of  any 
special  receipts  or  fund,  nor  defrayed,  even  in  part,  by  assessment 
upon  particular  persons  or  classes  benefitted,  as  in  case  of  sewers  or 


CHAP.   XXII.]  LIABILITY  OF  PUBLIC   AGENCIES.  669 

water-works  —  but  from  the  general  fund  raised  by  taxation  of  all 
the  inhabitants.  The  benefit  accrues,  not  in  any  sense  to  the  corpora- 
tion, as  such,  but  directly  to  the  public ;  and  the  members  or  employees 
of  the  department,  whether  acting  as  an  independent,  though  subordi- 
nate organization,  or  under  the  direct  authority  of  the  general  officers 
of  the  corporation,  are,  while  acting  in  the  line  of  duty  prescribed  for 
them,  not  agents  of  the  corporation  in  the  sense  which  renders  it 
liable  for  their  acts,  but  are  in  the  discharge  of  an  official  duty  a3 
public  officers.  To  such  it  is  held  in  many  cases  that  the  doctrine  of 
respondeat  superior  does  not  apply,  and  for  their  acts  no  liability  can 
be  imposed  upon  the  corporation  except  by  statute.  Dill.  Mun.  Corp., 
(1st  ed.)  s.  774;  Hafford  v.  New  Bedford,  16  Gray,  297;  Fisher  v. 
Boston,  104  Mass.  87;  Maxmilian  v.  Mayor,  62  N.  Y.  160;  Smith  v. 
Rochester,  76  Id.  513 ;  Jewett  v.  New  Haven,  38  Conn.  368 ;  Ogg  v. 
Lansing,  35  Iowa,  495;  Field  v.  Des  Moines,  39  Id.  575;  Heller 
V.  Sedalia,  53  Mo.  159 ;   Howard  v.  San  Francisco,  51  Cal.  52. 

In  the  recent  case  of  Wilcox  v.  The  City  of  Chicago,  decided  by  the 
Illinois  Supreme  Court,  in  September,  1883,  16  Reporter,  652,  which 
was  an  action  for  damages  sustained  by  the  plaintiff  by  reason  of  a 
collision  between  his  carriage  and  a  hook  and  ladder  wagon,  while  in 
service  at  a  fire,  it  was  strongly  urged  that  the  city  having  voluntarily 
undertaken  to  organize  a  fire  department,  which  was  under  its  full 
control,  it  was  unlike  the  case  of  a  compulsory  legislative  requirement, 
and  the  doctrine  of  respondeat  superior  applied.  But  the  court  held 
otherwise,  upon  the  grounds  above  indicated,  and  upon  the  further 
and  in  itself,  as  it  seems  to  us,  unanswerable  ground  of  public  policy 
and  necessity.  Judge  Walker,  in  delivering  the  opinion  of  the  court, 
thus  tersely  and  forcibly  states  these  reasons :  "  If  liable  for  neglect  in 
this  case  the  city  must  be  held  liable  for  every  neglect  of  that  depart- 
ment, and  every  employee  connected  with  it,  when  acting  within  the 
line  of  duty.  It  would  subject  the  city  to  the  opinions  of  witnesses 
and  jurors  whether  sufficient  dispatch  was  used  in  reaching  the  fire 
after  the  alarm  was  given;  whether  the  employees  had  used  the  re- 
quisite skill  for  its  extinguishment;  whether  a  sufficient  force  had 
been  provided  to  secure  safety ;  whether  the  city  had  provided  proper 
engines  and  other  appliances  to  answer  the  demands  of  the  hazards 
of  fire  in  the  city;  and  many  other  things  might  be  named  that 
would  form  the  subject  of  legal  controversy.  To  permit  recoveries 
to  be  had  for  all  such  and  other  acts  would  virtually  render  the 
city  an  insurer  of  every  person's  property  within  the  limits  of  its 
jurisdiction.  ...  To  allow  recoveries  for  the  negligence  of  the  fire 
department  would  almost  certainly  subject  property  holders  to  as 
great,  if  not  greater,  burdens  than  are  suffered  from  the  damages 
by  fire.  Sound  public  policy  would  forbid  it,  if  it  was  not  prohibited 
by  authority." 

If  the  defendant  were  held  liable  in  this  case,  it  would  be  impossible 


670  FIRE  INSURANCE  PATROL   V.   BOYD.  [CHAP.    XXII. 

to  avoid  a  similar  conclusion  in  case  of  a  negligent  or  careless  act  in 
putting  the  hydrants  in  order  for  efficiency,  or  in  the  use  or  repair  of 
any  of  the  fire  apparatus,  or  indeed  any  negligence  or  carelessness  of 
firemen  while  in  active  service  at  a  fire;  and  that  would  be  a  state 
of  law  which  it  must  readily  be  seen  cities  and  villages  could  not  live 
under.  It  would  make  them  virtually  insurers  of  all  property  within 
iheir  limits,  and  of  their  citizens,  not  only  against  damage  by  fire, 
but  against  all  injuries  to  persons  or  property  by  reason  of  the  efforts 
used  to  stay  or  extinguish  fires,  provided  any  negligence  or  want  of 
due  care  and  skill  could  be  established  to  the  satisfaction  of  a  jury. 

We  find  no  error,  and  the  judgment  of  the  County  Court  is 
aflfirmed. 


FIKE  INSUEANCE  PATEOL  v.   BOYD. 

120  Pa.  St.  624.     1888. 

Action  for  wrongfully  causing  the  death  of  plaintiffs'  intestate. 
Judgment  for  plaintiffs. 

Defendant's  servants  negligently  pitched  heavy  bundles  out  of  a 
fourth-story  window.  Plaintiffs'  intestate  was  struck  by  one  of  these 
bundles  and  so  seriously  injured  that  he  subsequently  died  of  his 
injuries.  Defendant  corporation  has  no  capital  stock,  declares  no 
dividends,  and  is  equipped  and  maintained  by  voluntary  contributions 
or  subscriptions  made  mainly  by  insurance  companies.  Its  services 
are  given  however  to  the  saving  of  life  and  property  threatened  by 
fire,  whether  the  property  endangered  is  insured  or  not. 

Mr.  Justice  Paxson  (after  discussing  the  question  whether  de- 
fendant corporation  is  a  public  charity) .  Our  conclusion  is  that  the 
Fire  Insurance  Patrol  of  Philadelphia  is  a  public  charitable  institu- 
tion ;  that  in  the  performance  of  its  duties  it  is  acting  in  aid  and  in 
ease  of  the  municipal  government  in  the  preservation  of  life  and 
property  at  fires.  It  remains  to  inquire  whether  the  doctrine  of 
respondeat  superior  applies  to  it.  Upon  this  point  we  are  free  from 
^oubt.  It  has  been  held  in  this  state  that  the  duty  of  extinguishing 
fires  and  saving  property  therefrom  is  a  public  duty,  and  the  agent 
to  whom  such  authority  is  delegated  is  a  public  agent  and  not  liable 
for  the  negligence  of  its  employees.  This  doctrine  was  affirmed  by 
this  court  in  Knight  v.  City  of  Philadelphia,  15  W.  N.  C.  307,  where  it 
was  said :  "  We  think  the  court  did  not  commit  any  error  in  entering 
judgment  for  the  defendant  upon  the  demurrer.  The  members  of  the 
fire  department  are  not  such  servants  of  the  municipal  corporation 
as  to  make  it  liable  for  their  acts  or  negligence.  Their  duties  are  of  a 
public  character,  and  for  a  high  order  of  public  benefit.  The  fact  that 
this  act  of  assembly  did  not  make  it  obligatory  on  the  city  to  organize 


CHAP.   XXII.]  LIABILITY   OF   PUBLIC   AGENCIES.  671 

a  fire  department,  does  not  change  the  legal  liability  of  the  munici- 
pality for  the  conduct  of  the  members  of  the  organization.  The  same 
reason  which  exempts  the  city  from  liability  for  the  acts  of  its  police- 
men, applies  with  equal  force  to  the  acts  of  the  firemen."  And  it 
would  seem  from  this  and  other  cases  to  make  no  difference  as  respects 
the  legal  liability,  whether  the  organization  performing  such  public 
service  is  a  volunteer  or  not.  Jewett  v.  New  Haven,  38  Conn.  368 ; 
Russell  V.  Men  of  Devon,  2  T.  R.  667 ;  Feoffees  of  Heriot's  Hospital 
V.  Ross,  13  C.  &  F.  506;  Riddle  v.  Proprietors,  7  Mass.  169;  Mc- 
Donald V.  Hospital,  120  Mass.  432;  Boyd  v.  Insurance  Patrol,  113 
Pa.  269.  But  I  will  not  pursue  this  subject  further,  as  there  is 
another  and  higher  ground  upon  which  our  decision  may  be  placed. 

The  Insurance  Patrol  is  a  public  charity;  it  has  no  property  or 
funds  which  have  not  been  contributed  for  the  purposes  of  charity, 
and  it  would  be  against  all  law  and  all  equity  to  take  those  trust 
funds,  so  contributed  for  a  special,  charitable  purpose,  to  compensate 
injuries  inflicted  or  occasioned  by  the  negligence  of  the  agents  or 
servants  of  the  patrol.  It  would  be  carrying  the  doctrine  of  respon- 
deat superior  to  an  unreasonable  and  dangerous  length.  That  doc- 
trine is  at  best  —  as  I  once  before  observed  —  a  hard  rule.  I  trust 
and  believe  it  will  never  be  extended  to  the  sweeping  away  of  public 
charities;  to  the  misapplication  of  funds,  specially  contributed  for 
a  public  charitable  purpose,  to  objects  not  contemplated  by  the 
donors.  I  think  it  may  be  safely  assumed  that  private  trustees,  hav- 
ing the  control  of  money  contributed  for  a  specific  charity,  could  not, 
in  case  of  a  tort  committed  by  one  of  their  members,  apply  the 
funds  in  their  hands  to  the  payment  of  a  judgment  recovered  there- 
for. A  public  charity,  whether  incorporated  or  not,  is  but  a  trustee, 
and  is  bound  to  apply  its  funds  in  furtherance  of  the  charity,  and 
not  otherwise.  This  doctrine  is  hoary  with  antiquity,  and  prevails 
alike  in  this  country  and  in  England,  where  it  originated  as  early 
as  the  reign  of  Edward  V.,  and  it  was  announced  in  the  Year  Book 
of  that  period.  In  the  Feoffees  of  Heriof  s  Hospital  v.  Ross,  12  C. 
&  F.  506,  a  person  eligible  for  admission  to  the  hospital  brought  an 
action  for  damages  against  the  trustees  for  the  wrongful  refusal  on 
their  part  to  admit  him.  The  case  was  appealed  to  the  House  of 
Lords,  when  it  was  unanimously  heldl;hat  it  could  not  be  maintained. 
Lord  Cottenham  said :  "  It  is  obvious  that  it  would  be  a  direct  vio- 
lation, in  all  cases,  of  the  purpose  of  a  trust  if  this  could  be  done; 
for  there  is  not  any  person  who  ever  created  a  trust  that  provided 
for  payment  out  of  it  of  damages  to  be  recovered  from  those  who  had 
the  management  of  the  fund.  No  such  provision  has  been  made  here. 
There  is  a  trust,  and  there  are  persons  intended  to  manage  it  for  the 
benefit  of  those  who  are  to  be  the  objects  of  the  charity.  To  give 
damages  out  of  a  trust  fund  would  not  be  to  apply  it  to  those  objects 
which  the  author  of  the  fund  had  in  view,  but  would  be  to  divert  it 


672  FIRE  INSURANCE  PATROL   V.   BOYD.  [CHAP.   XXII. 

to  a  completely  different  purpose."  Lord  Brougham  said:  "The 
charge  is  that  the  governors  of  the  hospital  have  illegally  and  im- 
properly done  the  act  in  question,  and,  therefore,  because  the  trustees 
have  violated  the  statute,  therefore  —  what?  Not  that  they  shall 
themselves  pay  the  damages,  but  that  the  trust  fund  which  they  ad- 
minister shall  be  made  answerable  for  their  misconduct.  The  find- 
ing on  this  point  is  wrong,  and  the  decree  of  the  court  below  must  be 
reversed."  Lord  Campbell :  "  It  seems  to  have  been  thought  that  if 
charity  trustees  have  been  guilty  of  a  breach  of  trust,  the  persons 
damnified  thereby  have  a  right  to  be  indemnified  out  of  the  trust 
funds.  That  is  contrary  to  all  reason,  justice,  and  common  sense. 
Such  a  perversion  of  the  intention  of  the  donor  would  lead  to  most  in- 
convenient consequences.  The  trustees  would  in  that  case  be  indemni- 
fied against  the  consequences  of  their  own  misconduct,  and  the  real 
object  of  the  charity  would  be  defeated.  Damages  are  to  be  paid  from 
the  pocket  of  the  wrong-doer,  not  from  a  trust  fund.  A  doctrine  so 
strange,  as  the  court  below  has  laid  down  in  the  present  case,  ought  to 
have  been  supported  by  the  highest  authority.  There  is  not  any  au- 
thority, not  a  single  shred,  to  support  it.  No  foreign  or  constitu- 
tional writer  can  be  referred  to  for  such  a  purpose."  I  have  quoted 
at  some  length  from  the  opinions  of  these  great  jurists  because  they 
express  in  vigorous  and  cl^ar  language  the  law  upon  this  subject.  I 
have  not  space  to  discuss  the  long  line  of  cases  in  England  and  this 
country  in  which  the  above  principle  is  sustained.  It  is  sufficient  to 
refer  to  a  few  of  them  by  name.  Riddle  v.  Proprietors  of  the  Locks, 
7  Mass.  187;  McDonald  v.  Massachusetts  General  Hospital,  120 
Mass.  432;  Sherboume  v.  Yuba  Co.,  21  Cal.  113;  Brown  v.  Inhabi- 
tants of  Vinalhaven,  65  Me.  402;  Mitchell  v.  City  of  Rockland,  53 
Me.  118;  City  of  Richmond  v.  Long,  17  Grattan,  375;  Ogg  v.  City  of 
Lansing,  35  Iowa,  495;  Murtaugh  v.  City  of  St.  Louis,  44  Mo.  479; 
Patterson  v.  Penn.  Reform  School,  92  Pa.  229 ;  Maxmilian  v.  Mayor, 
62  N.  Y.  160. 

I  am  glad  to  be  able  to  say  that  no  state  in  this  country,  or  in  the 
world,  has  upheld  the  sacredness  of  trusts  with  a  firmer  hand  than 
the  state  of  Pennsylvania.  Not  only  is  a  trustee  for  a  public  or  private 
.  use  not  permitted  to  misapply  the  trust  funds  committed  to  his  care, 
but  if  he  convert  them  to  his  own  use  the  law  punishes  him  as  a  thief. 
How  much  better  than  a  thief  would  be  the  law  itself,  were  it  to 
apply  the  trusts  funds  contributed  for  a  charitable  object,  to  pay 
for  injuries  resulting  from  the  torts  or  negligence  of  the  trustee? 
The  latter  is  legally  responsible  for  his  own  wrongful  acts.  I  under- 
stand a  judgment  has  been  recovered  against  the  individual  whose 
negligence  occasioned  the  injury  in  this  case.  If  we  apply  the  money 
of  the  Insurance  Patrol  to  the  payment  of  this  judgment,  or  of  the 
same  cause  of  action,  what  is  it  but  a  misapplication  of  the  trust  fund, 
as  much  so  as  if  the  trustees  had  used  it  in  payment  of  their  personal 


CHAP.   XXII.]  LIABILITY   OF  PUBLIC  AGENCIES.  673 

liabilities  ?  It  would  be  an  anomaly  to  send  a  trustee  to  the  peniten- 
tiary for  squandering  trust  funds  in  private  speculations,  and  yet  per- 
mit him  to  do  practically  the  same  thing  by  making  it  liable  for  his 
torts.  If  the  principle  contended  for  here  were  to  receive  any  counte- 
nance at  the  hands  of  this  court,  it  would  be  the  most  damaging  blow 
at  the  integrity  of  trusts  which  has  been  delivered  in  Pennsylvania. 
We  are  not  prepared  to  take  this  step. 

We  are  not  unmindful  of  the  fact  that  it  was  contended  for  the 
defendant  in  error  that  the  case  of  Feoffees  of  Heriot's  Hospital  v. 
Eoss  is  in  conflict  with  Mersey  Docks  v.  Gibbs,  L.  R.  1  E.  &  I.  App. 
Cas.  93,  and  Parnaby  v.  Lancaster  Canal  Co.,  11  Ad.  &  E.  223.  I  am 
unable  to  see  any  such  conflict.  The  two  corporations  last  named 
were  evidently  trading  corporations,  and  in  no  sense  public  charities. 
In  regard  to  the  docks,  it  was  said  by  Blackburn,  J.,  at  page  465 : 
**  There  are  several  cases  relating  to  charities  which  were  mentioned 
at  your  lordship's  bar,  but  were  not  much  pressed,  nor,  as  it  seems  to 
us,  need  they  be  considered  now ;  for  whatever  may  be  the  law  as  to  the 
exemption  of  property  occupied  for  charitable  purposes,  it  is  clear 
that  the  docks  in  question  can  come  within  no  such  exemption." 

I  will  not  consume  time  by  discussing  the  case  of  Glavin  v.  Rhode 
Island  Hospital,  12  R.  I.  411,  which,  to  some  extent,  sustains  Ihe 
opposite  view  of  this  question.  There,  a  hospital  patient,  paying  eight 
dollars  per  week  for  his  board  and  medical  attendance,  was  allowed 
to  recover  a  verdict  against  the  hospital  for  unskilful  treatment,  and  it 
was  held  that  the  general  trust  funds  of  a  charitable  corporation  are 
liable  to  satisfy  a  judgment  in  tort  recovered  against  it  for  the  negli- 
gence of  its  officers  or  agents.  It  is  at  least  doubtful  whether  under 
its  facts  the  case  applies,  and  if  it  does,  we  would  not  be  disposed  to 
follow  it  in  the  face  of  the  overwhelming  weight  of  authority  the 
other  way,  and  of  the  sound  reasoning  by  which  it  is  supported. 

The  foregoing  is  little  more  than  a  re-assertion  of  the  views  of 
this  court  as  heretofore  expressed  in  this  case  by  our  Brother  Clark. 
See  113  Pa.  269.  Many  of  the  authorities  I  have  referred  to  are 
there  cited  by  him.  We  are  now  more  fully  informed  as  to  the  facts 
of  the  case,  and  can  apply  to  them  the  law  as  indicated  in  the  former 
opinion. 

We  are  all  of  opinion  that  the  Insurance  Patrol  is  not  liable  in  this 
action,  and  the  judgment  against  it  is,  therefore,  Reversed. 


48 


674  PARKS   V.   NORTHWESTEEN   UNIVERSITY.       [CHAP.   XXIL. 

PAEKS   V.    NOETHWESTEEN   UNIVEESITY. 

218  111.   381.     1905. 

Appeal  from  Appellate  Court,  First  District. 

Action  by  Eobert  Smith  Parks  against  the  Northwestern  University. 
From  a  judgment  of  the  Appellate  Court,  affirming  a  judgment  of 
dismissal,  plaintiff  appeals. 

BoGGS,  J.  The  declaration  in  this  case,  after  alleging  that  the 
appellee  undertook  for  hire  to  teach  the  appellant  the  science  of  den- 
tistry, dental  surgerj^,  etc.,  charged  that  the  appellant  received  injuries 
resulting  in  the  loss  of  an  eye  through  the  negligence  of  one  of  the 
professors  employed  by  the  appellee  while  the  appellant  was  in  his 
charge  as  a  student  in  a  classroom  or  laboratory  of  the  appellee.  A 
demurrer  was  sustained  to  the  declaration  by  the  Superior  Court  of 
Cook  County,  and  the  cause  dismissed;  and  this  is  an  appeal  from 
the  judgment  of  the  Appellate  Court  for  the  First  District,  affirming 
the  judgment  entered  in  said  superior  court. 

The  ground  of  the  demurrer  was  that  the  appellee  university  is  a 
charitable  institution  organized  for  the  purpose  of  disseminating  edu- 
cation and  professional  learning,  and  that  the  doctrine  that  the  emr 
ployer  shall  be  liable  to  respond  for  the  negligent  act  of  the  employee, 
has  no  application  to  it. 

The  question  as  to  whether  the  defence  should  be  raised  by  demurrer 
or  plea  was  waived  by  counsel,  and  by  agreement  the  charter  of  the 
university  was  produced,  and  it  is  agreed  that  the  cause  should  be 
considered  as  if  the  charter  of  the  appellee  was  fully  pleaded  and  the 
issue  of  law  made  thereon. 

The  appellee  university  was  created  by  a  special  charter  granted 
to  its  trustees  by  the  Legislature  of  the  state  of  Illinois  (Priv.  Laws 
1851,  p.  20),  and  is  being  operated  under  that  charter  and  the 
amendments  thereto  passed  in  1855,  1861,  and  1867.  By  section  2 
of  the  charter  (Priv.  Laws  1851,  p.  21)  it  is  provided  that  the  ap- 
pellee shall  have  perpetual  succession,  "and  shall  hold  the  property 
of  said  institution  solely  for  the  purpose  of  education,  and  not  as  a 
stock  for  the  individual  benefit  of  themselves,  or  any  contributor  to 
the  endowment  of  the  same."  Section  9  (page  23)  provides  for  a 
forfeiture,  should  "  the  corporation  at  any  time  act  contrary  to  the 
provisions  of  its  charter  or  fail  to  comply  with  the  same.''  Appellee 
is  required  also,  by  the  terms  of  said  charter,  to  accept  all  persons  who 
may  apply  to  it  for  education,  provided  they  meet  the  necessary  edu- 
cational requirements  and  are  of  good  moral  character.  Many  other 
broad  and  extensive  powers  are  granted  to  the  appellee  university, 
but  they  are  all  conferred  to  enable  it  to  so  manage  its  property  that  it 


CHAP.  XXn.]  LIABILITY  OF  PUBLIC  AGENCIES.  675 

may  the  more  effectively  carry  out  the  main  purposes  of  its  creation  — 
education  —  and  for  that  purpose  alone. 

It  is  clear  from  the  reading  of  this  charter  that  the  appellee's  entire 
funds,  whether  from  tuition  fees  received  from  students  or  other 
sources,  must  be  used  solely  for  educational  purposes.  The  appellee 
corporation  has  no  capital  stock,  it  cannot  declare  dividends  or  share 
profits,  and  everything  that  it  has  is  held  in  trust  to  be  applied  in 
such  manner  as  to  best  accomplish  the  purpose  for  v?hich  it  was 
created,  viz.,  the  diffusion  of  knowledge  and  learning. 

In  the  statute  of  charitable  uses  (St.  43  Eliz.  c.  4),  which  is  a 
part  of  the  common  law  of  this  state  (Heuser  v.  Harris,  42  111.  425; 
Andrews  v.  Andrews,  110  111.  233),  "schools  of  learning,  free 
schools,*'  etc.,  are  mentioned  as  charitable  objects,  and  the  fact  that 
the  appellee  requires  its  students  to  pay  tuition  does  not  change  its 
character  as  a  charitable  institution.  6  Cyc.  974;  Andrews  v.  An- 
drews, supra. 

The  appellant  insists  that  the  appellee  university  is  not  a  public 
charity,  within  the  meaning  of  the  rule  that  exempts  such  institutions 
from  liability  for  the  negligent  acts  of  its  servants.  He  first  argues 
that  the  principle  of  exemption  applies  only  to  involuntary  corpora- 
tions, such  as  counties,  towns,  charitable  institutions  conducted  by 
the  state  or  general  government,  etc.,  which  are  a  part  of  the  gov* 
emment  of  the  state,  and  the  exemption  exists  because  they  are  act^ 
ing  as  agencies  of  the  state,  but  that  it  does  not  apply  to  corporations 
accepting  private  charters,  and  that  the  appellee  is  liable  upon  the 
same  principle  that  cities  and  villages  are  held  liable  for  the 
negligent  failure  to  properly  maintain  streets,  sidewalks,  etc., 
in  a  reasonably  safe  condition.  Counties  and  towns  under  town- 
ship organization  are  created  as  agencies  of  the  state  for  the  pur- 
pose of  exercising  locally  certain  governmental  functions,  and  in 
the  performance  of  duties  of  that  character  neither  the  state  nor  any 
of  its  agencies  are  liable  to  respond  in  damages  for  the  negligent  acts 
of  any  of  its  servants.  An  incorporated  city  or  village  may  have, 
and  usually  has,  cast  upon  it  authority  to  perform  certain  public  or 
governmental  duties,  and  in  the  performance  of  such  functions  these 
municipalities  are  not  subject  to  the  doctrine  of  respondeat  superior 
for  the  delinquencies  of  their  agents  or  officers,  for  the  reason,  before 
given,  that  in  such  matters  they  are  but  arms  of  the  state,  and  the 
non-liability  of  the  sovereign  covers  and  shields  the  acts  of  its  agencies. 
City  of  Chicago  v.  Chicago  Ball  Club,  196  111.  54.  An  incorporated 
city  or  village  voluntarily  accepts  a  charter  granting  to  it  certain 
private  or  proprietary  powers  —  that  is,  powers  to  be  exercised  for  the 
benefit  of  its  citizens  —  and  a  duty  is  thereby  imposed  upon  them  to 
properly  exercise  those  powers  without  injury  to  others,  and  for  the 
negligent  breach  of  that  duty  by  their  servants  they  are  liable  to  the 
injured  party.    But  the  exemption  axjcorded  to  charitable  institutions 


676  PARKS    V.    N0RTHWE8TEBN    UNIVERSITY.       [CHAP.    XXII. 

does  not  rest  alone  on  the  doctrine  that  the  state  or  the  sovereign  is 
not  liable  for  the  acts  of  its  servants.  The  doctrine  of  respondeat 
superior  does  not  extend  to  charitable  institutions  for  the  reasons, 
"  first,  that  if  this  liability  were  admitted  the  trust  fund  might  be 
wholly  destroyed  and  diverted  from  the  purpose  for  which  it  was 
given,  thus  thwarting  the  donor's  intent,  as  the  result  of  negligence 
for  which  he  was  in  nowise  responsible ;  second,  that,  since  the  trus- 
tees cannot  divert  the  funds  by  their  direct  act  from  the  purposes  for 
which  they  were  donated,  such  funds  cannot  be  indirectly  diverted 
by  the  tortious  or  negligent  acts  of  the  managers  of  the  funds  or  their 
agents  or  employees."  5  Am.  &  Eng.  Ency.  of  Law  (2d  ed.)  923. 
These  reasons  for  exemption  apply  as  well  to  private  as  to  public 
charitable  corporations. 

The  appellee  university  is  a  private  corporation,  but  is  organized 
for  purely  charitable  purposes.  It  declares  no  dividends,  and  has  no 
power  to  do  so.  It  depends  upon  the  income  from  its  property  and 
the  endowments  and  gifts  of  benevolent  persons  for  funds  to  carry 
out  the  sole  object  for  which  it  was  created  —  the  dissemination  of 
learning.  Its  charter  secures  to  all  persons  of  good  moral  character 
who  have  made  sufficient  preliminary  advancement  the  benefits  of 
the  university,  and  all  of  its  funds  and  property,  from  whatever 
source  derived,  are  held  in  trust  by  it,  to  be  applied  in  furtherance 
of  the  purpose  of  its  organization  and  increasing  its  benefits  to  the 
public.  The  funds  and  property  thus  acquired  are  held  in  trust,  and 
cannot  be  diverted  to  the  purpose  of  paying  damages  for  injuries 
caused  by  the  negligent  or  wrongful  acts  of  its  servants  and  employees 
to  persons  who  are  enjoying  the  benefit  of  the  charity.  An  institution 
of  this  character,  doing  charitable  work  of  great  benefit  to  the  public 
without  profit,  and  depending  upon  gifts,  donations,  legacies,  and 
bequests  made  by  charitable  persons  for  the  successful  accomplish- 
ment of  its  beneficial  purposes,  is  not  to  be  hampered  in  the  acquisi- 
tion of  property  and  funds  from  those  wishing  to  contribute  and 
assist  in  the  charitable  work  by  any  doubt  that  might  arise  in  the 
minds  of  such  intending  donors  as  to  whether  the  funds  supplied  by 
them  will  be  applied  to  the  purposes  for  which  they  intended  to  devote 
them,  or  diverted  to  the  entirely  different  purpose  of  satisfying  judg- 
ments recovered  against  the  donee  because  of  the  negligent  acts  of 
those  employed  to  carry  the  beneficent  purpose  into  execution. 

That  the  appellee,  though  a  private,  and  not  a  public,  corporation, 
being  a  purely  charitable  institution,  it  not  answerable  for  the  negli- 
gent acts  of  its  employees,  is  held  but  with  little  diversity  of  opinion. 
5  Am.  &  Eng.  Ency.  of  Law  (2d  ed.)  923,  and  many  judicial  decisions 
cited  in  the  note.  The  only  case  we  find  in  this  country  expressing  a 
contrary  view  is  Glavin  v.  Ehode  Island  Hospital,  12  K.  I.  411;  and 
since  that  decision  the  Legislature  of  Rhode  Island  has  by  appropriate 
enactment  created  the  exemption  here  contended  for  by  the  appellee 


CHAP.    XXII.]  LIABILITY   OF   PUBLIC   AGENCIES.  677 

university  as  to  all  hospitals  whose  funds  are  exclusively  devoted  to 
charitable  purposes.    Gen.  Laws  R.  I.  1896,  c.  177,  §  38. 

The  ruling  of  the  superior  court  of  Cook  county  in  sustaining  the 
demurrer  to  appellant's  declaration  was  correct.  The  judgment  of  the 
Appellate  Court  must  be,  and  is,  affirmed. 

Judgment  affirmed. 


ADAMS   V.   UNIVERSITY   HOSPITAL. 
99  S.  W.  (Kan.  City  Ct.  App.  Mo.)  453.     1907. 

Ellison,  J.  The  plaintiff  was  a  patient  at  the  defendant's  hospital 
whither  he  had  gone  to  have  a  surgical  operation  performed  upon 
him.  While  yet  under  the  influence  of  an  anesthetic  administered 
for  the  purpose  of  the  operation  and  after  the  performance  of  the 
operation,  he  was  placed  in  the  charge  and  care  of  one  or  more  of 
defendant's  nurses,  who,  it  is  charged,  were  not  competent,  and  by 
reason  thereof  they  permitted  him  to  be  severely  burned  on  the  legs 
by  rubber  bottles  filled  with  hot  water,  whereby  he  was  painfully  and 
permanently  injured.  He  brought  the  present  action  against  the 
defendant  for  damages  and  prevailed  in  the  trial  court. 

Serious  injury  to  plaintiff  was  shown,  and  the  defendant's  main 
contention  is  that  it  is  a  benevolent  or  charitable  institution  and  as 
such  is  not  liable  to  an  action  for  damages  caused  by  the  acts  of  its 
employees ;  that,  as  such  an  institution,  it  is  exempt  from  application 
of  the  ~doctrine  of  respondeat  superior.  Defendant  insists  that  it 
is  neither  liable  for  the  negligence  of  its  servants,  nor  for  its  own 
negligence,  if  any,  in  undertaking  to  select  competent  servants.  Upon 
the  other  hand,  the  plaintiff  contends  that  there  is  liability,  if  there 
was  negligence  either  of  the  servant  or  of  the  defendant  in  selecting 
a  competent  servant.  .  .  . 

The  question  as  presented  here  relates  to  the  liability  of  a  private, 
or  quasi  private,  charity  for  damages  caused  by  the  negligent  acts  of 
its  employees,  or  by  its  own  negligent  act  in  employing  incompetent 
employees.  We  will  assume  that  the  evidence  tends  to  show  the  plain- 
tiff was  injured  either  by  the  negligence  of  one  of  defendant's  nurses 
or  by  her  incompetence.  If  by  the  latter,  we  will  assume,  for  the 
purpose  of  disposing  of  the  case,  that  there  is  enough  in  the  record 
to  justify  a  verdict  that  the  defendant  was  careless  in  selecting  her. 
But  as,  in  our  opinion,  the  defendant  is  neither  liable  for  the  negli- 
gence of  one  of  its  employees,  nor  for  its  own  negligence  in  selecting 
an  incompetent  employee,  it  can  make  no  difference  which  of  the 
two  acts  caused  the  injury. 

Every  member  of  the  public  is  interested  in  the  building  up  and 
maintenance  of  a  charitable  institution  designed  for  the  alleviation 


678  ADAMS   V.   UNIVERSITY   HOSPITAL.  [CHAP.   XXII. 

of  human  suffering,  and  every  one  may  be  supposed  to  be  concerned 
in  such  institution,  and  to  be  a  party  to  a  line  of  action  or  conduct 
which  would  disable  every  other  from  doing  anything  which  has 
a  tendency  to  prevent  the  institution  from  performing  the  functions 
intended  by  its  founder.'  The  state  itself  is  concerned  that  its  citizens 
may  be  restored  to  health,  and  to  that  end  may  have  places  always 
open  where  those  in  need  may  obtain  relief.  So  it  may  be  said  that 
any  citizen  who  accepts  the  service  of  such  institution  (it  making 
no  difference  whether  in  any  special  instance  he  pays  his  way)  does 
so  upon  the  ground,  or  the  implied  assurance,  that  he  will  assert  no 
complaint  which  has  for  its  object,  or  perhaps  we  should  say,  for  its 
result,  a  total  or  partial  destruction  of  the  institution  itself. 

If  an  organization  for  charitable  purposes  founded  upon  the  bounty 
of  others  who  supply  funds  for  the  purpose  of  administering  relief 
to  those  in  need  of  relief,  and  of  extending  aid,  care,  and  protection 
to  those  who  have  no  one  to  call  upon  by  the  ties  of  nature,  may  have 
its  funds  diverted  from  such  kindly  purpose,  would  it  not  inevitably 
operate  to  close  the  purses  of  the  generous  and  benevolent  who  now 
do  much  to  relieve  the  suffering  of  mankind?  Let  us  see  what  the 
practical  result  might  be.  With  a  view  to  supplying  care,  protection, 
and  education  to  dependent  children  without  parents,  some  good  man 
puts  in  trust  for  building  an  orphans'  home  the  sum  of  $25,000, 
and  for  its  perpetual  maintenance  the  further  sum  of  $100,000,  to 
be  put  at  interest  or  otherwise  invested.  The  trustees  may  unfor- 
tunately, without  proper  inquiry  or  care,  employ  an  incompetent 
servant.  That  servant,  in  the  first  year's  existence  of  the  home,  may, 
from  ignorance,  or  from  negligence,  do,  or  omit  to  do,  something 
causing  damage  which,  under  our  liberal  measure  of  compensation 
for  personal  injuries,  would  be  sufficient  to  take  up  the  whole  fund, 
and  thus,  for  a  single  mishap,  the  generous  object  of  the  donor  would 
be  thwarted,  and  what  was  intended  as  perpetual  relief  to  succeeding 
generations  of  helpless  children  would  be  wiped  out.  That  funds 
supporting  organizations  for  charity  cannot  be  thus  diverted,  in  other 
words,  that  charitable  institutions  or  corporations  are  not  liable  for 
the  negligence  of  an  employee,  nor  for  the  want  of  care  in  the  selec- 
tion of  an  employee,  is  sustained  by  authority  and  by  reason. 

The  question  arose  in  England,  and  was  decided  in  the  House  of 
Lords.  Heriot's  Hospital  v.  Eoss,  12  Clark  &  F.  507.  In  that  case 
Heriot,  a  jeweler,  by  his  will,  in  the  year  1623,  left  a  large  part  of 
his  estate  to  certain  officers  of  the  city  of  Edinburgh  in  perpetuity 
for  founding  and  maintaining  a  hospital  for  the  "maintenance,  re- 
lief, bringing  up,  and  education  of  so  many  poor  fatherless  boys, 
freemen's  sons  of  that  town,  as  the  means  which  I  give,  and  the 
yearly  value  of  the  lands  so  purchased  shall  amount  and  come  unto.'* 
The  hospital  was  to  be  governed  by  niles  formulated  by  a  certain 
doctor  named  in  the  will.     The  rules,  as  framed,  admitted  to  the 


CHAP.   XXII.]  LIABILITY   OF   PUBLIC   AGENCIES.  679 

hospital  boys  between  certain  ages.  More  than  200  years  after  it  waa 
founded,  a  boy,  alleging  that  he  was  wrongfully  excluded,  brought 
his  action  against  the  feoffees  of  the  hospital  in  their  official  capacity, 
for  damages.  Opinions  of  Lords  Cottenham,  Brougham,  and 
Campbell  are  reported  which  are  remarkable  for  the  vigor  with 
which  they  assail  the  proposition  that  the  funds  of  a  charity  may 
be  diverted  to  the  payment  of  damages  for  malfeasance  of  the  trustees. 
Lord  Campbell  pronounced  the  suggestion  that  persons  damaged 
could  be  indemnified  out  of  the  trust  fund  to  be  "  contrary  to  all 
reason,  and  justice,  and  common  sense."  He  stated  that  there  waa 
"  not  any  authority,  not  a  single  shred  to  support "  such  view  of  the 
law.  In  reversing  the  decree  of  the  lower  court  he  further  stated 
that  "  it  is  to  be  hoped  that  we  shall  never  again  hear  of  a  decision 
like  the  present,  contrary  to  reason,  sense  and  justice."  In  the  course 
of  their  opinions,  the  judges  refer  as  authority  to  the  case  of  Duncan 
V.  Findlater,  6  Clark  &  F.  894.  That  case  has  been  overruled  in 
Mersey  Docks  v.  Gibbs,  L.  E.  1  H.  L.  117  (same  case  in  11  H.  L. 
Cas.  720;  1  Eng.  and  Irish  Appeal  Cas.  93),  and  was,  therefore,  not 
followed  in  as  late  a  case  as  that  of  Gilbert  v.  Corporation  of  Trinity 
House,  L.  E.  17  Q.  B.  795. 

From  the  fact  that  Duncan  v.  Findlater  was  stated  to  be  authority 
supporting  the  holding  in  Heriot's  Hospital  v.  Eoss,  and  that  the  for- 
mer was  afterwards  overruled,  the  notion  came  to  prevail,  in  some 
quarters,  that  the  latter  case  was  also  discredited.  But  an  examina- 
tion of  the  cases,  and  others  of  similar  character,  will  disclose  that 
they  belong  to  different  classes  and  that  the  principle  or  foundation 
upon  which  they  rest  is  radically  unlike.  One  class  involves  the 
right  to  divert  charity  funds  from  the  object  of  the  donor  by  appro- 
priating them  in  payment  of  damages  caused  by  the  neglect  of  the 
trustees;  the  other  involves  the  liability  of  public  corporations  (not 
charitable)  for  the  negligence  of  trustees  or  other  officers  in  charge 
thereof.  It  is  not  necessary  to  refer  to  the  rule  as  to  liability  of 
corporations  in  this  country,  or  to  differences  which  may  exist  be- 
tween the  rule  adopted  in  this  state  and  that  applied  in  England, 
whether  such  corporations  be  private  trading  corporations,  or  govern- 
mental, or  partly  both.  It  is  sufficient  for  present  purposes  to  know 
that  Heriot's  Hospital  v.  Eoss,  involving  a  case  of  a  distinct  and 
wholly  different  class,  has  not  had  its  value  at  all  abated  by  the  other 
cases.  Duncan  v.  Findlater  was  an  action  against  the  trustees  of 
a  public  road  (appointed  under  a  statute)  and  was  for  injury  to  one 
"travelling  at  night,  by  reason  of  defects  in  the  highway.  The  decision 
was  that  the  road  fund  was  not  to  be  subject  to  such  damages.  It 
was  overruled,  as  above  stated,  in  Mersey  Docks  v.  Gibbs,  a  case  where 
trustees,  who  were  by  statute  in  charge  of  a  harbor  and  docks,  suffered 
them  to  become  obstructed  with  mud  so  that  a  ship  and  cargo  were 
damaged.     It  was  decided  that  the  corporation  was  liable  for  the 


680  ADAMS   V.    UNIVERSITY   HOSPITAL.  [CHAP.    XXII. 

negligence   of   the   trustees,   and   Duncan   v.    Findlater   was   over- 
ruled. 

But  the  ground  of  objection  to  Duncan  v.  Findlater  was  not  a 
ground  which  can  apply  to  the  reason  for  the  rule  which  supports 
the  exemption  of  charities.  The  Mersey  Docks  were  authorized  by 
act  of  Parliament,  and  were  entitled  to  receive  port  dues  and  apply 
the  same  to  the  improvement  of  the  harbor  and  maintaining  the 
docks,  to  the  payment  of  debts,  and,  after  such  debts  were  paid,  the 
trustees  were  required  to  lower  and  reduce  the  rates  "  as  far  as  can 
be  done,  leaving  sufficient  for  defraying  all  charges  of  management 
and  other  concerns  of  the  docks,  etc.,  and  improving,  repairing,  and 
maintaining  the  same,  and  for  carrying  into  execution  the  provisions 
of  this  act  and  former  acts."  While,  in  the  course  of  the  opinion, 
strong  objection  is  taken  to  Duncan  v.  Findlater  in  deciding  no 
liability  existed  for  negligently  permitting  a  defective  highway,  yet 
the  ground  upon  which  the  case  is  put  turned  upon  a  construction  of 
the  acts  of  Parliament  authorizing  the  trustees  to  take  charge  of  the 
harbor  and  docks  (see  pages  104,  107,  118).  At  page  107,  Justice 
Blackburn  said :  "  Corporations,  like  the  present,  formed  for  trad- 
ing and  other  profitable  purposes,  though  such  corporations  may  act 
without  reward  to  themselves,  yet  in  their  very  nature  they  are  sub- 
stitutions on  a  large  scale  for  individual  enterprise,  and  we  think 
that,  in  the  absence  of  anything  in  the  statutes  (which  creates  such 
corporations)  showing  a  contrary  intention  in  the  Legislature,  the 
true  rule  of  construction  is  that  the  Legislature  intended  that  the 
liability  of  corporations  thus  substituted  for  individuals  should,  to 
the  extent  of  their  corporate  funds,  be  co-extensive  with  that  imposed 
hy  the  general  law  on  the  owners  of  similar  works."  The  case  decided 
in  Queen's  Bench  (Gilbert  v.  Corporation  of  Trinity  House,  supra) 
is  decided  on  the  same  principle  as  that  which  governed  the  Mersey 
Docks  Case.  It  was  a  case  where  the  care  and  management  of  all 
lighthouses  and  beacons  in  England  and  adjacent  seas  were  vested 
in  Trinity  House,  and  the  corporation  was  held  to  be  liable  for  the 
negligence  of  one  it  licensed  to  remove  a  partially  destroyed  beacon. 

It  seems  clear  to  us  that  those  cases,  and  others  of  like  character, 
should  not  be  thought  to  be  in  conflict  with  those  which  have  steadily 
maintained  the  rule  exempting  the  diversion  of  funds  set  apart  for 
the  support  of  charitable  institutions.  We  have  not  been  advised 
of  any  case  in  England  which  has  doubted  the  authority  of  Heriot's 
Hospital  V.  Ross.  And,  though  it  was  cited  in  Mersey  Docks  v.  Gibbs, 
•it  is  not  questioned  or  mentioned  by  the  court,  undoubtedly  upon  the 
ground  that  it  did  not  depend  upon  like  considerations.  Indeed, 
afterwards,  in  a  case  in  the  House  of  Lords,  involving  the  liability 
of  the  Mersey  Docks  to  be  rated  for  taxation,  Justice  Blackburn, 
who  delivered  the  opinion  in  the  case  of  Mersey  Docks  v.  Gibbs,  dis- 
claimed that  that  case  involved  considerations  applicable  to  charities. 


CHAP.   XXII.]  LIABILITY   OF   PUBLIC   AGENCIES.  '  681 

In  the  course  of  his  opinion,  at  page  465  of  the  report,  he  said  that 
there  were  "  several  cases  relating  to  charities  which  were  mentioned 
at  your  Lordships'  bar,  but  were  not  much  pressed,  nor,  as  it  seems 
to  us,  need  they  be  considered  now,  for,  whatever  may  be  the  law 
as  to  exemption  of  property  occupied  for  charitable  purposes,  it  is 
clear  that  the  docks  in  question  can  come  within  no  such  exemption." 
Mersey  Docks  v.  Cameron,  11  H.  L.  Cas.  443. 

In  this  country  whatever  conflict  in  the  authorities  may  appear 
has  arisen  from  applying  rules  to  charities  which,  as  we  have  just 
seen,  were  laid  down  as  governing  an  entirely  different  class  of  cases 
—  cases  clearly  involving  governmental  function,  or  substitutes  for 
private  enterprise.  A  fund  arising  from  charges  against  shipowners 
for  use  of  docks  for  landing,  unloading,  and  storing  freight,  a  fund 
arising  from  toll  taken  of  those  using  a  public  highway,  and  the  like, 
are  matters  of  business,  or  are  of  qvasi  governmental  concern,  which 
bear  no  likeness  to  the  funds  which  are  provided  by  the  generosity 
of  donors  for  the  perpetual  alleviation  of  suffering  and  for  the  better- 
ment of  the  health  and  moral  being  of  mankind.  In  the  former  class, 
it  may  be  well  enough  to  say  that  the  law  intended  the  fund  to  make 
good  an  injury  which  its  managers  may  inflict.  But  in  the  latter, 
it  would  be  against  every  principle  of  right  and  an  outrage  on  justice 
to  deplete  a  fund  set  aside  for  perpetual  charity,  by  using  it  in 
paying  damages  caused  by  the  acts  of  those  engaged  in  administering 
the  trust.  Charity  funds  are  things  apart  from  ordinary  matters 
of  business  or  trade.  In  the  thoughts  and  consciences  of  men,  char- 
ities are  not  loaded  with  the  burdens  put  upon  other  matters.  Charity 
suggests  different  considerations  and  treatment  from  matters  of 
ordinary  business,  and  hence  there  has  arisen  out  of  the  conscience, 
a  principle  which  protects  it  in  its  beneficent  and  perpetual  purpose. 
The  greatest  authority  has  said  that,  though  prophecies  shall  come 
to  naught,  and  tongues  shall  cease,  and  knowledge  shall  vanish  away, 
yet  "  charity  never  faileth."  That  and  other  statements  of  like  tenor, 
though  perhaps  referring  to  mental  conditions,  have  doubtless  done 
much  to  foster  the  privileges  which  have  ever  been  accorded  to  ma- 
terial benevolence. 

To  repeat  a  thought  already  suggested,  every  one,  in  the  present 
or  the  future,  coming  within  the  object  of  a  charity,  has  a  right  to 
the  enjoyment  of  its  benefits,  and  no  one  has  a  right  to  appropriate 
to  himself  in  settlement  of  claims,  the  fund  whereby  those  benefits 
are  secured.  To  permit  it  to  be  done  would  be  not  only  setting  aside 
the  purpose  of  the  donor,  but  would,  in  its  results,  allow  the  claim 
of  one  person  to  exclude  the  rights  of  all  others  who  may  come  after 
him.  It  would  be  a  matter  of  grave  concern  and  regret  if  funds  set 
apart  for  support  of  our  charitable  institutions  should  be  made  sub- 
ject to  the  assaults  of  the  damage  claimant,  and  be  called  upon,  not 
only  for  compensatory  recompense,  but  to  stand  for  punishment  in 
the  way  of  exemplary  damages.     Especially  would  it  strike  one  as 


682  ADAMS   V.   UNIVERSITY  HOSPITAL.  [CHAP.   XXII. 

unfortunate,  when  it  is  realized  that  such  claimant  has  his  primary 
right  to  hold  to  the  strictest  accountability  the  individual  who  does 
him  the  injury  for  which  he  makes  complaint,  and  that  in  denying 
him  the  right  to  impoverish  benevolence  we  do  not  deny  him  a 
remedy  against  the  actual  wrongdoer. 

So  the  weight  of  authority  in  this  country  supports  Heriot's  Hos- 
pital V.  Ross  as  being  the  rule  which  commends  itself,  not  only  be- 
cause it  carried  out  the  donor's  intention,  but  because  it  is  more 
reasonable  and  just,  and  better  subserves  an  enlightened  public 
policy.  Parks  v.  University,  218  111.  381;  Fire  Ins.  Patrol  v.  Boyd, 
120  Pa.  624;  Williamson  v.  Louisville  Reform  School,  95  Ky.  251; 
Perry  v.  House  of  Refuge,  63  Md.  20;  Maia  v.  Eastern  Hospital,  97 
Va.  507;  Downes  v.  Harper  Hospital,  101  Mich.  555;  McDonald  v. 
Hospital,  120  Mass.  432 ;  Benton  v.  Trustees,  140  Mass.  13. 

We  have  found  but  one  case  (Glavin  v.  Rhode  Island  Hospital, 
12  R.  I.  411)  which  takes  ground  against  the  view  we  have  endeav- 
ored to  set  forth,  and  that  does  not  do  so  in  such  pronounced  way 
as  has  been  said.  It  is  there  conceded  (page  428  of  12  R.  I.)  that 
only  the  income  of  the  institution  could  be  held.  But  whatever 
breadth  the  case  may  be  thought  to  have,  we  learn  from  Parks  v. 
University,  supra,  that  the  Legislature  of  the  state  of  Rhode  Island 
has  since  nullified  the  effect  of  the  decision.  In  the  two  cases  last 
cited  from  the  Supreme  Court  of  Massachusetts,  that  court,  while 
upholding  the  doctrine  as  stated  by  us,  yet  makes  use  of  language  in 
the  opinions  which  leaves  room  for  an  inference  that  a  liability  might 
attach  if  the  corporation  had  been  negligent  in  selecting  its  surgeons 
in  the  one  case  and  its  superintendent  in  the  other.  The  case  of 
Hearns  v.  Waterbury  Hospital,  66  Conn.  98,  123-127,  seems  to  con- 
cede that  there  would  be  a  liability  for  negligence  in  selecting 
employees,  but  no  liability  for  the  negligence  of  the  employees  them- 
selves, if  selected  with  due  care.  But  it  is  manifest  that,  if  we  up- 
hold a  rule  which  would  make  an  institution  of  charity  liable  to  a 
patient  who  has  been  injured  by  an  incompetent  servant,  negligently 
selected,  we  destroy  the  principle  we  have  endeavored  to  make  plain, 
that  charitable  trust  funds  cannot  be  diverted  from  the  purposes  of 
the  donor.  For  it  can  make  no  difference,  so  far  as  the  integrity 
of  the  fund  is  concerned,  whether  it  be  sought  after  by  one  who  is 
injured  by  the  negligence  of  a  servant,  or  the  negligent  selection  of 
such  servant;  ... 

Plaintiff  refuses  to  concede  that  the  defendant  is  a  charity  hos- 
pital. If  it  is  not,  it  would  be  liable  to  this  action  though  such 
institutions  were  exempt.  We  are,  however,  of  the  opinion  that  it 
is  a  charitable  institution.  ... 

Concluding,  as  we  have,  that  the  defendant  is  not  liable  to  the 
action,  and  that  plaintiff's  remedy  is  against  those  who  may  have 
inflicted  the  injury  upon  him,  we  reverse  the  judgment.  The  other 
Judges  concur. 


CHAP.   XXII.]  LIABILITY   OF   PUBLIC   AGENCIES.  683 

HEAENS   V.   THE   WATERBUKY   HOSPITAL. 
66  Ckmn.  98.     1895. 

Defendant  is  a  charitable  corporation  having  no  capital  stock 
and  its  members  derive  no  profits  from  it.  Plaintiff  applied  for  treat- 
ment for  a  fractured  knee-cap  and  agreed  to  pay  therefor  the  usual 
compensation.  He  brings  an  action  to  recover  damages  for  injuries 
caused,  as  he  claims,  by  the  unskilful  or  negligent  treatment  he 
received  at  the  hospital  from  attending  surgeons  and  nurses.  Judg- 
ment on  the  pleadings  was  given  for  the  defendant.  On  the  appeal 
the  court  considers  only  the  question  of  whether  the  negligence  alleged 
in  the  complaint  entitles  the  plaintiff  to  a  recovery;  it  is  stipulated 
that  the  court  should  assume  that  the  defendant  exercised  due  care 
in  selecting  the  surgeons  and  nurses. 

Hammersley^  J.  (after  discussing  a  large  number  of  English 
and  American  cases).  It  is  apparent  that  there  are  marked  differ- 
ences in  these  cases,  both  as  to  results  and  the  process  by  which 
results  are  reached.  These  differences  mainly  appear  in  the  tests 
adopted  for  ascertaining  in  each  case  what  is  a  corporate  duty  and 
what  is  a  corporate  neglect;  in  the  confusion  of  the  quasi  trust 
arising  from  the  restriction  which  binds  every  corporation  to  apply 
its  corporate  funds  to  the  purposes  for  which  it  was  organized,  with 
the  relation  of  a  strictly  legal  trustee  to  his  trust  funds;  and  espe- 
cially in  the  various  means  by  which  courts  have  sought  to  escape 
the  patent  injustice  of  applying  the  extreme  doctrine  of  respondeat 
superior  to  the  personal  defaults  of  employees  of  charitable  institu- 
tions. But  we  think  the  drift  of  all  the  cases  clearly  indicates  a 
general  conviction  that  an  eleemosynary  corporation  should  not  be 
held  liable  for  an  injury  due  only  to  the  neglect  of  a  servant,  and  not 
caused  by  its  corporate  negligence,  in  the  failure  to  perform  a  duty 
imposed  on  it  by  law;  and  we  are  satisfied  that  this  general  convic- 
tion rests  on  sound  legal  principles. 

The  law  which  makes  one  responsible  for  his  own  act,  although 
it  may  be  done  through  another,  and  which  is  expressed  by  the 
primary  meaning  of  the  maxim  qui  facit  per  alium  facit  per  se,  is 
based  on  a  principle  of  universal  justice.  The  law  which  makes  one 
responsible  for  an  act  not  his  own,  because  the  actual  wrongdoer 
is  his  servant,  is  based  on  a  rule  of  public  policy. 

The  liability  of  a  charitable  corporation  for  the  defaults  of  its 
servants  must  depend  upon  the  reasons  of  that  rule  of  policy,  and 
their  application  to  such  corporation.  The  rule  is  distinguished 
as  the  doctrine  of  respondeat  superior.  .  .  . 

The  reasons  for  the  rule  have  been  differently  stated  by  others. 
In  Maxmilian  v.  Mayor,  etc.,  62  N.  Y.  160,  the  rule  is  based  upon 


€84  HEAENS   V.    THE    WATERBURY    HOSPITAL.       [CHAl',    XXII. 

the  right  which  the  employer  has  to  select  his  sarvants,  to  discharge 
them  if  not  competent,  and  to  control  them  while  in  his  employ. 

In  Dicey  on  Parties  to  Actions,  Kule  102,  445,  the  liability  is 
stated  as  "  analogous  to  the  liability  of  an  owner  for  injuries  com- 
mitted by  animals  belonging  to  him.  Neither  the  master  nor  owner 
is  liable  because  he  has  himself  done  the  particular  act  complained 
of.  He  is  responsible  because  the  wrong  is  the  result  of  his  having 
in  the  one  case  employed  the  incompetent  servant,  and  in  the  other 
kept  an  animal  of  habits  injurious  to  his  neighbors."  Here  the 
policy  stated  seems  to  be  that  the  master  should  not  only  be  liable 
for  his  negligence  in  the  employment  of  servants,  but  should  be  held 
as  a  guarantor  that  none  employed  by  him  should  abuse  their  oppor- 
tunities. And  a  similar  notion  is  expressed  in  Wood  on  Master  and 
Servant,  §  277,  i.e.,  that  the  penalty  of  liability  is  imposed  in  order 
to  secure  in  the  master  "  the  exercise  of  proper  care  and  diligence 
in  the  selection  and  retention  of  his  agents."  Wharton,  Law  of 
Negligence,  §  157,  gives  as  the  reason  of  the  policy,  that  "  he  who 
puts  in  operation  an  agency  which  he  controls,  while  he  receives  its 
emoluments,  is  responsible  for  the  injuries  it  incidentally  inflicts  " ; 
relying  on  Lord  Broltgham's  statement  in  Duncan  v.  Findlater, 
6  Clark  &  F.  894,  "  I  am  liable  for  what  is  done  for  me  under  my 
orders  by  the  man  I  employ,  for  I  may  turn  him  from  that  employ 
when  I  please:  and  the  reason  that  I  am  liable  is  this,  that  by 
employing  him  I  set  the  whole  thing  in  motion;  and  what  he  does, 
being  done  for  my  benefit  and  under  my  direction,  I  am  responsible 
for  the  consequences  of  doing  it." 

This  defendant  does  not  come  within  the  main  reason  for  the  rule 
of  public  policy  which  supports  the  doctrine  of  respondeat  superior; 
it  derives  no  benefit  from  what  its  servant  does,  in  the  sense  of  that 
personal  and  private  gain  which  w^as  the  real  reason  for  the  rule. 
Again,  so  far  as  the  persons  injured  are  concerned,  especially  if 
they  be  patients  at  the  hospital,  the  defendant  does  not  "  set  the 
whole  thing  in  motion"  in  the  sense  in  which  that  phrase  is  used 
as  expressing  a  reason  for  the  rule.  Such  patient,  who  may  be  in- 
jured by  the  wrongful  act  of  a  hospital  servant,  is  not  a  mere  third 
party,  a  stranger  to  the  transaction  —  he  is  rather  a  participant. 
The  thing  about  which  the  servants  are  employed  is  the  healing  of 
the  sick.  This  is  set  in  motion,  not  for  the  benefit  of  the  defendant, 
but  of  the  public;  surely  those  who  accept  the  benefit,  contributing 
also  by  their  payments  to  the  public  enterprise  (and  not  to  the 
private  pocket  of  the  defendant),  assist  as  truly  as  the  defendant 
in  setting  the  whole  thing  in  motion. 

But  the  practical  ground  on  which  the  rule  is  based  is  simply 
this:  On  the  whole,  substantial  justice  is  best  served  by  making 
a  master  responsible  for  the  injuries  caused  by  his  servant  acting 
in  his  service,  when  set  to  work  by  him  to  prosecute  his  private 


CHAP.   XXII.]  LIABILITY   OF    PUBLIC    AGENCIKS.  G85 

ends,  with  the  expectation  of  deriving  from  that  work  private  benefit. 
This  has  at  times  proved  a  hard  rule,  but  it  rests  upon  a  public 
policy  too  firmly  settled  to  be  questioned. 

\Ye  are  now  asked  to  apply  this  rule,  for  the  first  time,  to  a 
class  of  masters  distinct  from  all  others,  and  who  do  not  and  cannot 
come  within  the  reason  of  the  rule.  In  other  words,  we  are  asked 
to  extend  the  rule  and  to  declare  a  new  public  policy  and  say:  On 
the  whole  substantial  justice  is  best  served  by  making  the  owners  of 
a  public  charity,  involving  no  private  profit,  responsible  not  only 
for  their  own  wrongful  negligence,  but  also  for  the  wrongful  negli- 
gence of  the  serv^ants  they  employ  only  for  a  public  use  and  a  public 
benefit.  We  think  the  law  does  not  justify  such  an  extension  of  the 
rule  of  respondeat  superior.  It  is  perhaps  immaterial  whether  we 
say  the  public  policy  which  supports  the  doctrine  of  respondeat 
superior  does  not  justify  such  extension  of  the  rule;  or  say  that 
the  public  policy  which  encourages  enterprises  for  charitable  pur- 
poses requires  an  exemption  from  the  operation  of  a  rule  based  on 
legal  fiction,  and  which,  as  applied  to  the  owners  of  such  enterprises, 
is  clearly  opposed  to  substantial  justice.  It  is  enough  that  a  chari- 
table corporation  like  the  defendant  —  whatever  may  be  the  prin- 
ciple that  controls  its  liability  for  corporate  neglect  in  the  perform- 
ance of  a  corporate  duty  —  is  not  liable,  on  the  grounds  of  public 
policy,  for  injuries  caused  by  personal  wrongful  neglect  in  the  per- 
formance of  his  duty  by  a  servant  whom  it  has  selected  with  due  care ; 
but  in  such  case  the  servant  is  alone  responsible  for  his  own  wrong. 

This  result  is  justified  by  the  opinions  in  Hall  v.  Smith,  2  Bing. 
156;  HoUiday  v.  St.  Leonard's,  11  C.  B.,  N".  S.  192;  and  Union 
Pac.  Ry.  Co.  v.  Artist,  60  Fed.  Eep.  365,  substantially  on  the  grounds 
above  stated;  and  is  reached,  for  one  reason  or  another,  by  the 
greater  number  of  courts  that  have  dealt  with  this  particular  lia- 
bility of  a  corporation  for  public  or  charitable  purposes. 

There  is  no  error  in  the  judgment  of  the  Superior  Court. 

In  this  opinion  the  other  judges  concurred.^ 

^  "  This  hospital  was  maintained  and  the  physician  provided  for  the  sole  par- 
pose  of  relieving  the  sick  and  injured  employees  without  expense  to  them  and 
without  any  intention  on  the  part  of  the  company  of  making  any  profit  out  of 
the  undertaking.  It  was,  therefore,  a  charitable  institution,  and  it  was  supported 
by  the  contributions  of  employees,  and  carried  on  in  their  Interests.  And  If  the 
company  did  employ  the  physician,  as  claimed  by  respondent,  to  look  after  and 
treat  the  sick  and  injured,  it  Is  not  liable  for  his  negligence,  but  is  responsible 
only  for  want  of  ordinary  care  in  selecting  him.  McDonald  v.  Hospital,  120 
Mass.  432,  21  Am.  Rep.  529 ;  Van  Tassell  v.  Hospital,  15  N.  Y.  Supp.  620 ;  Plr« 
Ins.  Patrol  v.  Boyd,  120  Pa.  St.  624,  15  Atl.  553 ;  Laubheim  r.  Steamship  Co., 
107  N.  Y.  228,  13  N.  E.  781,  1  Am.  St.  Rep.  815 ;  U.  P.  Ry.  Co.  v.  Artist,  60  Fed. 
365.  And  it  is  not  shown  that  the  company  was  derelict  in  that  particular." 
Blchardson  f.  Carbon  Hill  Coal  Co.,  10  Wash.  648,  655,  656. 


686  BEUCE  V.   CENTRAL  METH.   EP.   CHURCH.      [CHAP.  XXII. 

BJIUCE   V.    CENTEAL   METHODIST   EPISCOPAL 
CHUKCH. 

110  N.  W.   (Mich.)   951.     1907. 

Carpenter,  C.  J.  Defendant  is  a  Methodist  Episcopal  Church, 
incorporated  under  Act  No,  11,  page  10,  of  the  Public  Acts  of  1899. 
It  is  charged  in  plaintiff's  declaration  that  while  he  (plaintiff)  was 
at  work  for  a  contractor  tinting  the  ceiling  of  defendant's  church 
edifice,  the  scaffolding  upon  which  he  stood,  and  which  was  furnished 
by  defendant,  and  which  was  defective  owing  to  defendant's  negli- 
gence, broke,  and  that  he  was  thrown  to  the  floor  and  injured.  De- 
fendant demurred  to  this  declaration  upon  the  ground  that  it  "is 
not  liable  for  any  neglect  or  default  of  any  agent  or  servant  having 
the  care  and  custody  of  its  property,"  and  upon  other  grounds  which 
need  not  be  mentioned.  This  demurrer  was  sustained,  and  judgment 
entered  in  defendant's  favor.  Plaintiff  asks  us  to  reverse  that 
judgment. 

I  agree  with  my  Brother  Ostrander  that  we  should  decide  this 
case  upon  the  assumption  that  defendant's  property  "  is  not  held 
subject  to  any  express  trust  created  by  the  grantor  or  vendor  of  the 
property,"  and  that  "  we  should  proceed  upon  the  theory  that  the 
defendant  may  not  devote  its  property  to  the  use  of  any  other  relig- 
ious denomination  or  to  other  than  religious  purposes."  The  principle 
of  respondeat  superior  —  that  one  is  responsible  for  the  acts  of  his 
agent  —  applies,  and  makes  defendant  liable  for  the  wrong  done  to 
plaintiff,  unless  defendant  is  exempt  from  the  operation  of  that  prin- 
ciple because  it  is  administering  a  charitable  trust.  The  claim  is 
made  that  it  is  so  exempt  by  reason  of  Downes  v.  Harper  Hospital, 
decided  by  this  court  in  1894,  and  reported  in  101  Mich.  555.  See, 
also,  Pepke  v.  Grace  Hospital,  130  Mich.  493.  In  Downes  v.  Harper 
Hospital  this  court  held,  as  correctly  stated  in  the  headnote  to 
that  case :  "  A  corporation  organized  and  maintained  for  no  private 
gain,  but  for  the  proper  care  and  medical  treatment  of  the  sick,  and 
to  that  end  to  manage  a  trust  fund  donated  for  that  purpose,  cannot 
be  made  liable  for  injuries  sustained  by  a  patient  by  reason  of  the 
negligent  acts  of  its  managers  or  employees." 

It  is  urged  that  that  case  does  not  apply,  because  a  church  fund 
which  is  a  fund  devoted  to  religious  purposes  is  not  —  like  a  fund 
devoted  to  the  care  and  medical  treatment  x)f  the  sick  —  a  charitable 
trust  fund.  .  .  .  "We  are  compelled  to  hold  that  funds  devoted  to 
a  religious  purpose  are  charitable  trust  funds.  I  conclude,  therefore, 
that  we  cannot  hold  the  principle  of  the  decision  in  Downes  v. 
Harper  Hospital,  supra,  inapplicable,  upon  the  ground  that  the  fiimds 
of  the  church  are  not  charitable  trust  funds. 


CHAP.   XXII.]  LIABILITY   OF   PUBLIC   AGENCIES.  687 

This  leads  us  to  the  inquiry :  Is  there  any  other  ground  upon  which 
we  should  hold  Downes  v.  Harper  Hospital  inapplicable?  There  is 
this  distinction  between  Downes  v.  Harper  Hospital  and  this  case, 
viz.,  in  the  Downes  Case  plaintiff  was  a  patient  in  defendant's  hos- 
pital, and,  therefore,  a  beneficiary  of  the  charitable  trust  administered 
by  the  hospital  corporation,  while  in  this  case  he  was  an  employee  of 
defendant's  contractor,  and  not  a  beneficiary  of  the  trust  adminis- 
tered by  defendant.  If  we  hold  that  the  principle  of  the  Downes 
Case  applies  to  the  case  at  bar,  we  must  declare  that  that  principle 
exempts  a  corporation  administering  a  charitable  trust  from  all 
liability  for  the  torts  of  its  agents,  and,  as  a  corporation  can  act  only 
by  and  through  its  agents,  that  it  is  exempt  from  all  liability  what- 
soever for  torts.  What  is  the  principle  underlying  the  Downes  Case  ? 
Does  it  exempt  a  corporation  administering  a  charitable  trust  from 
all  liability  for  torts  ?  Those  who  answer  this  question  in  the  affirma- 
tive cannot  support  their  position  by  appealing  to  the  reasoning  of 
the  opinion  in  that  case.  While  that  opinion  says,  "  The  law  jeal- 
ously guards  the  charitable  trust  fund,  and  does  not  permit  it  to  be 
frittered  away  by  the  negligent  acts  of  those  employed  in  its  execu- 
tion," the  pith  of  its  reasoning  in  my  judgment  is  contained  in  the 
following  words :  "  It  certainly  follows  that  the  fund  cannot  be  indi- 
rectly diverted  by  the  tortious  or  negligent  acts  of  the  managers  of 
the  fund,  or  their  employees,  though  such  acts  result  in  damages  to 
an  innocent  beneficiary.  Those  voluntarily  accepting  the  benefit  of 
the  charity  accept  it  upon  this  condition." 

Let  us  determine  the  principle  underlying  the  Downes  Case.  In 
this  undertaking  we  are  not  aided  by  cases  like  Fire  Insurance  Patrol 
V.  Boyd,  120  Pa.  624,  which  held  that  a  principal  is  not  liable  for  the 
negligence  of  one  acting  in  the  capacity  of  a  governmental  agent  — 
for  neither  the  Harper  Hospital  nor  its  offending  servants  were  act- 
ing in  that  capacity  —  but  we  do  receive  aid,  and  great  aid,  by 
examining  decisions  similar  to  that  of  Downes  v.  Harper  Hospital 
made  by  other  courts.  Among  those  decisions  are:  Feoffees  of 
Heriot's  Hospital  v.  Ross,  12  C.  &  F.  506 ;  McDonald  v.  Mass.  General 
Hospital,  120  Mass.  432 ;  Williams  v.  Industrial  School,  95  Ky.  251 ; 
Perry  v.  House  of  Refuge,  63  Md.  20 ;  Richmond  v.  Long's  Adm'rs, 
17  Grat.  (Va.)  375;  Heams  v.  Waterbury  Hospital,  Q>%  Conn.  98; 
Eighmy  v.  U.  P.  Ry.  Co.,  93  Iowa,  538 ;  Joel  v.  Women's  Hospital, 
89  Hun  (N.  Y.),  73;  Van  Tassel  v.  Eye  and  Ear  Hospital  (Sup.), 
15  N.  Y.  Supp.  620;  Collins  v.  Medical  School  and  Hospital  (Sup.), 
69  N.  Y.  Supp.  106 ;  Connor  v.  Sisters  of  the  Poor,  70  N.  P.  514, 
10  S.  &  C.  P.  Dec.  86;  Glavin  v.  Rhode  Island  Hospital,  12  R.  I. 
411;  Union  Pacific  Ry.  Co.  v.  Artist,  60  Fed.  365;  Powers  v.  Mass. 
Homeopathic  Hospital,  47  C.  C.  A.  122.  In  each  of  these  cases, 
except  that  of  Glavin  v.  Rhode  Island  Hospital,  it  was  held,  as  held 
in  the  Downes  Case,  that  the  beneficiary  of  the  charitable  trust  could 


688  BRUCE   V.   CENTRAL   METH.   EP.    CHURCH.       [CHAP.   XXII. 

not  recover  for  injuries  resulting  from  the  torts  of  the  agents  of  the 
trustee  corporation.  Inasmuch  as  this  court  is  committed  to  this 
doctrine,  we  need  not  consider  the  decision  of  Glavin  v.  Rhode  Island 
Hospital,  which  denies  it.  We  are  endeavoring  to  ascertain,  not 
whether  the  doctrine  is  sound,  but  its  true  underlying  principle. 
Decisions  denying  a  doctrine  afford  no  aid  in  construing  it.  In  the 
latest  of  these  cases  (Powers  v.  Mass.  Homeopathic  Hospital)  — the 
opinion  is  exhaustive  and  elaborate,  and  discusses  nearly  all  the  au- 
thorities —  it  is  held  that  the  ground  upon  which  liability  is  denied 
is  that  of  assumed  risk.  The  court  saying :  "  One  who  accepts  the 
benefit  of  a  public  or  of  a  private  charity,  enters  into  a  relation  which 
exempts  his  benefactor  from  liability  for  the  negligence  of  his  ser- 
vants in  administering  the  charity,  at  any  rate  if  the  benefactor  has 
used  due  care  in  selecting  those  servants."  If  this  is  correct,  it  is 
scarcely  necessary  to  say  that  that  principle  has  no  application  to 
the  case  at  bar.  Is  it  correct?  The  ground  upon  which  liability 
is  denied  in  nearly  all  the  foregoing  cases  is  that  stated  in  the  Downes 
Case,  viz.,  that  it  would  thwart  the  purpose  of  the  trust;  that  is,  it 
would  oppose  the  will  of  the  founder  of  the  trust  to  pay  from  the 
trust  funds  damages  caused  by  an  agent's  torts.  It  is  entirely  logical 
to  say  that  this  will  must  be  recognized  by  beneficiaries  of  the  trust. 
It  may  justly  be  said  that  the  benefit  of  the  trust  is  extended  to  them 
and  accepted  by  them  upon  the  implied  condition  that  they  shall 
recognize  that  will.  By  becoming  beneficiaries  they  agree  to  recognize 
it.  But  I  can  see  no  ground  upon  which  it  may  be  held  that  the 
rights  of  those  who  are  not  beneficiaries  of  a  trust  can  in  any  way 
be  affected  by  the  will  of  its  founder.  The  rights  of  such  persons 
are  those  created  by  general  laws,  and  the  duties  of  those  administer- 
ing the  trust  to  respect  those  rights  are  also  created  by  general  laws. 
The  doctrine  that  the  will  of  an  individual  shall  exempt  either 
persons  or  property  from  the  operation  of  general  laws  is  inconsistent 
with  the  fundamental  idea  of  government.  It  permits  the  will  of  the 
subject  to  nullify  the  will  of  the  people.  Nor  can  I  conceive  any 
ground  upon  which  a  court  can  hold  that  effect  can  be  given  to  that 
will  when  it  relates  to  property  devised  or  conveyed  for  the  purpose 
of  a  charitable  trust.  Such  a  holding  must  rest  upon  the  argument 
that  the  advantages  reaped  by  the  public  from  such  trusts  justify  the 
exemption;  that  is,  as  applied  to  this  case,  the  advantages  to  the 
public  justify  defendant's  exemption  from  liability  for  wrongs  done 
to  individuals.  If  this  argument  is  sound  —  and  its  soundness  may 
be  questioned,  for  there  are  those  who  will  deny  that  the  advantages 
to  the  public  justify  the  wrong  to  the  individual  —  it  should  be 
addressed  to  the  legislative,  and  not  to  the  judicial,  department  of 
the  government.  It  is  our  duty  as  judges  to  apply  the  law.  We  have 
no  authority  to  create  exemptions  or  to  declare  immunity. 

It  is  true  that  in  many  of  the  cases  above  cited,  it  is  stated  that 


CHAP.   XXII.]  LIABILITY  OF   PUBLIC   AGENCIES.  689 

those  administering  a  trust  fund  are  not  responsible  for  the  torts 
of  their  agents,  because  damages  for  such  torts  cannot  be  paid  from 
the  trust  fund.  This  statement  was  first  made  by  the  House  of  Lords 
of  England  in  1839  in  deciding  the  case  of  Duncan  v.  Findlater, 
6  C.  &  F.  894.  In  a  subsequent  case  (Mersey  Docks  v.  Gibbs,  11  H. 
of  L.  Cases,  686)  the  same  tribunal  said  that  this  statement  was 
unnecessary  to  the  decision  of  the  case  in  which  it  was  announced, 
and  that  it  was  an  incorrect  statement  of  the  law.  Precisely  the  same 
may  be  said  of  the  repetition  of  that  statement  in  the  foregoing  cases. 
We  are  justified  in  saying  that  the  statement  was  unnecessary  to 
their  decisions,  because,  in  determining  the  noncontract  obligation 
of  a  trustee  toward  the  beneficiaries  of  his  trust  (and  that  was  the 
question  involved  in  each  of  these  cases),  it  was  not  necessary  to 
determine  his  obligation  to  others. 

It  is  equally  true  that  the  proposition  that  trust  funds  cannot  be 
used  to  compensate  wrongs  committed  by  the  agent  of  the  trustee 
is  not  a  correct  statement  of  the  law.  That  proposition,  in  my  judg- 
ment, must  rest  on  the  principle  —  which  I  have  heretofore  endeav- 
ored to  prove  unsound  —  that  the  will  of  an  individual  exempts 
property  from  the  operation  of  the  general  laws  of  the  land.  It 
should  also  be  said  that,  if  the  trustee  be  an  individual,  he  is,  like 
other  individuals,  personally  responsible  for  wrongs  committed  by 
his  agents  (Powers  v.  Mass.  Homeopathic  Hospital,  supra;  Shepard 
V.  Creamer,  160  Mass.  496 ;  Baker  v.  Tibbetts,  162  Mass.  468 ;  Ben- 
nett V.  Wyndham,  4  De  Gex,  F.  &  J.  259),  and,  if  he  is  adjudged 
liable  therefor,  though  an  execution  will  not  run  against  the  trust 
funds,  because  the  judgment  is  against  him  personally,  he  may  dis- 
charge that  liability,  or  reimburse  himself  if  he  has  discharged  it, 
from  the  trust  funds.  Powers  v.  Mass.  Homeopathic  Hospital,  supra, 
and  cases  therein  cited.  Parmenter  v.  Barstow,  22  R.  I.  246,  is  not 
opposed  to  this  principle.  That  case  holds  no  more  than  this :  that 
trust  property  may  not  "  be  impaired  or  dissipated  through  the  negli- 
gence or  improvidence  of  trustees."  This  does  not  mean  that  the 
trustee  may  not  reimburse  himself  for  liability  occasioned,  not  by 
his  own,  but  by  his  servant's  negligence.  The  circumstance  that  the 
trustee  is  a  corporation  instead  of  an  individual  cannot  affect  the 
question  of  liability.  If  authority  is  needed  to  justify  this  statement 
—  which  necessarily  follows  from  the  elementary  principle  of  law 
that  corporations,  like  individuals,  are  amenable  to  the  law  of  the 
land  —  it  is  found  in  the  following  cases :  Gilbert  v.  Trinity  House, 
L.  R.  17  Q.  B.  Div.  795;  Foreman  v.  Mayor  of  Canterbury,  L.  R. 
6  Q.  B.  214;  Mersey  Docks,  etc.,  v.  jGribbs,  supra.  The  circumstance 
that  the  trustee  is  a  corporation  and  not  an  individual  may,  however, 
affect  the  method  of  satisfying  a  judgment  in  favor  of  a  plaintiff 
who  has  been  wronged  by  an  agent's  torts.  I  can  see  no  reason  why 
the  execution  issued  in  such  a  case  may  not  be  levied  upon  the  trust 

44 


690  BBUCE   V.    CENTRAL   METH.   EP.    CHURCH.       [CHAP.   Xill. 

propert}',  particularly  if  that  constitute  the  entire  property  of  the 
corporation. 

It  has  been  suggested  (see  Hearns  v.  Waterbury  Hospital,  66  Conn. 
125),  that  the  true  principle  underlying  the  Downes  and  similar  cases 
is  that  the  "  defendant  does  not  come  within  the  main  reason  for  the 
rule  of  public  policy  which  supports  the  doctrine  of  respondeat 
superior.  It  derives  no  benefit  from  what  its  servant  does  in  the 
sense  of  that  personal  and  private  gain  which  was  the  real  reason 
for  the  rule."  This  suggestion  —  which  is  not  a  necessary  part  of 
the  reasoning  in  the  decision  of  that  case  —  is  without  force,  unless 
it  may  be  said  that  the  doctrine  of  respondeat  superior  has  no  applica- 
tion where  the  business  in  which  an  agent  is  employed  is  not  carried 
on  for  the  purpose  of  profit.  I  think  one  cannot  carefully  read  the 
elaborate  opinion  in  the  Heams  Case  and  examine  the  authorities 
therein  cited  (see,  particularly,  Foreman  v.  Mayor  of  Canterbury, 
L.  R.  6  Q.  B.  214;  Gilbert  v.  Trinity  House,  L.  E.  17  Q.  B.  Div.  795; 
Levingston  v.  Guardians,  etc.,  2  I.  R,  c.  f .  202 ;  and  Mersey  Docks 
V.  Gibbs,  supra)  without  reaching  the  conclusion  that  the  doctrine  of 
respondeat  superior  does  apply,  though  the  business  is  not  carried  on 
for  the  purpose  of  profit. 

I  conclude  from  this  reasoning  that  corporations  administering 
a  charitable  trust,  like  all  other  corporations,  are  subject  to  the  gen- 
eral laws  of  the  land,  and  cannot,  therefore,  claim  exemption  from 
responsibility  for  the  torts  of  their  agents,  unless  that  claim  is  based 
on  a  contract  with  the  person  injured  by  such  a  tort,  and  that 
Downes  v.  Harper  Hospital  and  other  similar  cases  are  consistent 
with  this  rule.  They  rest  upon  the  principle  correctly  stated  in 
Powers  V.  Mass.  Homeopathic  Hospital,  supra,  viz.,  that  the  bene- 
ficiary of  such  charitable  trust  enters  into  a  contract  whereby  he 
assumes  the  risk  of  such  torts.  It  is  not  surprising  that  years  should 
have  elapsed  before  the  correct  legal  principle  governing  these  cases 
was  announced  in  Powers  v.  Mass.  Homeopathic  Hospital.  The 
discovery  of  correct  legal  principles,  like  the  discovery  of  scientific 
and  social  truths,  requires  time  and  patient  investigation.  .  .  . 

The  judgment  of  the  court  below  sustaining  the  demurrer  is  re- 
versed, and  the  defendant  will  be  given  20  days  in  which  to  plead 
to  the  declaration. 

McAlvay,  Grant,  Hooker,  Montgomery,  and  Moore,  JJ., 
concurred. 

OsTRANDER,  J.,  olso  wTote  an  opinion  in  which  Blair,  J.,  con- 
curred. 


CHAP.  XXII.]  LIABILITY  OF  PUBLIC  AGENCIES.  691 


BRILL   V.   EDDY. 

115    Mo.   596.     1893. 

Action  to  recover  damages  for  personal  injuries.  From  a  judg- 
ment for  plaintiff,  defendants  appeal. 

McMahan  was  employed  by  defendants  as  day  watchman,  and  it 
was  his  duty  to  keep  boys  out  of  the  yards  and  away  from  the  cars. 
The  plaintiff,  a  boy  under  the  age  of  eighteen,  was  stealing  a  ride 
on  one  of  defendants'  trains  when  McMahan  pulled  him  off,  thus 
occasioning  the  injury  complained  of.  A  city  ordinance  read  in  evi- 
dence made  it  a  misdemeanor  for  a  boy  under  the  age  of  eighteen 
years  to  hang  to  a  moving  car. 

Black,  P.  J.  The  plaintiff,  a  minor  suing  by  his  next  friend, 
brought  this  action  against  the  defendants,  who  are  the  receivers 
of  the  Missouri,  Kansas  &  Texas  Railway  Company,  to  recover 
damages  for  the  loss  of  an  arm.  The  chief  complaints  made  in  this 
court,  are:  first,  that  there  is  no  evidence  of  negligence  on  the  part 
of  McMahan;  second,  if  McMahan  was  guilty  of  negligence  the 
defendants  are  not  liable  because  he  was  acting  in  the  capacity  of 
a  police  officer.  .  .  . 

The  evidence  on  the  other  issue  discloses  the  following  facts: 
Some  three  or  four  months  before  the  accident  the  mayor  of  the  city 
of  Sedalia,  at  the  request  of  some  of  the  railroad  officials,  appointed 
McMahan  a  special  policeman.  The  appointment  was  in  writing 
signed  by  the  mayor.  McMahan  had  been  appointed  for  a  like  pur- 
pose and  in  a  like  manner  in  the  spring  of  every  year  for  a  period 
of  eight  or  nine  years.  During  all  that  time  he  was  employed  by 
the  railroad  company  as  a  watchman  until  it  passed  into  the  hands 
of  the  receivers,  and  then  by  them.  He  wore  a  policeman's  star, 
but  he  did  not  wear  the  uniform  prescribed  for  regular  police  officers 
and  did  not  report  to  any  city  officer.  It  seems  he  had  made  some 
arrests  prior  to  his  last  appointment.  During  the  eight  or  nine 
years  it  was  his  duty  to  keep  trespassers  out  of  the  yards,  to  prevent 
persons  from  interfering  with  the  men  while  at  work,  to  see  that 
the  shops  were  properly  closed  at  night,  and  to  carry  the  shop  mail,. 
It  was  also  his  duty  to  drive  boys  out  of  the  yards  and  keep  them  off 
the  cars. 

The  ordinance  above  mentioned  provides  that  any  minor  under 
the  age  of  eighteen  years  who  shall,  without  authority  to  do  so,  climb 
upon,  enter  or  hang  to  any  car  while  in  motion,  shall  be  deemed 
guilty  of  a  misdemeanor;  and  by  another  ordinance  it  is  provided 
that  the  police  officers  shall,  without  warrant,  arrest  any  one  found 
guilty  of  violating  the  city  ordinances. 

It  is  no  uncommon  thing  for  corporations  and  individuals  to 


692  BRILL  V.   EDDY.  [CHAP.   XXII. 

employ  duly  appointed  police  officers  to  watch  their  property;  and 
if  such  an  officer  so  employed  make  an  arrest  for  disorderly  conduct, 
the  presumption  is  that  he  acted  in  his  official  capacity  as  the  agent 
of  the  state,  and  not  as  the  agent  of  his  employer.  Being  an  officer 
whose"  duties  are  prescribed  by  law,  it  should  be  presumed,  until  the 
contrary  is  made  to  appear,  that  his  employment  contemplates  only 
the  exercise  of  such  powers  as  the  law  confers  upon  him.  2  Wood's 
Eailway  Law,  1212;  Tolchester  Beach  Improvement  Co.  v.  Stein- 
meier,  20  Atl.  Rep.  188 ;  Jardine  v.  Cornell,  14  Atl.  Rep.  590.  The 
presumption  is,  however,  one  of  fact,  and  it  may  be  shown  that  in 
making  the  arrest  he  acted  under  orders  of  his  employer,  in  which 
event  the  employer  would  be  liable  for  the  unlawful  acts  of  the 
officer.  Under  the  ordinance  before  mentioned  McMahan  as  a  police 
officer  had  a  right  to  arrest  the  boy  on  view  for  hanging  to  the  car; 
and  if  the  evidence  tended  to  show  that  he  committed  the  negligent 
act  when  making  or  attempting  to  make  the  arrest,  it  would  follow 
from  what  has  been  said  that  the  question  whether  he  acted  under 
the  orders  of  defendant  or  their  authorized  agent  would  be  one  for 
the  jury. 

But  there  is  no  such  evidence.  His  evidence  as  well  as  the  circum- 
stances in  the  case  show  that  he  did  not  intend  to  arrest  the  boy. 
His  only  purpose  was  to  take  the  boy  off  the  car  and  to  drive  him 
out  of  the  yards,  a  thing  not  within  the  line  of  his  duties  as  a  police 
officer,  but  a  duty  devolved  upon  him  by  the  defendants.  He  was 
their  paid  servant,  and  as  such  charged  with  the  performance  of 
duties  other  than  those  pertaining  to  the  office  of  a  policeman. 
At  the  time  of  the  accident  he  was  engaged  in  enforcing  the  rules 
and  regulations  prescribed  by  the  defendants.  In  attempting  to 
remove  the  boy  from  the  car  he  was  not  doing,  or  intending  to  do, 
any  act  devolved  upon  him  as  an  officer  of  the  law,  and  the  fact 
that  he  had  been  appointed  a  special  policeman  has  nothing  whatever 
to  do  with  this  case.  .  .  .  Judgment  affirmed.^ 

•  "  But  it  is  said  that  John  M.  Klley  was  a  policeman,  and  therefore  appellants 
are  not  responsible  for  his  attack  upon  appellee.  Whether,  at  the  time  of  the 
injuries  complained  of,  Klley  was  acting  as  a  policeman  or  as  agent  of  appellants 
must  depend  upon  the  acts  done  by  him.  Because  he  was  a  police  oflScer,  It  does 
not  follow  that  all  his  acts  were  those  of  a  policeman ;  and  because  he  was  an 
agent  of  appellants.  It  does  not  follow  that  all  his  acts  were  those  of  such  agent. 
Even  if  he  were  a  regular  patrolman,  called  in  oft  the  street  by  appellants  or  their 
agents  to  aid  in  enforcing  the  regulations  of  the  theatre,  he  would,  for  such  pur- 
pose, be  only  an  agent  of  appellants,  and  for  his  conduct  as  such  agent,  within 
the  scope  of  his  employment,  appellants  would  be  responsible.  If,  however,  after 
entering  the  theatre  he  should  discover  appellee  in  the  act  of  violating  a  criminal 
law  of  the  state  or  a  penal  ordinance  of  the  city,  and  should  proceed  to  arrest  hira 
for  it,  such  act  of  arrest  would  be  that  of  a  police  oflScer.  And  if  such  arrest  were 
made  on  the  officer's  own  motion,  without  direction,  express  or  implied,  on  the 
part  of  appellants,  then  appellants  would  not  be  responsible.  Jardine  v.  Cornell, 
50  N.  J.  L.  485."     Dickson  v.  Waldron,  135  Ind.  507,  521. 

See,  also,  Sharp  v.  Erie  R.  Co.,  184  N.  Y.  100,  and  Tyson  v.  Bauland  Co.,  186 
N.  Y.  397. 


CHAP.  XXIII.]        LIABILITY   OF   MASTER   FOB   CRIMES. 


693 


CHAPTEK    XXni. 
Xjability  of  Master  for  Penalties  and  Crimes. 

COMMONWEALTH   v.   NICHOLS. 

10  Mete.  (Mass.)  259.     1845. 

At  the  trial  of  the  defendant,  in  the  court  of  common  pleas,  before 
CusHiNG,  J.,  upon  an  indictment  on  Rev.  Sts.  c.  47,  §  2,  for  selling 
spirituous  liquor  without  license,  a  witness  testified  that  he  called 
at  a  grocery  shop  in  Lowell,  kept  by  the  defendant ;  that  the  defendant 
was  not  present,  but  that  he  found  a  man  there  who  sold  him  a  glass 
of  spirituous  liquor,  to  be  used  in  the  shop;  but  that  he  did  not 
know  whether  the  man  was  in  the  defendant's  employ  or  not.  An- 
other witness  testified  that  he  knew  the  shop  kept  by  the  defendant, 
and  that  the  defendant  had  a  clerk  in  his  employ;  that  he  (the 
witness)  once  went  into  said  shop,  to  purchase  groceries,  when  the 
clerk  alone  was  there,  and  that,  after  he  had  made  his  purchases, 
he  went  to  a  cask,  drew  a  glass  of  liquor,  and  drank  it,  but  did  not 
pay  for  it,  and  was  not  charged  for  it,  to  his  knowledge.  On  cross- 
examination,  this  witness  said  he  had  heard  the  defendant  expressly 
forbid  his  clerk  to  sell  any  spirituous  liquor  in  a  less  quantity  than 
twenty-eight  gallons. 

The  defendant's  counsel  requested  the  judge  to  instruct  the  jury, 
that  if  they  doubted,  upon  the  whole  evidence,  whether  these  sales 
were  made  by  the  authority  of  the  defendant,  or  by  his  consent,  they 
must  acquit  him.  But  the  judge  declined  so  to  do,  and  instructed 
the  jury,  that  if  they  were  satisfied,  beyond  a  reasonable  doubt,  that 
the  sales  were  made  by  the  defendant,  or  any  person  in  his  employ, 
and  in  his  shop,  they  would  be  warranted  in  finding  him  guilty. 
The  jury  found  the  defendant  guilty,  and  he  alleged  exceptions  to 
the  instructions. 

Dewey,  J.  The  question  here  raise^  as  to  the  liability  of  the 
principal  to  be  punished  criminally  for  the  acts  of  his  agent  or 
servant,  in  which  he  does  not  directly  participate  personally,  is  cer- 
tainly not  free  from  difficulty.  As  to  civil  liabilities,  a  broader  and 
more  general  principle  of  responsibility  applies,  and  the  master 
or  principal  may  be  held  to  answer  in  damages  for  default  and  mis- 
doings with  which  he  had  no  other  connection  than  that  which  arises 
from  the  fact  that  the  injury  was  occasioned  by  one  employed  in  his 


694  COMMONTWEALTH   V.    NICHOLS.  [CHAP.    XXIII. 

service.  As  a  general  rule,  something  beyond  this  is  necessary  to 
charge  the  master  criminally  for  the  acts  done  by  the  servant.  There 
must  be  such  a  direct  participation  in  the  act,  or  such  assent  and 
concurrence  therein,  as  would  involve  him  morally  in  the  guilt  of 
tlie  action.  Hence  the  cases  are  comparatively  rare,  and  may  be 
considered  as  exceptions  to  the  general  rule,  where  by  legal  rules 
a  party  is  charged  criminally  for  acts  of  his  servant  done  without 
his  knowledge  and  assent.  The  case  of  a  bookseller,  or  publisher 
of  a  newspaper,  is  to  some  extent  one  creating  such  liability ;  to  what 
precise  extent  is,  perhaps,  yet  an  unsettled  question.  Kex  v.  Almon, 
5  Bur.  2686,  a  leading  case  on  that  subject,  only  carried  the  doctrine 
so  far  as  to  hold  that  such  relation  to  the  act  of  sale  by  a  servant 
was  prima  facie  evidence  to  establish  the  liability  of  the  party,  but 
was  not  conclusive  and  might  be  controlled.  It  was  said  by  Lord 
Miys'SFiELD  that  he  might  avoid  the  effect  of  it  by  showing  "  that 
he  was  not  privy  nor  assenting  to  it,  nor  encouraging  it."  So  also 
it  is  said  that  the  defendant,  in  such  cases,  may  rebut  the  presump- 
tion by  showing  that  the  libel  was  sold  contrary  to  his  orders,  or 
under  circumstances  negativing  all  privity  on  his  part.  2  Stark,  on 
Slander  (2d  ed.),  34. 

The  general  rule,  however,  has  been  stated,  I  think,  somewhat 
more  broadly  as  to  the  liability  of  booksellers  and  publishers,  re- 
specting all  publications  issued  from  their  establishments  in  the 
regular  course  of  business;  and  they  have  been  held  answerable 
criminally  in  such  cases,  although  the  particular  act  of  sale  or 
publication  was  done  without  their  knowledge.  1  Hawk.  c.  73,  §  10 ; 
Eex  V.  Walter,  3  Esp.  E.  21.  In  the  recent  case  of  Eex  v.  Gutch 
and  others,  1  Mood.  &  Malk.  437,  where  it  appeared  that  Gutch  was 
residing  at  a  distance,  was  in  ill  health,  and  not  interfering  with 
the  conducting  of  the  paper,  the  rule  is  thus  stated :  "  A  person 
who  derives  profit  from,  and  who  furnishes  means  for  carrying  on 
the  concern,  and  intrusts  the  conduct  of  the  publication  to  one  whom 
he  selects,  may  be  said  to  cause  to  be  published  what  actually  appears, 
and  ought  to  be  answerable,  although  you  cannot  show  that  he  was 
individually  concerned  in  the  act  of  publication."  But  in  that  case, 
Lord  Tenterden,  in  delivering  the  opinion  of  the  court,  says,  "  I  do 
not  mean  to  say,  that  some  possible  case  may  not  occur,  in  which  he 
would  be  exempt;  but  generally  speaking,  he  is  answerable." 

Another  class  of  cases,  where  the  liability  of  the  master  for  the 
criminal  acts  of  the  servant  has  been  recognized,  has  arisen  under 
revenue  laws  and  police  regulations.  In  Attorney  General  v.  Siddon, 
1  Crompt.  &  Jerv.  220,  and  1  Tyrw.  41  (a  case  of  concealing  smug- 
gled goods),  it  was  held  that  a  trader  is  liable  to  a  penalty  for  the 
illegal  act  of  a  servant,  done  in  the  conduct  of  his  business,  with  a 
view  to  protect  the  smuggled  goods,  though  the  master  be  absent 
{it  the  time  the  act  is  done.    It  seems  here  again  to  have  been  held 


CHAP.   XXIII.]         LIABILITY   OP   MASTEE   FOB   CRIMES.  695 

only  prima  facie  evidence,  and  that  the  master  might  have  introduced 
evidence  for  the  purpose  of  rebutting  such  prima  facie  case. 

In  Attorney  General  v.  Riddle,  2  Crompt.  &  Jerv.  493,  and  2  Tyrvr. 
523,  which  was  an  information  under  St.  1  Geo.  4,  c.  58,  prohibiting 
the  delivery  of  paper  not  tied  up  and  labelled,  and  requiring,  before 
it  is  removed  from  the  place  of  manufacture,  that  it  be  enclosed  in  a 
labelled  wrapper,  the  evidence  was,  that  the  wife  of  the  defendant, 
having  authority  from  him  to  do  certain  acts  in  his  trade  of  a  paper 
manufacturer,  pledged  paper  which  had  no  wrapper  or  label  on  it, 
the  court  held  that  the  authority  of  the  wife  was  a  question  for  the 
jury,  and  that  it  ought  to  have  been  left  to  the  jury  to  decide  whether 
or  not  the  acts  of  the  wife,  under  the  circumstances  stated,  were  done 
by  the  authority  of  the  husband. 

It  seems  to  us  that  the  case  of  a  sale  of  liquors  prohibited  by  law, 
at  the  shop  or  establishment  of  the  principal,  by  an  agent  or  servant 
usually  employed  in  conducting  his  business,  is  one  of  that  class  in 
which  the  master  may  properly  be  charged  criminally  for  the  act  of 
the  servant.  But  in  looking  at  the  question  presented  by  the  bill  of 
exceptions  in  the  present  cases,  and  considering  what  should  be  stated 
as  the  rule  as  to  the  responsibility  of  the  principal  or  master  in  such 
cases,  the  court  have  come  to  the  opinion  that  the  law  was  stated  too 
strongly,  upon  that  point,  against  the  defendant,  inasmuch  as  the 
defendant,  under  the  instructions  given,  might  have  been  found  guilty 
of  the  charge  in  the  indictment,  if  a  sale  had  been  made  in  his  shop 
by  any  person  in  his  employment,  without  any  reference  to  the  cir- 
cumstances under  which  the  sale  was  made,  and  although  against  the 
will  and  in  contravention  of  the  orders  of  the  defendant. 

We  tkink  that  a  sale  by  the  servant,  in  the  shop  of  the  master,  is 
only  prima  facie  evidence  of  such  sale  by  the  master  as  would  subject 
him  to  the  penalty  for  violating  the  statute  forbidding  the  sale  of 
spirituous  liquors  without  license;  that  the  relation  of  these  parties, 
the  fact  that  the  defendant  was  in  possession  of  the  shop  and  was 
the  owner  of  the  liquor,  and  that  the  sale  was  made  by  his  servant, 
furnish  strong  evidence  to  authorize  and  require  the  jury  to  find  the 
defendant  guilty.  But  we  cannot  say  that  no  possible  case  can  arise 
in  which  the  inference  from  all  these  facts  may  not  be  rebutted  by 
other  proof.  Unexplained,  they  would  be  sufficient  to  convict  the 
party.  So  too  it  should  be  understood  that  merely  colorable  dissent, 
or  a  prohibition  not  to  sell,  however  publicly  or  frequently  repeated, 
if  not  made  bona  fide,  will  not  avail.  But  if  a  sale  of  liquor  is  made 
by  the  servant  without  the  knowledge  of  the  master,  and  really  in 
opposition  to  his  will,  and  in  no  way  participated  in,  approved  or 
countenanced  by  him,  and  this  is  clearly  shown  by  the  master,  he 
ought  to  be  acquitted.  New  trial  granted. 


^96  COMMONWEALTH   V.   KELLEY.  [CHAP.   XXIII. 

Morse  v.  State,  6  Conn.  9  (1825).  Information  and  conviction 
for  violation  of  a  statute  prohibiting  the  giving  of  credit  to  college 
Btudents.  Hosmee,  C.  J.  .  .  .  "  It  is  fairly  to  be  inferred  that  no 
credit  was  given  to  Van  Zandt  by  the  defendant,  but  by  Northam,  his 
barkeeper,  only,  without  the  knowledge  or  consent  of  Morse,  and 
against  his  express  directions.  In  the  performance  of  this  act 
Northam  was  not  the  defendant's  agent.  He  was  not  authorized  to 
give  the  credit,  either  expressly  or  in  the  usual  course  of  his  business, 
but  was  prohibited  from  doing  it.  Notwithstanding  this,  which  the 
court  below  impliedly  admitted,  the  jury  were  charged  that  if  the 
defendant  subsequently  assented  to  the  acts  of  Northam,  he  ratified 
them,  and  made  them  his  own.  This  was  an  unquestionable  error. 
In  the  law  of  contracts  a  posterior  recognition,  in  many  cases,  is 
equivalent  to  a  precedent  command;  but  it  is  not  so  in  respect  of 
crimes.  The  defendant  is  responsible  for  his  own  acts,  and  for  the 
acts  of  others  done  by  his  express  or  implied  command ;  but  to  crimes 
the  maxim  omnis  ratihabitio  retrotrahitur  et  mandato  equiparatur, 
is  inapplicable." 


COMMONWEALTH   v.   KELLEY. 

140  Mass.  441.     1886. 

Indictment  and  conviction  for  violation  of  the  statute  which 
prohibited  licensed  liquor-sellers  from  maintaining  a  screen  or  cur- 
tain to  cut  off  a  public  view  of  the  premises.  Defendant  had  in- 
structed his  clerk  not  to  draw  the  curtains,  but  the  clerk  did  so  in 
violation  of  his  instructions.    The  court  ruled  this  was  no  defence. 

W.  Allen,  J.  We  think  that  the  ruling  and  instructions  were 
correct.  The  provision  of  the  statute  relates  to  the  use  and  manage- 
ment of  licensed  premises,  and  its  express  intent  is  to  secure  an 
unobstructed  view  of  their  interior  at  all  times  by  persons  outside. 
It  is  addressed  to  the  licensee  only;  no  other  person  can  violate  it. 
It  forbids  him  to  do,  or  to  permit  to  be  done,  the  prohibited  act,  and, 
by  fair  intendment,  includes  acts  done  in  the  use  of  the  premises  in 
carrying  on  the  business  licensed,  whether  they  are  done  by  the 
licensee  in  person,  or  by  his  agent  left  by  him  in  charge  and  manage- 
ment of  the  business.  Commonwealth  v.  Emmons,  98  Mass.  6 ;  Com- 
monwealth V.  Uhrig,  138  Mass.  492;  Rex  v.  Medley,  6  Car.  &  P.  292; 
Rex  V.  Dixon,  3  M.  &  S.  11.  Exceptions  overruled. 

Commonwealth  v.  Wachendorf,  141  Mass.  270  (1886).  Indict- 
ment and  conviction  for  selling  liquor  during  prohibited  hours. 
The  court  ruled  that  it  was  no  defence  that  defendant  had  instructed 
his  barkeeper  not  to  sell  during  those  hours,  and  that  the  barkeeper 


CHAP.   XXIII.]         LIABILITY   OP   MASTEB   FOR   CRIMES.  697 

had  disobeyed  instnictions.  Morton,  C.  J.  (after  distinguishing 
Commonwealth  v.  Kelley,  supra).  "  Section  1,  upon  which  the  com- 
plaint in  the  case  at  bar  is  based,  subjects  to  punishment  any  person 
who  sells  liquor  unlawfully.  It  is  to  be  presumed  that  the  Legis- 
lature intended  to  use  the  language  in  its  natural  sense,  and  with 
the  meaning  given  to  equivalent  language  by  the  court  in  Common- 
wealth V.  Nichols,  10  Met.  259.  It  is  not  a  necessary  or  reasonable 
construction  to  hold  that  it  subjects  to  punishment  a  person  who 
does  not  sell,  because  a  servant  in  his  employment,  in  opposition 
to  his  will  and  against  his  orders,  makes  an  unlawful  sale.  We  are 
therefore  of  opinion  that  the  instruction  requested  by  the  defendant 
should  have  been  given.  Of  course,  it  would  be  for  the  jury,  under 
the  instruction,  to  determine  whether  the  defendant  did,  in  good 
faith,  give  instructions,  intended  to  be  obeyed  and  enforced,  that  no 
sale  should  be  made  after  eleven  o'clock.  If  he  did,  and  a  sale  waa 
made  in  violation  of  them,  without  his  knowledge,  he  cannot  be  held 
guilty  of  the  offence  charged  in  the  complaint." 

State  v.  McCance,  110  Mo.  398  (1892),  holds  that  proof  of  sale 
by  agent  makes  a  prima  facie  case  against  the  principal,  but  that 
the  latter  may  rebut  the  presumption  by  proof  that  the  sale  was 
forbidden  by  him.  "  As  a  general  rule  of  law,  the  principal  cannot 
be  held  criminally  liable  for  the  acts  of  his  agent  committed  with- 
out his  knowledge  or  consent.  But  there  are  statutes,  which  are  in 
the  nature  of  police  regulations,  which  impose  criminal  penalties, 
irrespective  of  any  intent  to  violate  them.  A  number  of  these  are 
collated  by  Chief-Justice  Cooley  in  People  v.  Eoby,  52  Mich.  577." 


CAEROLL  V.    STATE. 

63  Md.  551.     1885. 

Appeal  from  the  Circuit  Court  of  Allegany  County. 

The  appellant  was  indicted,  tried,  and  convicted  for  selling 
whiskey  to  a  minor,  in  violation  of  §  93  of  Article  12  of  the  Revised 
Code. 

Irving,  J.,  delivered  the  opinion  of  the  Court. 

The  appellant,  who  was  a  licensed  dealer  in  spirituous  liquors, 
was  indicted  for  unlawfully  selling  liquor  to  one  William  Miller^  a 
minor  under  the  age  of  twenty-one  years.  At  the  trial  two  exceptions 
were  taken,  which  are  intended  to  present  the  same  question,  and  the 
only  question,  in  fact,  which  is  involved.  The  sale  was  made  by 
appellant's  bartender,  out  of  the  presence  of  the  appellant,  and 
without  his  knowledge  of  this  particular  sale.     This  was  proved  by 


698  CAKROLL   V.   STATE.  [CHAP.   XXIII. 

the  purchaser  who  also  proved  he  was  a  minor.  In  addition  to  these 
facts,  the  appellant  offered  to  prove  by  the  bartender,  that  the 
appellant  had  given  him  instructions  not  to  sell  to  minors,  and  these 
instructions  were  understood  by  the  bartender  to  be  bona  fide,  and 
that  he  would  not  intentionally  have  violated  them.  He  also  offered 
to  testify  himself,  that  he  had  given  these  instructions  to  his  bar- 
keeper in  good  faith,  and  intended  them  to  be  obeyed,  and  that  he 
had  no  idea  of  their  violation  in  this  or  any  other  case.  Both  offers, 
on  objection  of  the  state,  were  refused,  and  the  traverser  excepted. 
A  principal  is  prima  facie  liable  for  the  acts  of  his  agent  done  in  the 
general  course  of  business  authorized  by  him,  1  WTiarton's  Crim. 
Law,  §  247;  and  a  vender  of  spirituous  liquors  is  indictable  for  the 
unlawful  sale  by  his  agent  employed  in  his  business,  because  all 
concerned  are  principals.  2  Wharton's  Cr.  Law,  1503.  This  is  con- 
ceded by  appellant's  counsel,  and  it  is  also  conceded,  that  in  the 
absence  of  evidence  to  the  contrary,  the  authority  to  do  the  thing 
complained  of  may  be  inferred  from  the  relations  of  the  parties. 
If  there  be  no  authority,  express  or  implied,  of  course  the  party 
indicted  ought  to  be  acquitted.  The  question  here  is,  whether,  when 
the  agency  for  the  transaction  of  the  business  of  selling  liquors 
generally,  is  established  and  admitted,  and,  in  the  conduct  of  that 
business,  a  prohibited  sale  is  made  by  an  agent  to  a  minor,  the  prin- 
cipal may  shield  himself  from  liability,  on  the  ground  that  his  agent 
violated  his  general  instructions,  and  did  not  inquire,  or  was  deceived 
by  the  purchaser  as  to  his  age.  The  question  is  whether,  while  de- 
riving the  profit  from  the  sale,  the  principal  can  delegate  his  duty 
to  know  that  a  purchaser  is  a  lawful  one  to  the  determination  of  an 
agent,  and  be  excused  by  the  agent's  negligence  or  error. 

The  law  for  the  violation  of  which  this  appellant  has  been  in- 
dicted is  a  police  regulation  of  a  very  stringent  character.  It  is  in 
these  words :  "  If  any  person  shall  sell  any  spirituous,  or  fermented 
liquors,  or  lager  beer,  to  any  person  who  is  a  minor,  under  twenty- 
one  years  of  age,  he  shall,  on  conviction,  pay  a  fine  of  not  less  than 
fifty  dollars  nor  more  than  two  hundred  dollars,  together  with  the 
costs  of  prosecution,  and  upon  failure  to  pay  the  same  shall  be  com- 
mitted to  gaol  and  confined  therein  until  such  fine  and  costs  are  paid, 
or  for  the  period  of  forty  days,  whichever  shall  first  occur ;  and  it  shall 
be  the  duty  of  the  Court  before  whom  said  person  shall  be  convicted 
to  suppress  his  license."  For  the  violation  of  a  statute  of  this  nature 
it  is  not  necessary  to  allege  the  scienter  in  the  indictment,  because  it 
is  not  made  an  ingredient,  by  the  statute,  that  the  thing  shall  be 
hnowingly  and  wilfully  done,  to  make  the  violation  of  the  statute 
an  offence.  As  ignorance  of  the  existence  of  such  law  will  not  excuse, 
so  also  ignorance  of  a  fact  necessary  to  be  known  to  avoid  a  violation 
of  the  law  will  not  excuse.  3  Greenleaf  on  Evidence,  §§20  and  21. 
Where  an  act,  if  done  knowingly,  would  be  malum  in  se,  ignorance. 


CHAP.    XXIII.]         LIABILITY    OF    MASTER    FOB    CRIMES.  699 

which  excludes  the  idea  of  intentional  wrong,  it  would  seem  will 
excuse;  but  Mr.  Greenleaf  says,  in  §  21  of  vol.  3  of  his  work  on 
Evidence,  "  where  a  statute  commands  that  an  act  be  done  or  omitted, 
which,  in  the  absence  of  such  statute,  might  have  been  done  or 
omitted  without  culpability,  ignorance  of  the  fact  or  state  of  things 
contemplated  by  the  statute,  it  seems,  will  not  excuse  its  violation." 
He  adds :  "  Such  is  the  case  in  regard  to  fiscal  and  police  regulations, 
for  the  violation  of  which,  irrespective  of  the  knowledge  or  motives 
of  the  party,  certain  penalties  are  enacted;  for  the  law,  in  those 
cases,  seems  to  bind  the  party  to  know  the  facts  and  to  obey  the 
law  at  his  peril."  In  the  note  to  this  section  instances  are  given 
where  such  rule  applies;  and  it  is  said  to  apply  to  the  sale  of  any 
article  the  sale  of  which  is  prohibited,  and,  it  has  been  held  to  be 
no  excuse,  that  the  vender  did  not  know  it  was  the  prohibited  article. 
3  Greenleaf,  §  21,  note.  The  sale  of  spirituous  liquors,  where  pro- 
hibited, is  specially  mentioned  as  within  this  rule;  as  also  the  allow- 
ance of  minors  to  play  billiards  where  that  is  prohibited.  This 
doctrine  is  maintained  in  Commonwealth  v.  Emmons,  98  Mass.  6; 
McCutcheon  v.  The  People,  69  111.  606;  Barnes  v.  The  State,  19 
Conn.  398 ;  State  v.  Hartfiel,  24  Wis.  60 ;  Ulrich  v.  Commonwealth, 
6  Bush  (Ky.),  400;  and  in  very  many  other  cases  in  Massachusetts 
and  other  states.  It  is  upon  the  ground,  that  intention  is  not  an 
essential  ingredient  of  the  offence,  that  the  principal  is  held  bound 
for  the  act  of  his  agent  in  violation  of  law  whilst  pursuing  his 
ordinary  business  as  such  agent.  Being  engaged  in  business  where  it 
is  lawful  to  sell  to  all  persons  except  such  as  are  by  law  excepted, 
it  is  his  duty  to  know  when  a  sale  is  made,  that  it  is  to  a  properly 
situated  person.  Therefore  it  is  his  duty  to  trust  nobody  to  do  his 
work  but  some  one  whom  he  can  safely  trust  to  discharge  his  whole 
duty,  and  if  he  does  not  do  so,  the  law  holds  him  answerable. 

The  leading  case  of  Rex  v.  Gutch,  Moody  &  Malk.  433,  cited  in 
1  Taylor's  Ev.,  827,  states  the  law  as  it  is  now  generally  received. 
The  prosecution  was  for  a  libel.  Lord  Tenterden  says :  "  A  person 
who  derives  profit  from,  and  who  furnishes  the  means  for  carrying 
on  the  concern,  and  entrusts  the  business  to  one  in  whom  he  confides, 
may  be  said  to  have  published  himself,  and  ought  to  be  answerable." 

In  The  Queen  v.  Bishop,  L.  R.,  5  Queen's  Bench  Div.  (Crown 
Cases  Reserved)  259,  the  defendant  was  convicted  of  receiving  into 
her  house  two  or  more  lunatics,  not  being  a  registered  asylum  or 
house  duly  licensed  by  law.  The  jury  found  specially  that  the  de- 
fendant honestly  and  on  reasonable  grounds  believed,  that  the  persons 
received  into  her  house  were  not  lunatic ;  though  the  jury  found  they 
were  lunatic.  The  point  being  reserved  was  heard  before  Coleridge, 
Denman,  Stephen,  Pollock,  and  Field,  all  of  whom  affirmed  the 
conviction,  holding  that  such  belief  was  immaterial.  The  court  held 
that  to  hold  otherwise  would  frustrate  the  object  of  the  statute. 


700  CARROLL   V.    STATE.  [CHAP.   XXIII. 

In  Redgate  v.  Haynes,  L.  R,,  1  Q.  B.  Div.  89,  the  appellant  was 
charged  with  suffering  gaming  to  be  carried  on  upon  her  premises. 
She  had  retired  for  the  night,  leaving  the  house  in  charge  of  the 
hall  porter,  who  withdrew  his  chair  to  a  part  of  the  hotel  remote 
from  the  guests,  and  did  not  see  the  gaming.  It  was  held  that  the 
landlady  was  answerable.  The  same  principle  was  maintained  in 
Mullins  V.  Collins,  L.  R.,  9  Q.  B.  293,  where  a  servant  of  a  licensed 
victualler  supplied  liquor  to  a  constable  on  duty  without  authority 
from  his  superior  oflBcer.  The  Court  held  that  the  licensed  victualler 
was  answerable,  though  he  had  no  knowledge  of  the  act  of  his  ser- 
vant. So  also  in  a  more  recent  case,  in  the  Queen's  Bench,  Cundy 
V.  Le  Cocq  (23  American  Law  Reg.  768),  where  a  person  was  con- 
victed under  the  Licensing  Act  of  1872,  of  having  sold  liquors  to  a 
drunken  person,  the  question  was  reserved  whether  as  it  was  proved 
that  neither  the  defendant  nor  his  servants  knew  the  man  was  drunk, 
and  there  were  no  indications  of  his  being  intoxicated,  and  they  had 
no  means  of  knowing,  he  could  be  convicted.  The  Court,  through 
Judge  Stephen,  affirmed  the  conviction,  holding  that  it  was  no 
defence  against  conviction,  and  was  only  a  ground  for  mitigation 
in  punishment. 

In  McCutcheon  v.  The  People,  69  111.  607,  the  indictment  was 
for  the  same  offence  as  that  charged  in  this  case,  and  the  Court 
lay  down  the  law  as  we  think  it  is,  and  ought  to  be,  as  the  logical 
result  of  the  immateriality  in  such  case  of  criminal  intent,  as  all 
the  cases  we  have  cited  establish.  The  Court  says  "  this  construction 
imposes  no  hardship  on  the  licensed  seller.  If  he  does  not  know  the 
party,  who  seeks  to  buy  intoxicating  liquors  at  his  counter,  is  legally 
competent  to  do  so,  he  must  refuse  to  make  the  sale.  If  he  violates 
either  clause  of  the  statute,  he  must  suffer  the  penalty  of  its  violation. 
It  is  no  answer  to  this  view  to  say  the  licensee  may  sometimes  be 
imposed  upon,  and  made  to  suffer  when  he  had  no  intention  to 
violate  its  provisions.  This  is  a  risk  incident  to  the  business  which 
he  undertakes  to  conduct,  and  as  he  receives  the  gains  connected 
therewith  he  must  also  assume  all  the  hazards."  The  Court  adds  that 
it  is  immaterial  whether  the  sale  was  made  by  the  appellant,  or  an 
agent,  and  that,  if  made  by  an  agent,  the  presumption  is  conclusive 
that  he  acted  within  the  scope  of  his  authority.  When  the  agent, 
as  in  this  case,  is  set  to  do  the  very  thing  which,  and  which  only, 
the  principal's  business  contemplates,  namely,  the  dispensing  of 
liquors  to  purchasers,  the  principal  must  be  chargeable  with  the 
agent's  violation  of  legal  restrictions  on  that  business.  His  gains 
are  increased,  and  he  must  bear  the  consequences.  The  fact  that  he 
has  given  orders  not  to  sell  to  minors  only  shows  a  bona  fide  intent 
to  obey  the  law,  which  all  the  authorities  say  is  immaterial,  in  deter- 
mining guilt.  The  Court  may  regard  such  fact,  in  graduating 
punishment,  when  it  has  a  discretion. 


CHAP.    XXIII.]         LIABILITY    OF    MASTER    FOR    CRIMES.  701 

The  cases,  therefore,  which  hold  that  such  orders  will  exculpate 
the  principal,  are  inconsistent  with  the  rule,  that,  in  such  case  intent 
is  immaterial.  If  intent  is  not  an  ingredient  in  the  offence,  it  logi- 
cally follows,  that  it  must  be  immaterial  whether  such  orders  are 
given  or  not,  for  he  who  does  by  another  that  which  he  cannot  law- 
fully do  in  person,  must  be  responsible  for  the  agent's  act.  In  fact 
it  is  his  act.  If  the  principal  makes  such  sale  at  his  peril,  and  is  not 
excusable,  because  he  did  not  know  or  was  deceived,  for  the  reason 
that  he  was  bound  to  know,  and  if  he  was  not  certain  should  decline 
to  sell,  or  take  the  hazard,  it  cannot  be  that  by  setting  another  to 
do  his  work,  and  occupying  himself  elsewhere  and  otherwise,  he  can 
reap  the  benefit  of  his  agent's  sales,  and  escape  the  consequences 
of  the  agent's  conduct.  It  would  be  impossible  to  effectually  enforce 
a  statute  of  this  kind,  if  that  were  allowed ;  and  no  license  would  ever 
be  suppressed.  The  law  would  soon  become  "  a  dead  letter."  That 
this  has  been  the  accepted  law  in  this  state,  in  the  opinion  of  the 
Legislature,  is  clearly  shown  by  the  special  Act  of  1876,  chapter  273, 
for  the  City  of  Annapolis,  whereby  it  is  expressly  provided  that  the 
seller  of  liquor  to  minors  shall  not  be  punishable  if  he  has  been 
honestly  deceived  as  to  the  age  of  the  party  applying  to  buy,  through 
the  misrepresentations  of  the  buyer;  and  the  person  making  the  pur- 
chase through  misrepresentation  is  punishable  instead  of  the  seller; 
and  further  "  that  the  act  of  any  agent  under  this  section  shall  not 
be  binding  on  his  principal,  if  the  court  or  jury  shall  believe  that 
said  act  was  committed  against  the  bona  fide  instructions  of  said 
principal." 

It  follows  from  what  we  have  said  that  we  think  there  was  no 
error  in  the  rulings  of  the  Circuit  Court. 

Rulings  affirmed,  and  cause  remanded. 

Judges  Robinson  and  Yellott  dissented. 

NoECKER  V.  People,  91  111.  494  (1879).  Indictment  and  convic- 
tion for  selling  liquor  without  a  license.  Mr.  Justice  Sheldon.  .  .  . 
"  Some  of  the  sales  testified  to  were  made  by  clerks  of  the  defendant. 
The  court  rejected  testimony  offered  by  the  defendant,  as  to  what 
instructions  he  gave  his  clerks  in  relation  to  the  sale  of  intoxicating 
liquors.  This  is  assigned  for  error.  We  think  the  testimony  was 
properly  excluded.  The  language  of  the  statute  is,  whoever,  by  him- 
self, clerk,  or  servant,  shall  sell,  etc.,  shall  be  liable.  The  testimony 
was  uncontradicted  that  the  defendant  kept  intoxicating  liquors  for 
sale,  and  the  defendant  would  be  responsible  for  the  acts  of  selling 
by  his  clerks,  no  matter  what  might  have  been  his  instructions  to 
them.  .  .  ." 


.702  COMMONWEALTH   V.    MORGAN.  [CHAP.   XXIII. 

COMMONWEALTH   v.    MORGAN". 
107  Mass.  199.     1871. 

Indictment  for  the  publication  of  an  alleged  libel  in  a  newspaper 
published  by  defendant.  Jury  returned  a  verdict  of  guilty.  De- 
fendant alleged  exceptions. 

Colt,  J.  ...  4.  The  defendant  then  offered  to  prove  that  he 
had  never  seen  the  alleged  libel,  and  was  not  aware  of  its  publi- 
cation till  it  was  pointed  out  to  him  by  a  third  party;  and  that  an 
apology  and  retraction  was  subsequently  published  by  the  same 
newspaper. 

When  a  libel  is  sold  in  a  bookseller's  shop,  by  a  servant  of  the 
bookseller,  in  the  ordinary  course  of  his  employment;  or  is  pub- 
lished in  a  newspaper;  the  fact  alone  is  suJQficient  evidence  to  charge 
the  bookseller,  or  the  proprietor  of  the  newspaper,  with  the  guilt  of 
its  publication.  This  evidence,  by  the  earlier  English  decisions,  was 
held  not  to  be  conclusive,  but  the  defendant  was  permitted  to  show, 
in  exculpation,  that  he  was  not  privy,  nor  assenting  to,  nor  encour- 
aging, the  publication.  See  1  Lead.  Crim.  Cas.  145 ;  notes  to  Rex 
V.  Almon,  5  Burr.  2686.  Afterwards,  such  evidence  was  held  con- 
clusive, upon  the  ground  that  it  was  necessary  to  prevent  the  escape 
of  the  real  offender  behind  an  irresponsible  party.  Rex  v.  Gutch, 
Mood.  &  Malk.  433 ;  Rex  v.  Walter,  3  Esp.  21.  In  both  these  cases, 
the  defendants  offered  to  show  that  they  were  perfectly  innocent  of 
any  share  in  the  criminal  publication,  and  that,  although  proprietors 
of  the  papers,  they  were  living  at  a  distance  from  London,  the  place 
of  publication,  taking  no  share  in  the  actual  publication,  and  in  one 
ease  confined  by  illness  when  the  paper  complained  of  appeared.  It 
was  ruled  by  Lord  Kexyon  and  Lord  Tenterden  to  be  no  defence. 
But  now,  by  a  recent  English  statute,  a  defendant  is  permitted  to 
prove  that  such  publication  was  made  without  his  authority,  consent, 
or  Imowledge,  and  did  not  arise  from  want  of  due  care  or  caution 
on  his  part.    St.  6  and  7  Vict.  c.  96. 

The  rule  thus  made  positive  law  is  in  strict  accordance  with  those 
just  principles  which  ought  to  limit  criminal  liability  for  the  acts  of 
another,  and  which  have  been  recognized  in  the  decisions  of  this 
court.  Criminal  responsibility  on  the  part  of  the  principal,  for  tlie 
act  of  his  agent  or  servant  in  the  course  of  his  employment,  implies 
some  degree  of  moral  guilt  or  delinquency,  manifested  either  by 
direct  participation  in  or  assent  to  the  act,  or  by  want  of  proper 
care  and  oversight,  or  other  negligence  in  reference  to  the  business 
which  he  has  thus  intrusted  to  another.  The  rule  of  civil  liability 
is  broader,  and  the  principal  must  respond  in  damages  for  the  de- 
fault or  tortious  act  of  the  agent  or  servant  in  his  employment. 


CHAP.    XXIII.]         LIABILITY   OP    MASTER    FOB    CRIMES.  703 

although  he  had  no  knowledge  of  it,  or  had  actually  forbidden  it 
in  advance  and  had  exercised  due  care  to  prevent  it. 

In  Commonwealth  v.  Nichols,  10  Met.  259,  it  was  held  that  a 
shopkeeper  is  criminally  liable  for  an  unlawful  sale  of  spirituous 
liquor  in  his  shop,  made  with  his  assent  by  a  servant  or  agent  em- 
ployed in  his  business.  But  such  sale  is  only  prima  facie  evidence  of 
assent.  And  it  was  said  that  "  if  a  sale  of  liquor  is  made  by  the 
servant  without  the  knowledge  of  the  master,  and  really  in  opposition 
to  his  will,  and  in  no  way  participated  in,  approved,  or  countenanced 
by  him,  and  this  is  clearly  shown  by  the  master,  he  ought  to  be 
acquitted."  It  is  to  be  remarked  with  reference  to  this  case,  that 
the  question  whether  the  sale  was  really  against  the  defendant's  will 
is  for  the  jury  upon  all  the  evidence,  and  that  the  facts  that  the 
profits  of  the  business  were  received  by  the  defendant,  and  that  there 
was  an  absence  of  proper  precautions  to  prevent  the  illegal  traffic, 
would  justify  an  inference  of  his  approval. 

In  The  King  v.  Dixon,  3  M.  &  S.  11,  the  defendant  was  convicted 
of  selling  unwholesome  bread,  upon  proof  that  his  foreman  had  by 
mistake  put  too  much  alum  in  it.  There  was  no  evidence  that  the 
master  knew  of  the  quantity  used  in  this  instance.  But  Bayley,  J., 
said :  "  If  a  person  employed  a  servant  to  use  alum,  or  any  other 
ingredient,  the  unrestricted  use  of  which  was  noxious,  and  did  not 
restrain  him  in  the  use  of  it,  such  person  would  be  answerable  if  the 
servant  used  it  to  excess,  because  he  did  not  apply  the  proper  pre- 
caution against  its  misuse." 

It  is  the  duty  of  the  proprietor  of  a  public  paper,  which  may  be 
used  for  the  publication  of  improper  communications,  to  use  reason- 
able caution  in  the  conduct  of  his  business,  that  no  libels  be  published. 
He  is  civilly  responsible  for  the  wrong,  to  the  extent  indicated;  and 
he  is  criminally  liable,  unless  the  unlawful  publication  was  made 
under  such  circumstances  as  to  negative  any  presumption  of  privity, 
or  connivance,  or  want  of  ordinary  precaution  on  his  part  to  prevent 
it.     3  Greenl.  Ev.  §§  170,  178. 

We  are  of  opinion  that  the  offer  of  the  defendant  did  not  go  far 
enough,  in  view  of  the  law  thus  stated,  to  rebut  the  presumption  of 
guilt  arising  from  the  publication  of  this  libel.  The  facts  offered 
may  be  true,  and  yet  entirely  consistent  with  the  fact  that  the  con- 
duct of  the  newspaper  was  under  his  actual  direction  and  charge, 
at  a  time  when  he  was  neither  absent  from  home  nor  confined  by 
sickness,  and  when  his  want  of  knowledge  would  necessarily  imply 
criminal  neglect  to  exercise  proper  care  and  supervision  over  the 
subordinates  in  his  employ.  It  is  consistent  also  with  such  infor- 
mation in  this  instance,  in  regard  to  the  proposed  libellous  attack, 
as  should  have  put  him  on  inquiry;  and  with  the  fact  that  the 
general  management  of  the  paper  was  of  such  a  character  as  to  justify 
the  inference  that  the  defendant  approved  of  or  connived  at  publi- 


704  COMMONWEALTH   V.   MOttGAN.  [CHAP.   XXIH. 

cations  of  this  description,  and  had  given  his  general  assent  to  them. 
Under  such  circumstances,  the  defendant  ought  not  to  be  permitted 
to  escape  on  the  plea  that  he  had  not  seen  the  particular  article  and 
did  not  know  of  its  publication. 

As  to  the  evidence  offered  of  a  subsequent  apology  and  retraction, 
the  answer  is  that  it  is  only  a  matter  in  mitigation  of  sentence.  The 
crime  is  not  purged  by  it.  .  .  .  Exceptions  ovemded. 


CHAP.   XXIV.]  THE  FELLOW  SERVANT   RULE.  705 


PART  III. 
LIABILITY  OF  MASTER   FOR  INJURIES  TO   SERVANT. 

CHAPTER    XXIV. 

Liability  of  Master  to  One  Servant  for  Torts  op 
Another  Servant. 

1.    The  Fellow  Servant  Bide.  ^ 

FARWELL   V.   THE   BOSTON   AND   WORCESTER 
RAILROAD    CORPORATION. 

4  Mete.    (Mass.)   49.     1842. 

Action  by  an  engineer  against  the  railroad  company  employing 
him  for  injuries  received  by  him,  while  miming  his  locomotive,  in 
consequence  of  the  negligence  of  a  switchman  of  the  company  in  the 
management  of  the  switches. 

Shaw,  C.  J.  This  is  an  action  of  new  impression  in  our  courts, 
and  involves  a  principle  of  great  importance.  It  presents  a  case, 
where  two  persons  are  in  the  service  and  employment  of  one  company, 
whose  business  it  is  to  construct  and  maintain  a  railroad,  and  to 
employ  their  trains  of  cars  to  carry  persons  and  merchandise  for 
hire.  They  are  appointed  and  employed  by  the  same  company  to 
perform  separate  duties  and  services,  all  tending  to  the  accomplish- 
ment of  one  and  the  same  purpose  —  that  of  the  safe  and  rapid  trans- 
mission of  the  trains ;  and  they  are  paid  for  their  respective  services 
according  to  the  nature  of  their  respective  duties,  and  the  labor  and 
skill  required  for  their  proper  performance.  The  question  is,  whether, 
for  damages  sustained  by  one  of  the  persons  so  employed,  by  means  of 
the  carelessness  and  negligence  of  another,  the  party  injured  has 
a  remedy  against  the  common  employer.  It  is  an  argument  against 
such  an  action,  though  certainly  not  a  decisive  one,  that  no  such 
action  has  before  been  maintained. 

It  is  laid  down  by  Blackstone,  that  if  a  servant,  by  his  negli- 
gence, does  any  damage  to  a  stranger,  the  master  shall  be  answerable 
for  his  neglect.  But  the  damage  must  be  done  while  he  is  actually 
employed  in  the  master's  service;  otherwise,  the  servant  shall  answer 
for  his  own  misbehavior.     1  Bl.  Com.  431;  M'Manus  v.  Crickett^ 

46 


706  FARWELL   V.   THE   B.    &    W.    R.    R.    CORP.       [CHAP.    XXIV. 

1  East,  106.  This  rule  is  obviously  founded  on  the  great  principle 
of  social  duty,  that  every  man,  in  the  management  of  his  own  affairs, 
whether  by  himself  or  by  his  agents  or  servants,  shall  so  conduct 
them  as  not  to  injure  another;  and  if  he  does  not,  and  another  shall 
thereby  sustain  damage,  he  shall  answer  for  it.  If  done  by  a  servant, 
in  the  course  of  his  employment,  and  acting  within  the  scope  of  his 
authority,  it  is  considered,  in  contemplation  of  law,  so  far  the  act 
of  the  master,  that  the  latter  shall  be  answerable  civiliter.  But  this 
presupposes  that  the  parties  stand  to  each  other  in  the  relation  of 
strangers,  between  whom  there  is  no  privity;  and  the  action,  in 
such  case,  is  an  action  sounding  in  tort.  The  form  is  trespass  on 
the  case,  for  the  consequential  damage.  The  maxim  respondeat 
superior  is  adopted  in  that  case  from  general  considerations  of  policy 
and  security. 

But  this  does  not  apply  to  the  case  of  a  servant  bringing  his 
action  against  his  own  employer  to  recover  damages  for  an  injury 
arising  in  the  course  of  that  employment,  where  all  such  risks  and 
perils  as  the  employer  and  the  servant  respectively  intend  to  assume 
and  bear  may  be  regulated  by  the  express  or  implied  contract  between 
them,  and  which,  in  contemplation  of  law,  must  be  presumed  to  be 
thus  regulated. 

The  same  view  seems  to  have  been  taken  by  the  learned  counsel 
for  the  plaintiff  in  the  argument;  and  it  was  conceded,  that  the 
claim  could  not  be  placed  on  the  principle  indicated  by  the  maxim 
respondeat  superior,  which  binds  the  master  to  indemnify  a  stranger 
for  the  damage  caused  by  the  careless,  negligent  or  unskilful  act 
of  his  servant  in  the  conduct  of  his  affairs.  The  claim,  therefore, 
is  placed,  and  must  be  maintained,  if  maintained  at  all,  on  the 
ground  of  contract.  As  there  is  no  express  contract  between  the 
parties,  applicable  to  this  point,  it  is  placed  on  the  footing  of  an 
implied  contract  of  indemnity,  arising  out  of  the  relation  of  master 
and  servant.  It  would  be  an  implied  promise,  arising  from  the 
duty  of  the  master  to  be  responsible  to  each  person  employed  by  him, 
in  the  conduct  of  every  branch  of  business,  where  two  or  more  per- 
sons are  employed,  to  pay.  for  all  damage  occasioned  by  the  negli- 
gence of  every  other  person  employed  in  the  same  service.  If  such 
a  duty  were  established  by  law  —  like  that  of  a  common  carrier, 
to  stand  to  all  losses  of  goods  not  caused  by  the  act  of  God  or  of 
a  public  enemy  —  or  that  of  an  innkeeper,  to  be  responsible,  in  like 
'  manner,  for  the  baggage  of  his  guests ;  it  would  be  a  rule  of  frequent 
and  familiar  occurrence,  and  its  existence  and  application,  with  all 
its  qualifications  and  restrictions,  would  be  settled  by  judicial  pre- 
cedents. But  we  are  of  opinion  that  no  such  rule  has  been  estab- 
lished, and  the  authorities,  as  far  as  they  go,  are  opposed  to  the 
principle.  Priestley  v.  Fowler,  3  Mees.  &  Welsh.  1 ;  Murray  v.  South 
Carolina  Eailroad  Company,  1  McMullan,  385. 


CHAP.   XXIV.]  THE  FELLOW   SERVANT  EULE.  707 

The  general  rule,  resulting  from  considerations  as  weU  of  justice 
as  of  policy,  is,  that  he  who  engages  in  the  employment  of  another 
for  the  performance  of  specified  duties  and  services,  for  compensa- 
tion, takes  upon  himself  the  natural  and  ordinary  risks  and  perils 
incident  to  the  performance  of  such  services,  and  in  legal  pre- 
sumption the  compensation  is  adjusted  accordingly.  And  we  are  not 
aware  of  any  principle  which  should  except  the  perils  arising  from 
the  carelessness  and  negligence  of  those  who  are  in  the  same  employ- 
ment. These  are  perils  which  the  servant  is  as  likely  to  know,  and 
against  which  he  can  as  effectually  guard,  as  the  master.  They  are 
perils  incident  to  the  service,  and  which  can  be  as  distinctly  foreseen 
and  provided  for  in  the  rate  of  compensation  as  any  others.  To 
say  that  the  master  shall  be  responsible  because  the  damage  is  caused 
by  his  agents,  is  assuming  the  very  point  which  remains  to  be  proved. 
They  are  his  agents  to  some  extent,  and  for  some  purposes;  but 
whether  he  is  responsible,  in  a  particular  case,  for  their  negligence, 
is  not  decided  by  the  single  fact  that  they  are,  for  some  purposes, 
his  agents.  It  seems  to  be  now  well  settled,  whatever  might  have 
been  thought  formerly,  that  underwriters  cannot  excuse  themselves 
from  payment  of  a  loss  by  one  of  the  perils  insured  against,  on  the 
ground  that  the  loss  was  caused  by  the  negligence  or  unskilfulness 
of  the  officers  or  crew  of  the  vessel,  in  the  performance  of  their 
various  duties  as  navigators,  although  employed  and  paid  by  the 
owners,  and,  in  the  navigation  of  the  vessel,  their  agents.  Copeland 
V.  New  England  Marine  Ins.  Co.,  2  Met.  440-443,  and  cases  there 
cited.  I  am  aware  that  the  maritime  law  has  its  own  rules  and 
analogies,  and  that  we  cannot  always  safely  rely  upon  them  in  apply- 
ing them  to  other  branches  of  law.  But  the  rule  in  question  seems 
to  be  good  authority  for  the  point,  that  persons  are  not  to  be  responsi- 
ble, in  all  cases,  for  the  negligence  of  those  employed  by  them. 

If  we  look  from  considerations  of  justice  to  those  of  policy,  they 
will  strongly  lead  to  the  same  conclusion.  In  considering  the  rights 
and  obligations  arising  out  of  particular  relations,  it  is  competent 
for  courts  of  justice  to  regard  considerations  of  policy  and  general 
convenience,  and  to  draw  from  them  such  rules  as  will,  in  their 
practical  application,  best  promote  the  safety  and  security  of  all 
parties  concerned.  This  is,  in  truth,  the  basis  on  which  implied 
promises  are  raised,  being  duties  legally  inferred  from  a  consideration 
of  what  is  best  adapted  to  promote  the  benefits  of  all  persons  con- 
cerned, under  given  circumstances.  To  take  the  well  known  and 
familiar  cases  already  cited;  a  common  carrier,  without  regard  to 
actual  fault  or  neglect  in  himself  or  his  servants,  is  made  liable  for 
all  losses  of  goods  confided  to  him  for  carriage,  except  those  caused 
by  the  act  of  God  or  of  a  public  enemy,  because  he  can  best  guard 
them  against  all  minor  dangers,  and  because,  in  case  of  actual  loss, 
it  would  be  extremely  difficult  for  the  owner  to  adduce  proof  of  em« 


708  FARWELL   V.   THE  B.    A   W.   R.    R.    CORP.       [cHAP.   XXIV. 

bezzlement,  or  other  actual  fault  or  neglect  on  the  part  of  the  carrier, 
although  it  may  have  been  the  real  cause  of  the  loss.  The  risk  is 
therefore  thrown  upon  the  carrier,  and  he  receives,  in  the  form  of  pay- 
ment for  the  carriage,  a  premium  for  the  risk  which  he  thus  assumes. 
So  of  an  innkeeper;  he  can  best  secure  the  attendance  of  honest 
and  faithful  servants,  and  guard  his  house  against  thieves.  Whereas, 
if  he  were  responsible  only  upon  proof  of  actual  negligence,  he  might 
connive  at  the  presence  of  dishonest  inmates  and  retainers,  and  even 
participate  in  the  embezzlement  of  the  property  of  the  guests,  during 
the  hours  of  their  necessary  sleep,  and  yet  it  would  be  difficult,  and 
often  impossible,  to  prove  these  facts. 

The  liability  of  passenger  carriers  is  founded  on  similar  con- 
siderations. They  are  held  to  the  strictest  responsibility  for  care, 
vigilance,  and  skill,  on  the  part  of  themselves  and  all  persons  em- 
ployed by  them,  and  they  are  paid  accordingly.  The  rule  is  founded 
on  the  expediency  of  throwing  the  risk  upon  those  who  can  best 
guard  against  it.    Story  on  Bailments,  §  590,  and  seq. 

We  are  of  opinion  that  these  considerations  apply  strongly  to  the 
case  in  question.  Where  several  persons  are  employed  in  the  conduct 
of  one  common  enterprise  or  undertaking,  and  the  safety  of  each 
depends  much  on  the  care  and  skill  with  which  each  other  shall 
perform  his  appropriate  duty,  each  is  an  observer  of  the  conduct  of 
the  others,  can  give  notice  of  any  misconduct,  incapacity,  or  neglect 
of  duty,  and  leave  the  service,  if  the  common  employer  will  not  take 
such  precautions,  and  employ  such  agents  as  the  safety  of  the  whole 
party  may  require.  By  these  means,  the  safety  of  each  will  be  much 
more  effectually  secured,  than  could  b3  done  by  a  resort  to  the 
common  employer  for  iudemnit}^  in  case  of  loss  by  the  negligence  of 
each  other.  Regarding  it  in  this  light,  it  is  the  ordinary  case  of 
one  sustaining  an  injury  in  the  course  of  his  own  employment,  in 
which  he  must  bear  the  loss  himself,  or  seek  his  remedy,  if  he  have 
any,  against  the  actual  wrongdoer.  See  Winterbottom  v.  Wright, 
10  Mees.  &  Welsh.  109 ;  Milligan  v.  Wedge,  12  Adolph.  &  Ellis,  737. 

In  applying  these  principles  to  the  present  case,  it  appears  that 
the  plaintiff  was  employed  by  the  defendants  as  an  engineer,  at  the 
rate  of  wages  usually  paid  in  that  employment,  being  a  higher 
rate  than  the  plaintiff  had  before  received  as  a  machinist.  It  was 
a  voluntary  undertaking  on  his  part,  with  a  full  knowledge  of  the 
risks  incident  to  the  emplojTnent;  and  the  loss  was  sustained  by 
means  of  an  ordinary  casualty,  caused  by  the  negligence  of  another 
servant  of  the  company.  Under  these  circumstances,  the  loss  must 
be  deemed  to  be  the  result  of  a  pure  accident,  like  those  to  which  all 
men,  in  all  employments,  and  at  all  times,  are  more  or  less  exposed; 
and  like  similar  losses  from  accidental  causes,  it  must  rest  where 
it  first  fell,  unless  the  plaintiff  has  a  remedy  against  the  person  actu- 
ally in  default;  of  which  we  give  no  opinion. 


CHAP.    XXIV.]  THE   FELLOW   SERVANT  RULE.  709 

It  was  strongly  pressed  in  the  argument,  that  although  this  might 
be  so,  where  two  or  more  servants  are  employed  in  the  same  depart- 
ment of  duty,  where  each  can  exert  some  influence  over  the  conduct 
of  the  other,  and  thus  to  some  extent  provide  for  his  own  security; 
yet  that  it  could  not  apply  where  two  or  more  are  employed  in 
different  departments  of  duty,  at  a  distance  from  each  other,  and 
where  one  can  in  no  degree  control  or  influence  the  conduct  of  another. 
But  we  think  this  is  founded  upon  a  supposed  distinction,  on  which 
it  would  be  extremely  diflficult  to  establish  a  practical  rule.  When 
the  object  to  be  accomplished  is  one  and  the  same,  when  the  em- 
ployers are  the  same,  and  the  several  persons  employed  derive  their 
authority  and  their  compensation  from  the  same  source,  it  would  be 
extremely  difficult  to  distinguish,  what  constitutes  one  department 
and  what  a  distinct  department  of  duty.  It  would  vary  with  the 
circumstances  of  every  case.  If  it  were  made  to  depend  upon  the 
nearness  or  distance  of  the  persons  from  each  other,  the  question 
would  immediately  arise,  how  near  or  how  distant  must  they  be,  to 
be  in  the  same  or  different  departments.  In  a  blacksmith's  shop, 
persons  working  in  the  same  building,  at  different  fires,  may  be  quite 
independent  of  each  other,  though  only  a  few  feet  distant.  In  a 
ropewalk,  several  may  be  at  work  on  the  same  piece  of  cordage,  at 
the  samie  time,  at  many  hundred  feet  distant  from  each  other,  and 
beyond  the  reach  of  sight  and  voice,  and  yet  acting  together. 

Besides,  it  appears  to  us,  that  the  argument  rests  upon  an  assumed 
principle  of  responsibility  which  does  not  exist.  The  master,  in  the 
case  supposed,  is  not  exempt  from  liability,  because  the  servant  has 
better  means  of  providing  for  his  safety,  when  he  is  employed  in 
immediate  connection  with  those  from  whose  negligence  he  might 
suffer;  but  because  the  implied  contract  of  the  master  does  not 
extend  to  indemnify  the  servant  against  the  negligence  of  any  one 
but  himself ;  and  he  is  not  liable  in  tort,  as  for  the  negligence  of  his 
servant,  because  the  person  suffering  does  not  stand  towards  him  in 
the  relation  of  a  stranger,  but  is  one  whose  rights  are  regulated  by 
contract  express  or  implied.  The  exemption  of  the  master,  there- 
fore, from  liability  for  the  negligence  of  a  fellow  servant,  does  not 
depend  exclusively  upon  the  consideration,  that  the  servant  has  better 
means  to  provide  for  his  own  safety,  but  upon  other  grounds.  Hence 
the  separation  of  the  employment  into  different  departments  cannot 
create  that  liability,  when  it  does  not  arise  from  express  or  implied 
contract,  or  from  a  responsibility  created  by  Jaw  to  third  persons, 
and  strangers,  for  the  negligence  of  a  servant. 

A  case  may  be  put  for  the  purpose  of  illustrating  this  distinction. 
Suppose  the  road  had  been  owned  by  one  set  of  proprietors  whose 
duty  it  was  to  keep  it  in  repair  and  have  it  at  all  times  ready  and 
in  fit  condition  for  the  running  of  engines  and  cars,  taking  a  toll, 
and  that  the  engines  and  cars  were  owned  by  another  set  of  pro- 


710  FARWELL  V.   THE   B.   &   W.   R.    R.    CORP.       [CHAP.   IXIY. 

prietors,  paying  toll  to  the  proprietors  of  the  road,  and  receiving 
compensation  from  passengers  for  their  carriage;  and  suppose  the 
engineer  to  suffer  a  loss  from  the  negligence  of  the  switch-tender. 
We  are  inclined  to  the  opinion  that  the  engineer  might  have  a  remedy 
against  the  railroad  corporation;  and  if  so,  it  must  be  on  the  ground, 
that  as  between  the  engineer  employed  by  the  proprietors  of  the 
engines  and  cars,  and  the  switch-tender  employed  by  the  corporation, 
the  engineer  would  be  a  stranger,  between  whom  and  the  corpora- 
tion there  could  be  no  privity  of  contract;  and  not  because  the 
engineer  would  have  no  means  of  controlling  the  conduct  of  the 
switch-tender.  The  responsibility  which  one  is  under  for  the  negli- 
gence of  his  servant,  in  the  conduct  of  his  business,  towards  third 
persons,  is  founded  on  another  and  distinct  principle  from  that  of 
implied  contract,  and  stands  on  its  own  reasons  of  policy.  The  same 
reasons  of  policy,  we  think,  limit  this  responsibility  to  the  case  of 
strangers,  for  whose  security  alone  it  is  established.  Like  considera- 
tions of  policy  and  general  expediency  forbid  the  extension  of  the 
principle,  so  far  as  to  warrant  a  servant  in  maintaining  an  action 
against  his  employer  for  an  indemnity  which  we  think  was  not  con- 
templated in  the  nature  and  terms  of  the  employment,  and  which, 
if  established,  would  not  conduce  to  the  general  good. 

In  coming  to  the  conclusion  that  the  plaintiff,  in  the  present  case, 
is  not  entitled  to  recover,  considering  it  as  in  some  measure  a  nice 
question,  we  would  add  a  caution  against  any  hasty  conclusion  as 
to  the  application  of  this  rule  to  a  case  not  fully  within  the  same 
principle.  It  may  be  varied  and  modified  by  circumstances  not 
appearing  in  the  present  case,  in  which  it  appears,  that  no  wilful 
wrong  or  actual  negligence  was  imputed  to  the  corporation,  and 
where  suitable  means  were  furnished  and  suitable  persons  employed 
to  accomplish  the  object  in  view.  We  are  far  from  intending  to  say 
that  there  are  no  implied  warranties  and  undertakings  arising  out 
of  the  relation  of  master  and  servant.  Whether,  for  instance,  the 
employer  would  be  responsible  to  an  engineer  from  a  loss  arising  from 
a  defective  or  ill-constructed  steam  engine;  whether  this  would 
depend  upon  an  implied  warranty  of  its  goodness  and  sufficiency,  or 
upon  the  fact  of  wilful  misconduct,  or  gross  negligence  on  the  part 
of  the  employer,  if  a  natural  person,  or  of  the  superintendent  or 
immediate  representative  and  managing  agent,  in  case  of  an  incor- 
porated company  —  are  questions  on  which  we  give  no  opinion.  In 
the  present  case,  the  claim  of  the  plaintiff  is  not  put  on  the  ground 
that  the  defendants  did  not  furnish  a  sufficient  engine,  a  proper  rail- 
road track,  a  well-constructed  switch,  and  a  person  of  suitable  skill 
and  experience  to  attend  it;  the  gravamen  of  the  complaint  is,  that 
the  person  was  chargeable  with  negligence  in  not  changing  the  switch, 
in  the  particular  instance,  by  means  of  which  the  accident  occurred, 
by  which  the  plaintiff  sustained  a  severe  loss.    It  ought,  perhaps,  to 


CHAP.   XXIV.]  THE   FELLOW   SERVANT   RULE.  711 

be  stated,  in  justice  to  the  person  to  whom  this  negligence  is  imputed, 
that  the  fact  is  strenuously  denied  by  the  defendants,  and  has  not 
been  tried  by  the  jury.  By  consent  of  the  parties,  this  fact  was 
assumed  without  trial,  in  order  to  take  the  opinion  of  the  whole 
court  upon  the  question  of  law,  whether,  if  such  was  the  fact,  the 
defendants,  under  the  circumstances,  were  liable.  Upon  this  question, 
supposing  the  accident  to  have  occurred,  and  the  loss  to  have  been 
caused,  by  the  negligence  of  the  person  employed  to  attend  to  and 
change  the  switch,  in  his  not  doing  so  in  the  particular  case,  the 
court  are  of  opinion  that  it  is  a  loss  for  which  the  defendants  are  not 
liable,  and  that  the  action  cannot  be  maintained. 

Plaintiff  nonsuit. 


COON   V.   THE   SYRACUSE   &   UTICA  EAILEOAD   CO. 

6  N.  Y.  492.     1851. 

Action  on  the  case,  to  recover  for  injuries  sustained  by  the  plain- 
tiff in  consequence  of  being  run  over  by  a  train  of  cars  on  the 
defendant's  railroad,  through  the  negligence,  as  alleged  in  the 
declaration  of  the  defendants.  The  plea  was  the  general  issue. 
The  case  was  tried  at  the  Oneida  Circuit,  in  September,  1847,  before 
Pratt,  J. 

It  appeared  that  the  plaintiff  was  employed  by  the  defendants 
in  keeping  their  road  track  in  repair;  his  duties  being,  in  part,  to 
follow  in  a  hand  ear,  certain  trains  of  passenger  cars  over  a  portion 
of  their  track,  making  such  repairs  as  he  could  make,  when  required, 
reporting  other  defects,  repairing  fences,  etc.  While  engaged  in  the 
discharge  of  this  duty,  following  with  his  car  a  passenger  train  in 
the  evening,  he  was  run  over  and  so  severely  injured  as  to  be  made 
a  cripple  for  life,  by  a  train  of  the  defendants'  cars  called  a  stake 
train,  used  to  carry  materials  for  repairing  the  track.  The  train  was 
without  lights,  did  not  usually  pass  at  that  hour,  and  the  plaintiff 
had  no  notice  that  it  was  expected.  A  number  of  witnesses  were 
examined,  with  a  view  of  showing  that  the  accident  occurred  in  con- 
sequence of  the  improper  running  or  management  of  the  stake 
train;  the  running  it  immediately  after  the  passenger  train,  when 
the  track  men  were  on  the  track  with  hand  cars ;  its  not  being  pro- 
vi4ed  with  lights,  when  running  in  the  evening;  the  want  of  notice 
to  the  workmen  on  the  line  that  it  was  expected,  and  other  circum- 
stances of  like  character.  It  did  not,  however,  appear  that  any 
instructions  were  given  in  relation  to  the  time  or  manner  of  running 
the  train,  by  any  persons  connected  with  the  company  other  than 
those  engaged  in  running  the  train;  except  that  when  the  train 
passed  Rome,  a  station  five  or  six  miles  east  of  the  place  where  the 


713  COON   V.   SYRACUSE   &    UTICA   R,    R.    CO.       [CHAP.   XXIV. 

accident  happened,  the  person  who  had  the  general  charge  of  that 
part  of  the  road  informed  the  engineer  on  the  train  that  Haskins, 
another  trackman,  was  on  the  track,  with  a  hand  car  without  a  light, 
and  cautioned  him  to  be  careful.  Haskins  was  on  a  route  adjoining 
that  of  the  plaintiff,  and  extending  to  the  Rome  station.  He  had 
been  informed  that  the  stake  train  was  expected,  and  being  on  the 
lookout  for  it,  discovered  its  approach  in  season  to  remove  his  car  and 
allow  it  to  pass  a  short  time  before  it  reached  the  plaintiff's  route. 

After  the  evidence  on  the  part  of  the  plaintiff  was  closed,  the  de- 
fendants' counsel  moved  for  a  nonsuit,  which  was  granted  by  the 
court,  on  the  ground,  "  that  one  servant  could  not  sustain  an  action 
against  his  employer,  for  damages  sustained  in  consequence  of  the 
negligence  of  another  servant  of  the  same  employer,  in  the  same 
general  business."  The  plaintiff's  counsel  excepted  to  the  decision, 
"  and  insisted  that  the  defendants  were  not  entitled  to  a  nonsuit,  and 
that  the  ease  should  go  to  the  jury  upon  the  facts  proved."  The 
Supreme  Court  at  a  general  term  denied  a  motion  for  a  new  trial,  and 
judgment  was  entered  against  the  plaintiff,  who  prosecuted  this 
appeal.    (See  6  Barb.  231.) 

Gardiner,  J.  It  has  been  decided  in  England,  and  in  Massachu- 
setts and  some  other  states  of  the  Union,  that,  where  different  persons 
are  employed  by  the  same  principal  in  a  common  enterprise,  no  action 
can  be  sustained  by  them  against  their  employer,  on  accoimt  of  in- 
juries sustained  by  one  agent  through  the  negligence  of  another. 
Priestley  v.  Fowler,  3  Mees.  &  Welsh.  1 ;  Farwell  v.  B.  &  W.  E.  R.  Co., 
4  Met.  49 ;  Murray  v.  S.  Carolina  R.  R.  Co.,  1  McMullan,  385. 

In  Brown  v.  Maxwell,  6  Hill,  594,  the  case  from  Massachusetts  was 
cited  and  approved  by  the  learned  judge  who  delivered  the  opinion  of 
the  Supreme  Court  in  that  case.  The  good  sense  of  the  principle 
when  applied  to  individuals  engaged  in  the  same  service  is  sufficiently 
obvious.  There  may  be  more  doubt  of  its  justice,  in  reference  to  those 
whose  employments  are  distinct,  although  both  may  be  necessary  to 
the  successful  result  of  a  common  enterprise. 

The  case  before  us  cannot  be  distinguished  from  that  in  Metcalf. 
To  the  elaborate  opinion  of  Chief  Justice  Shaw,  nothing  can  be  added 
without  danger  of  impairing  the  force  of  his  reasoning.  It  is  only 
necessary  to  express  my  concurrence  generally  in  the  views  there  sug- 
gested, which,  if  adopted,  must  be  held  as  decisive  in  this  case. 

The  ground  taken  upon  the  argument  by  the  counsel  for  the  plain- 
tiff, that  there  was  testimony  tending  to  show  that  the  stake  train, 
when  the  accident  occurred,  was  running  in  accordance  with  the  regu- 
lations of  the  defendants,  and  therefore  the  injury  was  the  act  of  the 
corporation,  and  not  of  its  agents,  is  not  sustained  by  the  evidence  in 
the  bill  of  exceptions ;  and  if  it  was,  the  point  was  not  made  distinctly 
upon  the  trial.  The  judge  put  his  decision  in  terms  upon  the  ground 
that  the  defendants  were  not  responsible  to  the  plaintiff  for  the  negli- 


CHAP.    XXIV.]  THE   FELLOW   SERVANT   RULE.  713 

gence  of  the  conductor  of  the  stake  train.  If  the  plaintiff's  counsel 
wished  to  submit  to  the  jury  the  question  now  raised,  that  the  con- 
ductor was  merely  complying  with  the  commands  of  his  principals, 
and  that  negligence  was  not  to  be  imputed  to  him,  but  to  the  defend- 
ants themselves,  a  request  to  that  effect  should,  under  the  circum- 
stances, have  been  made  to  the  judge.  As  it  was,  he  was  left  to 
suppose  that  the  cause  was  intended  to  be  tried  upon  the  grounds 
suggested  by  him  in  his  decision. 

I  think  that  the  judgment  of  the  Supreme  Court  should  be 
affirmed. 

Foot,  J.  The  decision  of  this  case  depends  on  a  very  important 
principle,  one  which  has  been  unfolded  and  brought  to  view  within 
the  last  twenty  years,  and  principally  by  the  new  business  commenced 
within  that  period  and  now  extensively  prosecuted,  of  transporting 
persons  and  property  by  steam  on  railways.  It  is  this :  that  an  em- 
ployer is  not  liable  to  one  of  his  agents  or  servants  for  the  negligence 
of  another  of  his  agents  or  servants  engaged  in  the  same  general 
business.  Was  this  principle  sought  to  be  applied  for  the  first  time 
in  the  present  action,  I  should  deem  it  my  duty,  not  only  to  examine 
it  in  all  its  bearings,  test  its  soundness  by  all  the  means  at  my  com- 
mand, and  endeavor  to  reach  a  correct  conclusion,  but  also  to  assign 
in  full  my  reasons.  This  duty  has,  however,  been  already  performed, 
ably  and  learnedly,  by  three  eminent  judicial  tribunals:  viz.,  the 
Court  of  Exchequer  in  England,  the  Court  of  Appeals  of  South  Caro- 
lina, and  the  Supreme  Court  of  Massachusetts.  Priestley  v.  Fowler,  3 
Mees.  &  Welsh.  1 ;  Murray  v.  S.  Carolina  K.  R.  Co.,  1  McMullan,  385 ; 
Farwell  v.  B.  &  W.  R.  R.  Co.,  4  Met.  49.  They  all  concur  in  sanction- 
ing the  principle,  and  I  fully  acquiesce  in  their  judgment.  Mr.  Jus- 
tice Beardsley  has  also  expressed  his  approbation  of  it,  in  the  case  of 
Brown  v.  Maxwell,  6  Hill,  594.  The  Supreme  Court  of  Massachu- 
setts has  re-afBrmed  it,  in  the  case  of  Hayes  v.  The  Western  R.  R. 
Corporation,  3  Cushing,  270,  and  the  English  Court  of  Exchequer,  in 
the  case  of  Hutchinson  v.  The  York  R.  R.  Co.,  14  London  Jurist.  It 
must  now  be  considered  as  settled,  and  hereafter  to  form  a  part  of  the 
common  law  of  the  country.  Judgment  affirmed. 


THE   PETREL. 

[1893]  p.  320. 

The  President  (Sir  Francis  H.  Jeune).  ...  On  January  5, 
1893,  the  Petrel  came  into  collision  with  the  Cormorant,  and  the  Cor- 
morant was  sunk.  The  owners  of  both  vessels  are  the  General  Steam 
Navigation  Company.  It  is  admitted  that  the  collision  was  caused 
by  the  negligence  of  those  navigating  the  Petrel,  and  it  is  proposed 


714  .  THE   PETREL.  [CHAP.   XXIV. 

to  pay  into  court  the  sum  for  which  the  owners  of  the  Petrel  are  liable. 
The  first  question  is  whether  the  master,  officers,  and  crew  of  the 
Cormorant  can  claim  against  this  fund  in  respect  of  their  effects  lost 
in  that  vessel.  It  is  said  that  they  cannot,  by  reason  of  their  common 
employment  with  the  master,  officers,  and  crew  of  the  Petrel. 

No  doubt  the  captain  and  crew  of  the  Cormorant  had  a  common 
master  with  the  captain  and  crew  of  the  Petrel;  but  were  they  in 
common  employment  with  each  other? 

It  is  remarkable  that  although  propositions  of  law  defining  com- 
mon employment  and  recognizing  its  limitations  have  more  than  once 
been  laid  down,  and  have  been  illustrated  by  instances  in  which  com- 
mon employment  has  been  held  to  exist,  there  appears  to  be  no  decided 
case  in  the  English  courts  (there  are  several  in  the  Scotch  courts) 
in  which  upon  consideration  of  the  tests  of  it  common  employment 
has  been  negatived.  The  general  principles  of  the  law  of  common 
employment  were  fully  laid  down  in  the  first  case  on  the  subject, 
Priestley  v.  Fowler,  3  M.  &  W.  1.  But  I  think  that  the  most  com- 
plete exposition  of  what  constitutes  common  employment  is  to  be 
found  in  the  great  judgment  of  Shaw,  C.  J.,  of  Massachusetts,  in 
Farwell  v.  Boston  Eailroad  Corporation,  4  Metcalf,  49,  quoted  at 
length  in  3  Macq.  H.  L.  C.  316,  which,  no  doubt,  materially  influ- 
enced the  House  of  Lords  in  the  case  of  Bartonshill  Coal  Co.  v.  Reid, 
3  Macq.  H.  L.  C.  266,  in  which,  reversing  the  decision  of  the  Court  of 
Sessions,  their  Lordships  held  that  a  miner  laboring  in  a  mine  was 
in  common  emplo}Tnent  with  an  engine-driver  by  whom  the  cage  was 
worked.  Two  phrases  of  Shaw,  C.  J.,  indicate  his  view  of  the  test  of 
common  employment.  One  lays  down  that  he  who  engages  in  the 
employment  of  another  for  the  performance  of  specified  services 
"  takes  upon  himself  the  natural  risks  and  perils  incident  to  the  per- 
formance of  such  services,"  and  the  other  refers  to  the  condition  of 
the  safety  of  each  servant  depending  much  on  the  care  and  skill  with 
which  each  other  shall  perform  his  appropriate  duty.  This  view  was 
adopted  by  Blackburn,  J.,  in  a  judgment  affirmed  by  the  Exchequer 
Chamber,  Morgan  v.  Vale  of  Neath  Ey.  Co.,  5  B.  &  S.  570,  at  p.  580; 
Law  Rep.  1  Q.  B.  149,  in  these  words :  "  I  quite  agree  that  it  is  neces- 
sary that  the  employment  must  be  common  in  this  sense,  that  the 
safety  of  the  one  servant  must  in  the  ordinary  and  natural  course  of 
things  depend  on  the  care  and  skill  of  the  others.  This  includes 
almost  if  not  every  case  in  which  the  servants  are  employed  to  do 
joint  work,  but  I  do  not  think  it  is  limited  to  such  cases.  There  are 
many  cases  where  the  immediate  object  on  which  the  one  servant  is 
employed  is  very  dissimilar  from  that  on  which  the  other  is  employed, 
and  yet  the  risk  of  injury  from  the  negligence  of  the  one  is  so  much 
a  natural  and  necessary  consequence  of  the  employment  which  the 
other  accepts,  that  it  must  be  included  in  the  risks  which  are  to  be 
considered  in  his  wages."    On  this  principle,  it  having  been  previously 


CHAP.   XXIV.]  THE   FELLOW   SERVANT   RULE.  715 

decided  in  Hutchinson  v.  York,  etc.,  Ey.  Co.,  5  Ex.  343,  that  the 
engine-driver  of  a  train  and  a  servant  of  the  company  carried  in  the 
train  were  in  common  employment,  it  was  held  that  a  carpenter  re- 
pairing a  turntable  was  in  common  emplo3rment  with  shunters  working 
traflfic  in  connection  with  it.  The  view  of  Shaw,  C.  J.,  appears  again 
to  have  been  followed  in  Lovell  v.  Howell,  1  C.  P.  D.  161,  in  which 
the  principle  approved  was  that  the  servant  accepts  the  ordinary  risk 
incident  to  his  service.  The  principle  of  safety  being  dependent  "  in 
the  ordinary  and  natural  course  of  things  "  on  the  skill  and  care  of 
the  fellow  servant,  and  of  "  risk  of  injury  being  a  natural  and  neces- 
sary consequence "  of  his  want  of  skill  or  care,  is  consistent  with, 
though  perhaps  more  exact  than,  the  test  suggested  by  Lord  Chelms- 
ford in  the  case  of  Bartonshill  Coal  Co.  v.  McGuire,  3  Macq.  H.  L.  C. 
300,  at  p.  307,  from  the  negative  point  of  view,  that  common  employ- 
ment does  not  exist  when  injury  happens  to  the  servant  "  on  occasions 
foreign  to  his  employment,"  or  to  servants  engaged  "  in  different  de- 
partments of  duty." 

It  was  suggested  in  argument  before  me  with  reference  to  the  case 
of  Charles  v.  Taylor,  3  C.  P.  D.  492,  that  the  physical  contiguity  of 
the  employments  constitute  a  test.  But,  as  Shaw,  C.  J.,  points  out, 
this  does  not  afford  a  distinction  on  which  a  practical  rule  can  be 
established.  In  all  cases  the  immediate  instrument  of  the  physical 
injury  must  be  contiguous  to  the  person  injured,  and  in  most  cases 
the  person  who  causes  physical  injury  is  not  far  from  the  person  to 
whom  it  results.  But  I  suppose  that  the  signalman  at  one  end  of  a 
rifle-range  is  clearly  in  common  employment  with  the  marker  at  £he 
other,  when  the  two  have  a  common  master ;  and,  to  give  a  stronger 
instance,  a  servant  who  unskilfully  packs  dynamite  in  a  factory,  and 
another  who  in  unpacking  it  at  a  distant  warehouse  is  injured  by  its 
explosion,  are  clearly  in  common  employment.  On  the  other  hand, 
mere  contiguity,  if  unusual  or  accidental,  would  not  be  consistent  with 
common  employment. 

I  doubt,  also,  if  "  one  common  object "  —  the  phrase  emphasized 
by  Bramwell,  B.,  in  Waller  v.  South  Eastern  Ry.  Co.,  2  H.  &  C.  102, 
at  p.  112,  supplies  an  exact  criterion.  As  Blackburn,  J.,  points  out, 
there  may  be  common  employment,  though  the  immediate  object  of 
the  labor  of  the  two  servants  be  very  different,  and  if  the  common 
object  be  remote,  such  as  that  of  making  money  for  the  employer  ( the 
sole  nexus  of  employment  suggested  as  existing  between  the  two  cap- 
tains in  this  case),  there  may  be  no  common  employment.  If  a  per- 
son carried  on  the  occupation  of  a  banker  and  a  brewer  in  different 
localities,  and  his  bill  clerk  was  run  over  by  his  drayman,  it  would  be 
strange  to  say  that  the  two  were  servants  in  common  employment. 
I  think,  therefore,  that  probably  no  more  complete  definition  can  be 
formulated  than  is  afforded  by  the  language  of  Blackburn,  J.  The 
consideration  that  the  risk  of  injury  to  the  one  servant  is  the  natural 


716  MCTAGGAET  V.   THE   EASTMAN'S   CO.      [CHAP.   XXIV. 

and  necessary  consequence  of  misconduct  in  the  other  implies  that  the 
skill  and  care  of  the  one  is  of  special  importance  to  the  other  by  reason 
of  the  relations  between  their  services. 

Tried  by  this  principle,  can  it  be  said  that  the  safety  of  the  captain 
of  one  ship  of  a  company  is  in  the  ordinary  and  natural  course  of 
things  dependent  on  the  skill  and  care  of  the  captain  of  another  ship 
of  the  same  company,  or  that  injury  by  the  negligence  of  one  is  an 
ordinary  risk  of  the  service  of  the  other?  In  some  cases  it  might 
gerhaps ;  for  example,  it  might  if  all  the  ships  of  the  company  were 
in  the  habit  of  meeting  in  the  same  dock,  and  the  safety  of  each  thus 
became,  in  the  ordinary  course  of  things,  dependent  on  the  skill  with 
which  the  other  was  navigated.  But  in  regard  to  navigation  on  the 
high  seas,  or  in  the  estuary  of  the  Thames,  would  a  captain  of  one 
ship  of  the  General  Steam  Navigation  Company  have  more  reason  to 
be  interested  in  the  skill  of  a  captain  of  another  ship  of  the  company 
than  in  that  of  the  masters  of  the  myriad  other  craft  in  whose  vicinity 
he  might  happen  to  navigate  ?  By  no  reasonable  supposition  can  it  be 
imagined  that  he  would.  I  think,  therefore,  that  these  two  captains 
were  not  in  common  employment.  .  .  . 

[Held,  accordingly,  that  the  master,  officers,  and  crew  of  the  Cor- 
morant had  a  claim  against  the  fund  in  respect  of  their  effects  lost 
in  that  vessel.] 


McTAGGAET   v.    THE   EASTMAN'S    COMPANY. 

27  Misc.  (City  Ct.  of  N.  Y.,  Gen.  T.)   184.     1899. 

Appeal  from  a  judgment  in  favor  of  plaintiff,  entered  upon  a  ver- 
dict, and  from  an  order  denying  a  motion  for  a  new  trial. 

FiTzsiMONS,  Ch.  J.  The  testimony  clearly  shows  that,  although 
the  plaintiff  and  James  Murphy  were  both  employed  by  defendant,  yet 
they  were  not  in  the  same  common  employment;  they  were  servants 
of  defendant,  but  were  not  fellow  servants;  the  defendant's  driver. 
Murphy,  was  employed  by  it  as  a  driver  of  one  of  the  wagons  used 
by  it  in  the  meat  business  which  it  carried  on;  desiring  to  extend 
their  business  premises,  it  employed  masons  and  hod-carriers  to  erect 
the  necessary  brick  walls  of  the  new  addition  to  its  premises.  Plain- 
tiff was  one  of  the  hod-carriers  so  employed,  and  while  employed 
in  that  work,  he  was,  by  the  careless  manner  in  which  Murphy 
acted,  thrown  from  a  ladder  which  was  used  by  him  and  others 
employed  in  the  erection  of  a  building  mentioned,  and  severely 
injured. 

Murphy  drove  his  truck  against  the  ladder  while  plaintiff  was  in 
the  act  of  descending,  causing  it  to  fall  as  well  as  plaintiff;  under 
the  circumstances,  to  contend  that  these  men  were  in  the  same  common 


CHAP.    XXIV.]  THE   FELLOW    SERVANT   RULE.  '       717 

employment  and  were  fellow  servants  is  an  absurdity  in  our  opinion. 
No  error  was  committed  at  the  trial,  and  judgment  is  aflBrmed,  with 
costs. 

McCarthy  and  Hascall,  JJ.,  concur. 

Judgment  affirmed,  with  costs} 


UNION    PACIFIC    RAILEOAD    CO.   v.    EEICKSON. 
41  Neb.  1.     1894. 

Action  by  Lars  Erickson  against  the  Union  Pacific  Railroad  Com- 
pany.   Judgment  for  plaintiff,  and  defendant  brings  error. 

Irvine,  C.  Erickson  was  employed  by  the  railway  company  as  a 
section  hand,  and  was  engaged  in  his  work  repairing  the  roadbed  of 
the  railroad  near  Fremont,  when  a  fast  passenger  train  approached, 
and  he  stepped  aside  to  let  it  pass.  As  the  train  passed  him,  a  large 
piece  of  coal  fell  from  the  tender  pf  the  locomotive,  struck  the  ground 
near  him,  and  broke  into  smaller  pieces,  one  of  which  flew  towards 
him,  striking  him,  and  causing  a  fracture  of  the  leg.  He  brought 
this  action  against  the  railroad  company  alleging  as  negligence  that 
the  piece  of  coal  had  been  negligently  allowed  to  fall  from  the  tender 
while  the  train  was  running  at  a  high  rate  of  speed;  that  the  coal 
had  been  negligently  loaded  and  negligently  permitted  to  remain  on 
the  tender  in  a  position  rendering  it  liable  to  fall  and  to  be  cast  off  by 
the  motion  of  the  train.  The  railway  company  answered,  among  other 
things  denying  any  negligence  upon  its  part.  .  .  .  There  was  a 
verdict  and  judgment  for  Erickson  for  $1,625.  .  .  . 

The  next  proposition  is  that  Erickson  was  a  fellow  servant  of  who- 
ever was  guilty  of  negligence,  and  that  the  company  is  therefore  not 
liable.  Upon  this  subject  elaborate  briefs  have  been  filed  upon  either 
side,  reviewing  nearly  all  the  American  authorities.  We  shall  not  here 
undertake  such  a  review.  We  are  aware  of  the  hopeless  conflict?  exist- 
ing. In  fact,  a  study  of  the  question  must  convince  any  one  that 
shortly  after  the  introduction  of  railways  the  law  entered  upon  a  slow 
but  marked  period  of  transition  upon  the  subject  of  fellow  servants. 
No  definite  result  has  yet  been  reached.  Probably  the  leading  case 
both  in  America  and  in  England  applying  the  doctrine  of  fellow  ser- . 
vants  to  all  the  employees  of  a  common  master  is  that  of  Farwell  v. 
Railroad  Corp.,  4  Mete.  (Mass.)  49.  All  the  cases  holding  that  broad 
doctrine  seem  to  be  based  directly  or  indirectly  upon  the  authority  or 
the  reasoning  of  Chief  Justice  Shaw  in  that  case.  It  was  decided  in 
1842  before  the  railway  system  of  the  country  was  developed,  before 
the  existence  of  other  large  corporations  employing  vast  numbers  of 

»  Affirmed,  28  lilM.  12T. 


718  UNION   PAC.   R.   B.   CO.   V.   EEICKSON.       [CHAP.   XXIV. 

men  engaged  in  the  pursuit  of  one  general  object,  but  performing 
different  functions,  and  engaged  in  many  distinct  departments.  This 
state  of  affairs  was  then  just  arising,  and  the  vast  change  of  conditions 
in  the  relations  of  master  and  servant  was  only  then  beginning  to 
appear.  The  extent  of  that  change,  and  the  consequences  of  applying 
old  rules  to  new  conditions  could  not  then  be  foreseen.  In  that  case, 
as  in  all  others  upon  the  subject,  the  reasons  for  the  rule  exempting 
masters  from  liability  to  servants  for  injuries  produced  by  the  negli- 
gence of  their  fellow  servants  are  stated  as  twofold :  First,  that  such 
injuries  must  be  presumed  to  be  within  the  contemplation  of  the 
parties  when  they  made  their  contract;  and,  second,  that  public 
policy  requires  the  enforcement  of  such  a  rule,  upon  the  theory  that, 
by  enforcing  it,  each  servant  is  made  closely  observant  of  the  acts  of 
his  fellow  servants,  and  that  the  scrutiny  of  one  another  naturally 
tends  to  eflBciency  and  care.  The  first  reason  given,  where  the  rule  is 
sought  to  be  applied  without  discrimination  to  all  servants  of  a  com- 
mon master,  has  already  been  completely  set  aside  and  disregarded, 
even  by  those  courts  in  America  most  inclined  to  conservatism  upon 
the  subject.  It  is  everywhere  conceded  that  inasmuch  as  a  cor- 
poration can  only  act  through  agents,  and  all  agents  are  servants, 
the  logical  application  of  the  rule  would  discharge  a  corporation  en- 
tirely from  liability  to  its  servants ;  and  this  gives  rise  to  a  corollary 
that  where  the  negligence  is  that  of  a  vice  principal,  whose  acts  must 
be  taken  as  those  of  the  master,  the  rule  does  not  apply.  The  recog- 
nition of  this  exception  was  necessary  to  preserve  another  rule,  that, 
while  a  servant  assumes  the  dangers  incident  to  his  employment,  be 
does  not  assume  dangers  caused  by  the  negligence  of  his  master. 
There  is  as  much  reason  for  holding  that  a  servant  in  entering  an 
employment  contracts  with  a  view  to  possible  negligence  of  the 
master,  as  to  hold  that  he  contracts  with  a  view  to  possible  negligence 
of  the  man  who  works  beside  him  and  upon  the  same  footing.  To 
illustrate  by  reference  to  railways,  which  probably  afford  as  great  a 
variety  of  grades  in  emplo3nnent  as  any  occupation,  can  it  be  logically 
said  that  a  section  man  in  the  matters  within  the  scope  of  his  employ- 
ment is  less  liable  to  err  than  a  conductor,  superintendent,  or  general 
manager  with  reference  to  his  own  duties?  To  the  writer's  mind, 
when  the  first  distinction  was  drawn  between  grades  o/  servants,  the 
force  of  the  general  rule,  so  far  as  it  was  based  upon  contract,  was 
destroyed. 

As  to  the  second  reason  —  that  founded  upon  public  policy  — 
there  is  much  force  in  the  observation  of  Mr.  Justice  Field  in  Railway 
Co.  V.  Eoss,  112  U.  S.  377 :  "  It  may  be  doubted  whether  the  exemp- 
tion has  the  effect  thus  claimed  for  it.  We  have  never  known  parties 
more  willing  to  subject  themselves  to  dangers  of  life  and  limb  because, 
if  losing  the  one  or  suffering  in  the  other,  damages  could  be  recovered 
by  their  representatives  or  themselves  for  the  loss  or  injury.     The 


CHAP.   XXIV.]  THE   FELLOW    SERVANT   RULE.  1119 

dread  of  personal  injury  has  always  proved  sufficient  to  bring  into 
exercise  the  vigilance  and  activity  of  the  servant."  Still,  we  concede 
that  there  may  be  some  force  to  the  rule  so  far  as  grounded  upon 
public  policy,  and  confined  to  servants  who  are,  in  the  language  of 
the  Supreme  Court  of  Illinois,  "  consociated  by  means  of  their  daily 
duties,  or  co-operating  in  the  same  department  of  duty  and  in  the  same 
line  of  employment."  Eailroad  Co.  v.  Moranda,  93  111.  302.  Beyond 
this  line  we  can  see  no  force  in  it.  When  the  authorities  are  exam- 
ined, it  is  found  that  they  range  themselves  in  two  general  classes,  — 
those  following  the  opinion  of  Chief  Justice  Shaw,  and  those  distin- 
guishing between  grades  of  employment  and  employees  in  .distinct 
departments  of  service.  The  principal  objection  urged  to  the  latter 
class  is  that,  by  adopting  such  distinction,  the  courts  overthrow  a  gen- 
eral rule  of  easy  application,  and  adopt  one  not  susceptible  of  precise 
application,  and  uncertain  in  its  results.  Possibly  this  objection  is 
well  taken.  If  so,  we  can  only  say  that  it  accords  with  the  general 
spirit  of  the  common  law.  Perhaps  the  main  distinction  between  the 
civil  law  and  the  common  law  is  that  the  civil  law  is  based  upon  well- 
defined  logical  rules  readily  susceptible  of  ascertainment,  while  the 
common  law  is  founded  upon  broader  general  principles,  to  be  applied 
to  the  diversity  of  human  affairs  in  such  a  manner  as  to  favor  individ- 
ual liberty  and  to  conform  themselves  to  changed  conditions.  When 
the  law  of  fellow  servants  was  first  announced,  business  enterprises 
were  comparatively  small  and  simple.  The  servants  of  one  master 
were  not  numerous ;  they  were  all  engaged  in  the  pursuit  of  a  simple 
and  common  undertaking.  Now  things  have  changed.  Large  enter- 
prises are  conducted  by  persons  or  corporations  employing  vast  num- 
bers of  servants,  divided  into  classes,  each  pursuing  a  different  por- 
tion of  the  work,  and  each  practically  independent  of  the  other.  The 
old  reasons  do  not  apply  to  the  new  conditions.  We  are  not  prepared 
in  this  case  to  propose  any  set  rule  for  always  determining  when  two 
employees  are  fellow  servants  within  the  meaning  of  the  law,  and 
when  they  are  not,  nor  are  we  required  for  present  purposes  so  to  do. 
Erickson  was  a  section  man.  He  was  employed,  with  several  others, 
to  keep  the  roadbed  and  the  track  in  repair.  The  fireman  was  em- 
ployed to  fire  the  engine,  and  perform  certain  duties  in  connection 
with  the  operation  of  trains.  Some  one  was  employed  at  Grand  Island 
to  load  the  tenders  with  coal.  With  either  the  fireman  or  this  third 
person  Erickson  had  nothing  in  common  except  that  he  drew  his  pay 
from  a  common  source,  and  that,  in  a  broad  sense,  they  were  all  carry- 
ing out  parts  of  a  vast  transportation  business.  Erickson  had  no 
control  over  either  of  the  others,  no  opportunity  of  judging  of  their 
competency,  no  supervision  of  their  specific  acts,  and  only  by  adopting 
the  broadest  rule  as  announced  by  Chief  Justice  Shaw  could  we  hold 
them  to  be  fellow  servants.  This  rule  we  are  not  prepared  to  adopt. 
We  hold,  on  the  contrary,  that  employment  in  the  service  of  a  com- 


720  UNION    PAC.    B.    R.    CO.   V.   ERICKSON.       [CHAP.    XXIV. 

mon  master  is  not  alone  sufficient  to  constitute  two  men  fellow 
servants  within  the  rule  exempting  the  master  from  liability  to  one 
for  injuries  caused  by  the  negligence  of  the  other,  and  that  to  make 
the  rule  applicable  there  must  be  some  consociation  in  the  same  de- 
partment of  duty  or  line  of  employment.  For  the  purposes  of  this 
case  we  are  content  to  follow  the  opinion  of  Mr.  Justice  Miller  in 
Garrahy  v.  Eailroad  Co.,  25  Fed.  258,  where,  in  the  light  of  quite 
recent  decisions  and  of  the  mature  judgment  of  the  Supreme  Court  of 
the  United  States  in  Railway  Co.  v.  Eoss,  supra,  he  held  that  persons 
occupying  such  relations  were  not  fellow  servants  within  the  meaning 
of  the  rule.  .  .  .  Judgment  affirmed.^ 

«  In  LouisTllle  &  N.  R.  Co.  v.  Dillard,  114  Tenn.  240,  a  brakeman  on  a  freight 
train  was  injured  In  a  collision  between  that  train  and  a  passenger  train,  and 
In  an  action  brought  against  the  railroad  company  to  recover  for  the  injuries 
thus  received,  the  plaintiff  relied  in  part  upon  the  negligence  of  the  conductor 
on  the  passenger  train.  In  holding  that  the  conductor  and  the  brakeman  were 
fellow  servants,  the  court  said  :  — 

"  Was  the  passenger  conductor  in  charge  of,  or  engaged  in,  a  separate  depart- 
ment  of  the  master's  business? 

"  In  this  state  the  departmental  doctrine  is  recognized  in  railway  cases.  The 
grounds  on  which  it  rests  are  thus  stated  in  Coal  Creek  Mining  Company  v.  Davis, 
90  Tenn.  711,  719,  720  : 

"  '  The  doctrine  rests  upon  the  theory  that  the  vast  extent  of  the  business  of 
railway  companies  has  led  to  the  division  of  their  business  into  separate  and 
distinct  departments ;  that  by  reason  of  this  division  a  servant  in  one  branch  or 
department  has  no  sort  of  association  or  connection  with  one  in  another  depart- 
ment ;  that  this  absence  of  association  gives  the  servant  no  opportunity  of  observ- 
ing the  character  of  a  servant  in  another  department  of  labor,  and  no  opportunity 
to  guard  against  the  negligence  of  such  servant.  The  want  of  consociation  is  the 
idea  underlying  this  limitation.  This  rule  has  not  been  extended  by  us  l>eyond 
railroad  corporations,  and  we  are  not  disposed  to  extend  it  further  than  to  the 
class  of  employments  to  which  it  has  been  heretofore  limited.' 

"  Under  this  doctrine  it  has  been  held  that  a  track  repairer  was  in  a  different 
department  from,  and  hence  not  the  fellow  servant  of,  the  crew  of  a  train  running 
upon  the  track  (Haynes  v.  Railroad  Co.,  3  Cold.  222)  ;  for  the  same  reason,  that 
a  section  foreman  was  not  the  fellow  servant  of  the  train  crew  (Railroad  v. 
Carroll,  6  Heisk.  347,  361)  ;  that  a  watchman  was  not  the  fellow  servant  of  an 
engineer  (Railroad  v.  Robertson,  9  Heisk.  276)  ;  a  telegraph  operator  at  a  way 
station  not  the  fellow  servant  of  the  conductor  of  a  train  (Railroad  Co.  v.  De 
Armond,  86  Tenn.  73)  ;  a  car  Inspector  not  the  fellow  servant  of  the  crew  of  a 
switch  engine  (Taylor  v.  Railroad  Co.,  93  Tenn.  307)  ;  a  depot  agent  not  the 
fellow  servant  of  the  conductor  of  a  train  (Railroad  Co.  v.  Jackson,  106  Tenn. 
438)  ;  a  bridge  crew  not  the  fellow  servant  of  the  crew  of  a  freight  train  (Free- 
man V.  Railroad,  107  Tenn.  340)  ;  and  an  engineer  not  the  fellow  servant  of  a 
telegraph  operator  (Railroad  Co.  v.  Bentz,  108  Tenn.  670). 

"  We  have  no  case  holding  that  separate  trains  constitute  separate  and  dis- 
tinct departments  of  railway  service,  nor  do  we  think  they  can  be  so  treated  on 
principle.  The  reason  underlying  the  departmental  doctrine  resides  in,  as  already 
stated,  the  need  of  consociation  to  enable  co-employees  to  judge  of  the  caution, 
diligence,  and  efficiency  of  each  other,  in  order  that  they  may  properly  protect 
themselves  against  negligence.  In  distinct  departments  of  the  service  they  are 
regarded  as  constantly  working  apart  from  each  other,  without  the  opportunity 
of  mutual  observation  and  criticism.  This  reason,  however,  cannot  be  held  to 
apply  to  the  crews  of  different  trains  running  upon  the  tracks  of  the  same  company. 
It  does  not  appear  that  such  crews  are  permanently  attached  to  any  special  trains. 
Moreover,  even  if  not  associated  upon  the  same  train,  the  crews  of  each  train,  in 
passing  and  repassing  and  in  mingling  with  each  other  in  the  handling  of  traffic  in 
the  course  of  their  work,  necessarily  have  an  opportunity  of  judging  to  some  extent 
how  the  various  trains  are  managed  by  the  people  who  man  them.  At  best,  the 
amelioration  of  the  dangers  incident  to  a  hazardous  business  cannot  he  very  great 
for  the  servants  of  a  common  master,  even  when  they  work  in  the  same  department, 
where  the  number  of  such  co-employees  is  great,  as  very  often  happens  in  the  rail- 
way business,  and  in  other  kinds  of  business. 

"  If  the  conductor  of  the  passenger  train  in  question  had  no  control  over  the 


CHAP.   XXIV.]  THE   FELLOW  SERVANT  RULE.  .721 

THE   CHICAGO   AND   EASTERN"   ILL.   R.   R.   CO.  v, 

WHITE. 

209  111.  124.     1904. 

Mr.  Justice  Cartwright  delivered  the  opinion  of  the  court : 

This  is  an  appeal  from  a  judgment  of  the  Appellate  Court  for 
the  First  District  affirming  a  judgment  of  the  Superior  Court  of  Cook 
county  in  favor  of  appellee,  and  against  appellant,  in  an  action  on  the 
case  prosecuted  to  recover  damages  for  the  death  of  Samuel  C. 
Woodward,  a  brakeman  in  the  employ  of  appellant,  who  was  killed  in 
its  railroad  yard  in  Chicago  on  December  22,  1900. 

At  the  conclusion  of  the  evidence  the  defendant  asked  the  court  to 
instruct  the  jury  to  return  a  verdict  of  not  guilty.  The  court  refused 
to  give  the  instruction,  and  the  refusal  is  assigned  as  error  and  is  the 
principal  subject  of  argument  by  counsel  on  both  sides. 

It  was  proved,  and  is  not  denied,  that  the  death  of  Woodward 
resulted  from  the  negligence  of  other  servants  of  the  defendant,  and 
it  is  contended  that  the  negligent  servants  were  fellow  servants  with 
Woodward.  The  declaration  consisted  of  a  single  count,  alleging 
that  Woodward  was  employed  by  the  defendant  as  a  brakeman  on 
a  train  of  cars  standing  on  the  side-track  of  defendant  in  its  railroad 
yard  in  Chicago;  that  the  train  had  been  made  up  and  was  headed 
south;  that  deceased  went  between  cars  to  repair  an  air-brake,  and 
that  while  there  the  defendant  carelessly  and  negligently  backed 
another  train  against  his  train  and  killed  him.  There  was  little  or 
no  controversy  as  to  the  facts,  and  the  material  facts  proved  are  as 
follows:  Woodward  was  head  brakeman  on  a  freight  train  which 
made  daily  trips  between  Chicago  and  Brazil,  Indiana,  leaving  Chi- 
cago about  twelve  o'clock.  The  crew  to  which  he  belonged  took  the 
train  out  usually  three  times  a  week.  The  railroad  yard  in  Chicago 
extended  from  Thirty-third  to  Thirty-seventh  Street,  and  consisted 
of  two  divisions,  known  as  the  "  new  yard "  and  the  "  old  yard." 
The  old  yard  was  on  the  west,  and  contained  tracks  numbered  from 
1  to  18.  The  new  yard  was  on  the  east  side,  and  contained  tracks 
numbered  1  to  26,  and  all  the  tracks  formed  a  continuous  system, 
connected  by  lead  tracks  and  switches  and  forming  one  yard.  De- 
fendant had  two  switching  crews  employed  in  this  yard  —  one  at  the 
north  end,  which  broke  up  and  switched  trains  arriving  in  the  yard 

brakeman  on  the  freight  train,  or  was  not  charged  with  any  duty  of  the  master 
towards  him,  as  In  the  furnishing  of  tools  and  appliances  or  a  safe  place  to  work, 
or  was  not  In  a  dlfterent  department  of  the  master's  service  (and  we  have  seen  that 
he  had  no  such  powers  and  bore  no  such  relation),  which  are  the  only  exceptions 
our  cases  recognize  as  taking  co-employees  out  of  the  class  of  fellow  servants,  then 
the  said  conductor  and  brakeman  were  fellow  servants,  and  the  master  was  not 
liable  for  the  Injuries  Inflicted  upon  one  by  the  negligence  of  the  other.  This  con- 
elusion  seems  Inevitable,  on  principle." 

46 


722        CHICAGO  &  EASTEBN  ILL.  R.  R,   00.  V.   WHITE.      [CHAP.  XXIV. 

from  the  road,  setting  the  cars  on  various  tracks  to  go  to  other  roads 
or  to  freight  houses,  and  the  other  at  the  south  end,  which  made  up 
trains  to  go  out  on  the  road.  When  a  freight  train  came  in  from  the 
south  it  stopped  on  any  track  which  was  unoccupied,  and  the  engine 
was  detached  and  went  to  the  roundhouse  at  the  north  end  of  the 
yard,  and  it  was  the  duty  of  the  head  brakeman  to  accompany  the 
J  engine  for  the  purpose  of  throwing  switches.  Trains  were  generally 
i  made  up  to  go  out  on  the  road  by  the  south-end  crew,  and,  when 
ready  to  go  out,  the  engine  was  taken  from  the  roundhouse  to  the 
head  of  the  train,  which  was  made  up  for  departure,  and  it  was  the 
duty  of  the  head  brakeman  to  accompany  it.  It  would  take  any 
track  that  might  be  unoccupied  to  the  head  of  the  train.  In  going  to 
and  from  the  roundhouse  the  engine  was  liable  to  traverse  the  whole 
length  of  the  tracks  in  the  yards,  passing  over  the  same  tracks  and 
through  the  same  switches  as  the  switching  crews.  In  making  up 
trains  the  crew  at  the  south  end  would  switch  from  one  track  to 
another,  and  in  breaking  up  trains  the  switch  crew  at  the  north  end 
•  used  the  various  switch  tracks  in  the  same  way.  There  was  no 
dividing  line  between  the  switch  crews,  and  they  worked  all  over  the 
yard,  wherever  their  duties  called  them.  On  the  day  of  the  accident 
the  train  on  which  Woodward  was  head  brakeman  was  made  up  as 
usual,  consisting  of  about  20  coal  cars,  with  a  way  car  at  the  north 
end.  The  train  was  standing  at  the  south  end  of  the  yard,  and  the 
crew  to  which  Woodward  belonged  took  the  engine  to  the  south  end 
of  the  train  and  coupled  to  it ;  and  Woodward  commenced  to  examine 
the  air  brakes,  starting  from  the  engine,  to  see  if  they  were  in  working 
order.  There  was  a  defect  or  leak  in  the  air  hose  two  or  three  cars 
from  the  engine,  and  Woodward  went  between  the  cars  to  fix  the 
leak.  While  he  was  between  the  cars  the  switch  crew  at  the  north  end 
kicked  13  cars  from  the  north  end  of  the  yard  upon  the  track,  without 
a  brakeman  on  them,  and  they  ran  rapidly  down  the  track,  striking 
the  rear  of  Woodward's  train  with  such  force  as  to  move  it  two  or 
three  car-lengths  before  it  could  be  stopped,  and  he  was  run  over  and 
killed.  He  had  been  employed  as  brakeman  for  five  or  six  months 
on  this  train,  and  before  that  had  been  a  clerk  in  the  office  at  the 
yard,  and  during  all  the  time  of  his  employment  the  manner  in  which 
trains  were  broken  up  and  switched  and  made  up  was  the  same  as  at 
the  time  of  his  death.  The  switch  crew  in  the  yard  were  under  the 
direction  and  control  of  the  yardmaster,  and  the  road  crews,  while 
in  the  yard,  were  also  under  his  direction,  but  from  the  time  the 
train  was  ready  to  leave  until  it  returned  to  the  yard  they  were  under 
the  direction  and  control  of  the  trainmaster. 

Woodward  was  a  servant  of  the  defendant,  and,  his  death  having 
been  caused  by  the  negligence  of  other  servants  of  the  same  master, 
the  request  of  defendant  for  the  instruction  raised  the  question 
whether  there  was  any  evidence  fairly  tending  to  prove  that  the 


CHAP.    XXIV.]  THE  FELLOW   SERVANT   EULE.  723 

relations  of  the  servants  were  such  as  to  render  the  defendant  liable, 
or,  in  other  words,  that  they  were  not  fellow  servants.  If  the  only 
conclusion  to  be  drawn  from  the  evidence  was  that  they  were  fellow 
servants,  the  instruction  should  have  been  given;  but,  if  different 
conclusions  on  that  question  might  be  reached  from  the  evidentiary 
facts  before  the  jury,  it  was  not  error  to  refuse  the  instruction.  One 
of  the  things  to  be  considered  on  that  question  is  whether  the  servants 
were  employed  in  the  same  or  different  departments  of  the  service. 
The  evidence  was  that  the  negligent  switch  crew  and  Woodward  were 
not  employed  in  the  same  department.  The  switch  crews  were  under 
the  control  of  the  yardmaster,  and  performed  all  their  work  under  his 
direction,  while  the  road  crew,  in  the  general  performance  of  their 
duties,  were  under  the  control  of  the  trahimaster ;  and  yet,  when  they 
were  in  the  yard  at  Chicago,  they  were  to  some  extent  brought  within 
the  same  department  as  the  switch  crews  in  handling  their  engine. 
Under  the  rule  in  this  state  relating  to  fellow  servants,  which  is  based 
so  largely  upon  the  doctrine  of  association  in  the  performance  of 
duties,  the  separation  into  different  departmentcs  is  not  a  conclusive 
test.  In  one  sense,  switching  crews  at  different  places  remote  from 
each  other  are  in  the  same  department ;  and  yet,  if  they  do  not  directly 
co-operate  with  each  other,  and  their  usual  duties  are  not  such  as  to 
bring  them  into  habitual  association,  they  are  not  fellow  servants ; 
and,  on  the  other  hand,  where  there  is  association  between  the  servants 
in  the  performance  of  their  duties,  they  are  fellow  servants,  although 
in  some  sense  employed  in  different  departments.  In  Joliet  Steel 
Co.  V.  Shields,  146  111.  603,  the  rule  is  stated  as  follows  (page  609)  : 
"  Persons  may  be  fellow  servants,  although  not  strictly  in  the  same 
line  of  employment.  One  person  may  be  employed  to  transact  one 
department  of  business,  and  another  may  be  employed  by  the  same 
master  to  transact  a  different  and  distinct  branch  of  business;  but 
if  their  usual  duties  bring  them  into  habitual  association,  so  that  tliey 
may  exercise  a  mutual  influence  upon  each  other,  promotive  of  proper 
caution,  such  persons  might  be  regarded  as  fellow  servants.  North 
Chicago  Eolling  Mill  Co.  v.  Johnson,  114  111.  57."  If  servants  are 
directly  co-operating  in  the  particular  business  in  hand,  they  are 
fellow  servants,  although  their  ordinary  duties  are  in  different  depart- 
ments. Abend  v.  Terre  Haute  &  Indianapolis  Railroad  Co.,  Ill  111. 
202.  If,  therefore.  Woodward  and  the  north-end  switch  crew  were 
at  the  time  of  the  accident  directly  co-operating  in  the  particular 
business  of  the  defendant  then  in  hand,  or  if  their  usual  duties  were 
of  such  a  nature  as  to  bring  them  into  habitual  association,  so  that 
they  might  exercise  an  influence  upon  each  other  promotive  of  proper 
caution  for  their  mutual  safety,  then  they  were  fellow  servants,  not- 
withstanding their  employment  in  different  departments  of  the 
service. 
Appellant  claims  that  the  particular  business  in  hand  when  the 


724        CHICAGO   &  EASTERN   ILL.   R.   R.    CO.  V.   WHITE.      [CHAP.   XXI7. 

accident  happened  was  the  whole  business  of  the  railroad  yard,  which 
consisted  of  receiving  trains  from  the  road,  breaking  them  up,  and 
distributing  cars  for  freight  houses  and  other  roads,  making  up  freight 
trains  and  dispatching  them  on  the  road,  and  the  moving  of  cars  and 
trains  for  all  these  purposes.  It  is  quite  evident  that  direct  co-opera- 
tion in  particular  business  does  not  mean  the  same  thing  as  habitual 
association  in  the  performance  of  duties,  since,  if  that  were  so,  there 
would  be  no  occasion  for  stating  two  branches  of  the  rule.  Direct 
co-operation  in  a  particular  business  is  distinguished  from  indirect 
co-operation  or  co-operation  in  the  general  business  of  the  master. 
Different  persons  employed  in  this  extensive  yard  in  some  capacity, 
or  who  had  occasion  to  be  there  in  performance  of  different  or  separate 
duties,  might  be  engaged  in  doing  different  parts  of  the  same  work, 
and  promoting  the  general  business  of  the  master,  and  their  duties 
be  such  as  to  bring  them  into  habitual  association,  although  not 
directly  co-operating  in  a  particular  part  of  the  work.  The  duties  of 
the  road  crew  respecting  a  train  did  not  begin  until  the  duties  of  the 
switch  crew  making  it  up  ended,  and  the  duties  of  the  crew  on  the 
incoming  train  ceased  before  those  of  the  switch  crew  began;  and 
under  the  rule  declared  in  Chicago  &  Alton  Eailroad  Co.  v.  Hoyt, 
122  111.  369,  they  could  not  be  said,  as  a  matter  of  law,  to  be  directly 
co-operating  in  the  particular  business  in  hand.  That  question  was 
properly  submitted  to  the  jury  as  one  of  fact. 

On  the  question  whether  the  duties  of  Woodward  and  the  switch 
crew  were  such  as  to  bring  them  into  habitual  association,  so  as  to 
exercise  an  influence  over  each  other,  promotive  of  proper  caution,  the 
evidence  was  that  the  road  crew,  including  the  head  brakeman,  would 
take  the  engine,  when  uncoupled,  and  run  over  the  track  to  the  round- 
house, and  would  take  it  from  the  roundhouse  and  run  over  the  tracks 
to  couple  on  the  outgoing  train,  and  in  doing  so  they  ran  through  the 
yard  over  the  tracks  where  the  switch  crews  were  working.  It  is 
contended  by  appellant  that  this  fact  established  such  habitual  associ- 
ation between  the  two  classes  of  servants  as  would  make  them  fellow 
servants,  in  the  law.  Counsel  for  appellee  says  that  they  were  not 
fellow  servants,  because  Woodward  was  not  even  acquainted  with  the 
members  of  the  north-end  crew,  and  therefore  the  two  could  not  have 
exercised  an  influence  over  each  other  promotive  of  proper  caution. 
The  fact  of  personal  acquaintance  does  not  determine  the  relation,  but 
it  depends  upon  the  nature  of  the  duties  of  the  different  servants, 
and  the  incidents  of  the  employment.  Whenever  the  requisite  condi- 
tions are  established,  either  by  co-operation  in  a  particular  business 
then  in  hand,  or  duties  which  imply  habitual  association,  that  moment 
the  relation  commences,  and  under  the  law  the  servants  are  fellow 
servants.  Whether  they  are  fellow  servants  does  not  depend  upon  the 
accident  of  acquaintance  or  the  length  of  time  the  men  have  worked 
together.     World's  Columbian  Exposition  v.  Lehigh,  196  111.  612, 


CHAP.   XXIV.]  VICE-PRINCIPAL  DOCTEINES.  725 

63  N.  E.  1089.  Any  other  rule  would  be  vague,  indefinite,  and  im- 
practicable. It  would  be  a  question  how  long  the  servant  must  be 
employed  before  sufficient  acquaintance  would  be  established,  and  a 
sufficient  opportunity  given  for  advice,  counsel,  and  caution,  so  that 
the  servant  would  cease  to  have  a  right  of  action  against  the  employer. 
The  conclusion  might  depend  upon  friendship,  which  would  induce 
friendly  counsel  and  advice,  or  personal  enmity,  which  would  pre- 
vent or  prohibit  it.  The  fellow-servant  rule  rests  both  upon  considera- 
tions of  public  policy,  and  upon  the  rule  that  when  a  servant  enters 
the  employment  he  assumes  all  the  ordinary  risks  of  such  employment, 
including  the  negligence  of  fellow  servants  associated  with  him,  and 
both  reasons  for  the  rule  have  been  recognized  by  this  court.  He 
assumes  the  risks  as  to  all  those  whose  duties  bring  them  into  habitual 
association  with  him,  or  who  may  be  directly  co-operating  with  him 
in  some  particular  business  in  hand  at  the  time  of  an  accident.  There 
was  evidence  tending  to  prove  that  the  duties  of  the  road  crew  and 
switch  crews  while  in  the  yard  brought  them  into  habitual  associa- 
tion, but  the  evidence  was  not  of  such  a  nature  that  but  one  conclu- 
sion could  have  been  drawn  from  it,  and  therefore  the  question  was 
properly  submitted  to  the  jury.  Wliether  the  proper  conclusion  was 
drawn  from  the  facts  was  finally  settled  by  the  Appellate  Court,  and 
is  not  subject  to  review  here.  .  .  .  Judgment  affirmed.^ 


2.     Vice-Principal  Doctrines. 

NEW   OMAHA   THOMSON-HOUSTON    ELECTKIC    LIGHT 
CO.   V.   BALDWIN. 

62  Neb.  180.     1901. 

Action  by  Charles  Baldwin  against  the  New  Omaha  Thomson- 
Houston  Electric  Light  Company.  Judgment  for  plaintiff,  and 
defendant  brings  error. 

>  In  Chicago  &  A.  Ry.  Co.  v.  Swan,  176  111.  424  (1898),  the  plaintiff,  a  baggage- 
man on  one  of  defendant's  passenger  trains,  was  injured  through  the  negligence  of 
the  engineer  of  the  train.  In  sustaining  a  judgment  for  plaintiflF,  the  court,  on 
appeal,  said :  — 

"  It  is  difficult  to  see  upon  what  theory  It  can  be  held  that  a  baggageman,  as 
such,  has  any  control  over  the  movements  of  the  train  upon  which  he  is  employed, 
or  anything  to  do  with  the  running  of  the  same.  Proof  that  one  was  a  baggageman 
and  the  other  an  engineer  would,  of  itself,  justify  the  Inference  that  they  were  not 
directly  co-operating  with  each  other  in  the  business  of  running  the  train,  and  hence 
not  fellow  servants,  under  our  rule.  But  in  this  case  the  plaintiff  testified  that  his 
duties  as  baggageman  were  to  handle  baggage  and  railroad  letters,  and  anything 
of  that  kind  pertaining  to  railroad  business  in  his  car;  that  he  had  nothing  to  do 
outside  of  the  car,  and  that  the  conductor  or  engineer  had  no  control  over  him  in 
the  performance  of  his  duties ;  also  that  he  was  hired  by  the  general  baggage  agent, 
and  instructed  that  his  place  was  In  the  baggage  car ;  that  he  had  never  been 
required  to  get  out  and  perform  other  duties  for  the  trainmen,  and  that  it  was  not 


726  NEW   OMAHA,   ETC.,    E,    L,    CO,    V.   BALDWIN.       [CHAP.    XXIV. 

Hastings,  C.  As  a  large  part  of  the  discussion  in  this  case  will 
relate  to  instructions  given  and  refused,  in  which  the  plaintifiE  in  error 
is  called  "  defendant,"  and  defendant  in  error  is  called  "  plaintiff,*' 
the  parties  will  be  designated  in  the  same  manner  here  as  at  the  trial 
below. 

It  appears  that  the  plaintiff,  Baldwin,  in  September,  1896,  was 
employed  by  the  defendant  electric  light  company  as  a  lineman ;  that 
he  worked  under  the  immediate  supervision  of  a  foreman,  one  James 
Brinkman ;  and  that  he  was  directed  by  such  foreman  on  the  morning 
of  September  9,  1896,  to  remove  the  arc  lamps  on  Sixteenth  Street 
in  Omaha,  in  connection  with  another  workman,  who  is  described  as 
a  "  groundman."  Plaintiff's  duty  was  to  ascend  an  extension  ladder 
placed  against  the  sustaining  wire  of  the  lamp,  taking  with  him  a 
rope,  put  the  latter  over  the  sustaining  wire,  and  attach  it  to  the 
lamp ;  and  the  groundman  let  it  down  by  paying  out  the  rope.  They 
had  reached  the  point  on  Sixteenth  Street  opposite  the  alley  between 
Harney  and  Howard  Streets,  when  the  foreman,  Brinkman,  arrived, 
ordering  the  other  workman  to  another  service,  and  himself  engaged 
in  assisting  plaintiff  in  the  removal  of  the  lamp.  There  is  some  dis- 
crepancy in  the  testimony  as  to  the  precise  occurrence;  plaintiff's 
evidence  indicating  that  Brinkman  assisted  in  bringing  up  the  ladder 
and  adjusting  it  for  the  removal  of  this  last  lamp,  and  Brinkman 
declaring  that  he  came  up  after  the  ladder  was  adjusted,  and  while 
plaintiff  was  in  the  act  of  loosening  the  lamp  from  the  sustaining  wire. 
Each  statement  is  to  some  extent  corroborated.  Plaintiff's  evidence 
is  to  the  effect  that  he  objected  to  the  shortness  of  the  ladder,  and 
asked  that  it  be  extended  further,  which  could  have  been  easily  done, 
and  was  told  by  the  foreman  that  it  was  high  enough,  and  directed 
to  ascend ;  that  he  went  up,  carrying  a  rope,  passed  the  rope  over  the 
sustaining  wire  to  which  the  lamp  hung,  tied  it  to  the  lamp,  and 
loosened  the  lamp  from  its  fastening,  and  the  foreman,  Brinkman, 
standing  below  and  holding  the  rope,  let  it  down ;  that  when  it  reached 
the  ground  Brinkman  untied  the  rope,  but  neglected  to  keep  his 
hold  upon  it,  and  by  the  taking  off  of  the  lamp's  weight  the  wire 
to  which  it  had  hung  was  allowed  to  spring  up  past  the  end  of  the 
ladder,  and  plaintiff  and  the  ladder  were  precipitated  to  the  pave- 
ment, with  resulting  injuries  to  plaintiff.  The  groundman  had  been 
instructed  by  this  very  foreman  to  keep  hold  of  both  ends  of  the  rope 
till  the  lineman  reached  the  ground,  to  avoid  exactly  this  danger. 
The  negligence  asserted  is  that  Brinkman,  by  his  refusal  to  extend 
the  ladder,  and  directing  plaintiff  to  mount  it,  was  negligent,  and  in 
untying  the  rope  and  leaving  the  end  loose  was  again  negligent,  and 
that  such  negligence  was  the  immediate  cause  of  the  injury. 

the  custom  for  baggagemen  to  do  so.  There  was,  as  a  matter  of  fact,  no  co- 
operation between  him  and  the  engineer.  The  declaration  sustains  the  Judgment, 
and  the  evidence  supports  the  allegations  of  the  declaration." 


CHAP.   XXIV,]  VICE-PRINCIPAL  DOCTRIIfES.  727 

It  is  conceded  that  the  evidence  shows  Brinkman  to  have  been  fore- 
man. It  was  conceded  on  the  argument  that  there  is  evidence  of 
negligence  on  his  part  sufficient  to  uphold  the  verdict,  if  he  is  to  be 
deemed  throughout  the  transaction  a  vice-principal,  and  responsi- 
bility for  all  his  acts  imputed  to  his  employer.  It  is  contended  on 
the  part  of  the  defendant  that  while  Brinkman,  in  his  general  employ- 
ment, may  have  had  some  of  the  duties  of  a  vice-principal,  yet,  so 
far  as  his  connection  with  this  injury  is  concerned,  he  was  acting 
simply  as  a  fellow  servant,  and  for  any  negligence  committed  in  that 
capacity  defendant  is  not  liable,  because  plaintiff  had  assumed  all 
such  risks.  The  trial  court,  however,  adopted  the  view  (and  so  ex- 
pressly instructed  the  jury)  that  Brinkman,  being  foreman,  and  in- 
trusted with  the  control  and  management  of  the  work  in  which 
plaintiff  was  employed,  was  so  far  identified  with  the  defendant 
employer  that  his  negligence  was  defendant's  negligence.  The  giving 
of  this  instruction  is  the  chief  error  complained  of;  the  defendant 
asserting  that  it  incorrectly  states  the  law,  because  Brinkman,  in  his 
connection  with  this  accident,  was  acting  as  a  fellow  workman,  and 
because  the  question  of  whether  or  not  he  was  a  fellow  servant  is, 
at  all  events,  not  purely  a  question  of  law,  but  a  mixed  one  of  law 
and  fact,  and  should  have  been  submitted  to  the  jury,  as  was  specifi- 
cally requested  by  defendant  at  the  trial.  The  case  seems  to  turn 
upon  the  question  whether  the  court's  view  that  Brinkman  was  a 
vice-principal  throughout,  and  the  sweeping  instruction  to  that  effect, 
can  be  sustained.  In  Railroad  Co.  v.  Doyle,  50  Neb.  555,  this  is  said 
to  be  not  always  a  question  of  law,  nor  always  a  question  of  fact,  but 
generally  a  mixed  one,  and  ordinarily  no  set  rule  can  be  laid  down. 
In  this  present  case,  however,  there  seems  to  have  been  no  dispute  in 
the  testimony  as  to  Brinkman's  duties  and  authority.  The  plaintiff 
seems  to  have  been  contented  to  show  that  Brinkman  was  foreman, 
exercising  general  control  and  supervision  over  the  work  for  which 
the  plaintiff  was  employed  as  lineman.  Defendant  admits  he  was 
foreman,  and  shows  clearly  by  its  evidence  that  he  had  authority  to 
"  superintend,  direct,  and  control "  the  work.  It  appears  that  he 
employed  and  discharged  men,  but  usually  on  consultation  with  the 
manager.  No  statement  of  either  party  as  to  what  his  powers  and 
duties  were  seems  to  be  contradicted,  even  inferentially,  by  the  other. 
Under  such  circumstances,  it  seems  clear  that  it  was  the  duty  of  the 
court  to  say  whether  the  evidence  made  of  Brinkman  a  vice-principal 
or  a  mere  fellow  servant.  This  responsibility  the  court  took,  and 
declared  in  the  eighth  instruction  that  he  was  not  a  fellow  servant, 
and  that  defendant  was  chargeable  with  any  negligence  of  his.  Was 
this  error? 

Counsel  say  that  to  review  all  the  cases  on  this  question  would  be 
a  useless  and  almost  superhuman  task.  "We  shall  not  attempt  it  any 
more  than  they  have.    Judge  Dillon,  in  his  widely  influential  article 


728  NEW   OMAHA^   ETC.^    E.    L.    CO.    V.   BALDWIN.       [CHAP.    XXIV. 

in  34  Am.  Law  Rev.  175,  says  that  a  commanding  position  and  a 
telescope,  and  not  a  microscope,  are  what  are  needed  to  reach  a 
correct  rule  in  this  matter.  For  our  part,  we  would  gladly  use  both, 
if  they  would  lead  to  our  better  enlightenment.  We  think,  however, 
that  where  the  courts  are  widely  disagreeing,  and  the  same  courts 
changing  views  from  time  to  time,  and  legislatures  frequently  altering 
the  rule,  the  safe  course  for  us  is  to  learn  what  our  state  has  done, 
and  follow  it,  if  we  can. 

An  examination  of  our  own  cases  seems  to  justify  the  trial  court. 
There  are  widely-different  views  as  to  what  renders  an  employee  such 
a  vice-principal  as  to  take  his  acts  out  of  the  rule  that  an  employee 
assumes  the  risk  from  negligence  of  his  co-employees.  The  English 
cases  seem  to  hold  that  there  is  practically  no  such  doctrine  of  vice- 
principalship ;  that  there  are  absolute  duties  resting  upon  the  master, 
whose  nonperformance  either  by  himself  or  by  some  one  else  will 
render  him  liable.  They  are  apparently  a  duty  of  providing  reason- 
ably safe  materials  and  appliances,  which  is  a  continuing  duty,  involv- 
ing reasonably  frequent  inspections;  the  duty  of  providing  a 
reasonably  safe  place  to  work;  and  the  duty  of  giving  or  providing 
for  reasonable  instructions  to  inexperienced  employees  placed  in 
dangerous  positions.  These  duties  being  discharged,  any  injury  that 
arises,  in  operation  of  the  work,  out  of  negligence  of  employees,  im- 
poses no  liability  upon  the  master.  The  English  rule  has  been  adopted 
in  many  of  the  states,  with  the  proviso  that,  where  the  performance 
of  any  of  these  absolute  duties  is  delegated  to  third  parties,  those 
parties  become  as  to  these  duties  vice-principals,  and  their  negligence 
in  respect  to  such  duties  is  the  negligence  of  the  principal.  Of  this 
view  of  the  principal's  liability  the  courts  of  Massachusetts  have  been 
strong  exponents,  manifestly  under  the  influence  of  Chief-Justice 
Shaw  in  Farwell  v.  Railroad  Co.,  4  Mete.  49,  and  the  English  deci- 
sions. The  courts  of  Ohio,  however,  early  adopted  a  different  view, 
deriving  the  liability  for  the  acts  of  a  vice-principal  not  from  the 
fact  of  absolute  duties  devolving  upon  him,  but  from  the  fact  that 
he  was  given  authority  and  control,  and  must  be  held  in  his  actions 
to  immediately  represent  the  employer,  and  his  negligence  to  be  im- 
puted to  his  principal.  Railroad  Co.  v.  Stevens,  20  Ohio,  416 ;  Rail- 
road Co.  V.  Keary,  3  Ohio  St.  201 ;  Whaalan  v.  Railroad  Co.,  8  Ohio 
St.  251 ;  Stone  Co.  v.  Kraft,  31  Ohio  St.  287.  This  doctrine  was,  in 
the  case  of  Railway  Co.  v.  Lundstrom,  16  Neb.  254,  expressly  adopted 
in  this  state.  In  that  case  the  railroad  company  was  held  liable  for 
the  negligence  of  one  Carnes,  the  conductor  of  a  construction  train,  in 
sending  his  men  into  a  cut  to  clear  away  snow  without  maintaining 
a  suitable  watch,  or  giving  any  signal  of  an  approaching  train.  For 
his  negligence  in  that  respect,  resulting  in  injury  to  plaintiff's 
intestate,  the  railroad  company  was  held  liable.  This  holding  has 
been  uniformly  adhered  to.     [  After  discussing  Railroad  Co.  v.  Crockett, 


CHAP.   XXIV.]  VICE-PRINCIPAL   DOCTRINES.  729 

19  2s^eb.  138;  Eailroad  Co.  v.  Smith,  22  Neb.  775;  Eailroad  Co.  v. 
Sullivan,  27  Neb.  673;  Ice  Co.  v.  Sherlock,  37  Neb.  19;  Hammond 
V.  Johnson,  38  Neb.  244;  Railroad  Co.  v.  Doyle,  50  Neb.  555;  and 
Clark  V.  Hughes,  51  Neb.  780,  the  court  continues :]  From  the  fore- 
going cases  it  seems  clear  that,  whatever  may  be  the  rule  elsewhere, 
in  this  court  the  liability  of  the  employer  for  the  actions  of  a  vice- 
principal  grows  out  of  the  fact  that  he  is  directly  intrusted  with 
authority,  that  the  movements  of  those  under  him  are  directed  by  him, 
and  that  he  is  held  to  be  the  direct  representative  of  his  principal. 
If  in  Clark  v.  Hughes  the  mere  admission  of  the  fact  that  the  party 
in  fault  was  conductor  was  suflBcient  to  do  away  with  all  proof  that 
he  was  a  vice-principal,  it  would  seem  in  this  case  that  the  same  effect 
should  be  given  to  the  admission  that  the  party  in  fault  was  foreman, 
and  to  the  uncontradicted  evidence  of  his  authority,  and  that  the 
court  was  warranted  in  instructing  that  he  was  also  a  vice-principal. 
If  this  is  conceded,  we  are  of  the  opinion  that  all  the  other  claims  of 
error  in  this  case  fall  to  the  ground  with  this  one.  Of  course,  if  the 
learned  trial  judge  was  warranted  in  instructing  that  this  foreman 
was  a  vice-principal,  he  was  warranted  in  rejecting  all  instructions 
drawn  from  the  point  of  view  of  his  being  anything  else.  .  .  . 

The  third  claim  of  error  is  in  instructions  13  and  14,  endeavoring 
to  apply  to  this  case  the  rule  that  contributory  negligence  would  not 
prevent  recovery  if  reasonable  care  on  the  part  of  defendant  would, 
after  the  discovery  of  such  negligence  of  plaintiff,  have  prevented  its 
consequences.  These  two  instructions  were  apparently  intended  to 
inform  the  jury  that,  if  they  found  plaintiff  negligent  in  going  up 
an  insufficiently  extended  ladder,  still,  if  Brinkman  loosened  the  rope 
after  plaintiff  was  up,  and  Brinkman  knew  it,  and  such  act  of  Brink- 
man  caused  the  injury,  plaintiff  could  recover,  if  at  that  moment 
exercising  due  care.  This  was  correct  if  we  find  the  act  of  Brinkman 
in  taking  off  the  lamp  and  loosening  the  rope  the  act  of  the  employer. 
It  was  not  correct  if  we  allow  Brinkman  a  dual  capacity,  —  a  vice- 
principal  when  giving  directions,  and  a  mere  fellow  workman  when 
taking  off  the  lamp.  There  are  many  authorities  for  such  a  distinc- 
tion, and  for  a  dual  capacity  of  vice-principal  and  workman  on  the 
part  of  one  who  both  directs  and  assists.  A  notable  recent  case  is 
Bamicle  v.  Connor  (Iowa),  81  N.  W.  452.  Crispin  v.  Babbitt,  81 
N.  Y.  516,  is  another.  Generally  they  will  be  found  to  be  rendered 
by  courts  which  adopt  the  restricted  rule  that  vice-principalship 
depends  upon  the  delegation  of  absolute  duties.  It  is  a  doctrine  that 
is  evidently  not  compatible  with  the  decisions  in  Railroad  Co.  v. 
Smith,  Ice  Co.  v.  Sherlock,  Railroad  Co.  v.  Crockett,  and  Railway  Co. 
V.  Lundstrom.  In  each  of  these  cases  the  defendant  employer  was 
held  liable  for  imputed  negligence  on  the  part  of  one  to  whom  super- 
vision and  direction  were  intrusted  in  respect  to  other  matters  than  the 
mere  giving  of  such  directions.    In  this  state  it  is  clear  that  the  vice- 


730  NEW    OMAHA,   ETC.,    E.    L.    CO.    V.    BALDWIN.       [CHAP.    XXIV. 

principal's  character  as  such  comes  from  his  authority  and  his  direct 
representation  of  his  master.  If  that  is  the  source  of  liability  for  his 
acts,  evidently  he  represents  the  master  as  much  in  ordering  away  the 
cautious  and  instructed  lineman  and  assuming  his  place  as  in  any- 
thing else.  We  cannot  distinguish  this  case  from  Ice  Co.  v.  Sherlock, 
supra,  where  the  injury  came  from  the  foreman's  letting  down  a 
second  piece  of  ice  while  the  workman  was  in  the  chute  loosening  the 
lodged  one;  nor  from  Stone  Co.  v.  Kraft,  31  Ohio  St.  287,  where  the 
foreman's  attaching  the  hard-stone  grapple  to  the  soft  stone  permitted 
the  latter  to  slip  and  harmed  the  fellow  workman. 

What  has  just  been  said  also  disposes  of  the  claim  of  contributor}- 
negligence.  There  are  many  cases  holding  that  one  who  obeys  the 
command  of  a  superior,  not  evidently  endangering  life  or  limb,  is  not 
necessarily  guilty  of  contributory  negligence  because  the  one  issuing 
the  command  is.  But  plaintiff,  if  chargeable  with  contributory  negli- 
gence in  going  up  an  insufficiently  extended  ladder,  is  not  chargeable 
with  helping  to  let  loose  the  rope.  If  this  was  the  act  of  a  vice-prin- 
cipal, the  question  of  contributory  negligence  should  have  gone,  as  it 
did,  to  the  jury.  We  are  thus  again  brought  back  to  the  fact  that  the 
instructions,  in  effect,  tell  the  jury  that  the  act  of  loosening  the  rope, 
if  under  all  the  circumstances  they  find  it  negligent,  was  imputable  to 
the  employer.  The  federal  courts  hold  that  this  question  of  vice- 
principalship  is  a  matter  of  general  law,  as  to  which  they  are  not 
bound  by  state  decisions.  Hunt  v.  Hurd,  39  C.  C.  A.  226,  98  Fed. 
683.  It  is  therefore  a  matter  of  much  regret  that  we  should  be  com- 
pelled to  recognize  that  in  the  federal  courts,  since  the  express  overrul- 
ing of  Eailroad  Co.  v.  Ross,  112  U.  S.  377,  in  Railroad  Co.  v.  Conroy, 
175  U.  S.  323,  an  opposite  conclusion  to  ours  would  be  reached.  In 
the  case  of  Mining  Co.  v.  Whelan,  168  TJ.  S.  86,  judgment  for  a  miner 
who  had  been  set  to  work,  breaking  ore  at  the  head  of  a  chute,  by  the 
mine  foreman,  and  injured  through  the  drawing,  by  order  of  the  same 
foreman,  of  the  gate  of  the  chute,  without  the  customary  warning, 
was  reversed,  and  the  case  dismissed,  because  the  injury  was  due  to 
the  negligence  of  the  foreman,  and  he  was  held  to  be  a  fellow  servant. 
The  uncertainties  of  law  are  great  enough,  without  having  one  rule 
avowed  and  upheld  in  our  United  States  courts,  and  another  one  here 
in  the  state  capitol.  We  do  not,  however,  in  view  of  the  legislative 
provisions  which  have  so  often  followed  the  adoption  of  English  rules 
in  this  matter,  think  it  desirable  to  change  the  rule  of  this  state,  which 
is  as  stated  by  Mr.  McKinney  in  his  Law  of  Fellow  Servants  (ed. 
1890,  p.  136)  :  "  The  Ohio  cases  are  followed  in  this  state,  and  the 
limitation,  therefore,  prevails  to  its  fullest  extent."  The  liability 
established  in  this  case  by  the  instructions,  and  the  verdict  imder 
them,  seem  precisely  what  was  intended  to  be  fixed  by  §  2  of  the 
English  Employers'  Liability  Act.  The  Massachusetts  act  of  1893 
seems  to  have  intended  a  similar  effect.    Both  seem  to  have  been,  in  a 


CHAP.   XXIV.]  VICE-PRINCIPAL  DOCTRINES.  731 

measure,  defeated  in  their  results  by  unfriendly  action  of  the  courts. 
But.  while  the  current  of  legislation  is  steadily  towards  the  position 
heretofore  held  by  this  court,  there  seems  small  reason  to  change  it 
in  the  opposite  direction.  It  is  to  be  said,  too,  that  the  federal  deci- 
sions are  much  weakened  by  the  fact  that  they  are  obliged  to  admit 
that  there  is  a  degree  of  authority  that  makes  the  employee  an  alter 
ego  for  his  principal ;  but  they  have  set  up  no  limiting  principle  to 
determine  when  this  is  and  is  not  the  case.  Our  court  has  said  the 
satisfactory  evidence  of  vice-principalship  is  his  "  supervision,  con- 
trol," and  "  subjection  to  liis  orders  and  directions."  Railroad  Co.  v. 
Doyle,  50  Neb.  555.  For  these  reasons  it  is  recommended  that  the 
judgment  below  should  be  affirmed. 

Day  and  Kiekpatrick,  CC,  concur. 

Per  curiam.  For  the  reasons  stated  in  the  foregoing  opinion,  the 
judgment  of  the  district  court  is  affirmed. 


CRISPIN    V.   BABBITT. 

81  N.  Y.  516.     1880. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme  Court, 
in  the  Fourth  Judicial  Department,  affirming  a  ju.^gment  in  favor  of 
plaintiff,  entered  upon  a  verdict,  and  affirming  an  order  denying  a 
motion  for  a  new  trial. 

This  action  was  brought  to  recover  damages  for  injuries  alleged 
to  have  been  sustained  by  defendant's  negligence. 

At  the  time  of  the  accident,  plaintiff  was  working  as  a  laborer  in 
the  iron  works  of  the  defendant,  at  Whitesboro,   Oneida   County. 
Plaintiff  had  assisted  to  draw  a  boat  into  a  dry  dock  connected  with 
the  works ;  after  the  boat  was  in  the  dry  dock,  it  became  necessary  to 
pump  out  the  water;  this  was  done  by  means  of  a  pump  worked  by 
an  engine.    While  plaintiff,  with  others,  was  engaged  in  lifting  the 
flywheel  of  the  engine  off  its  centre,  one  John  L.  Babbitt  carelessly 
let  the  steam  on  and  started  the  wheel,  throwing  the  plaintiff  on  the 
gearing  wheels,  and  thus  occasioning  the  injuries  complained  of.  | 
Defendant  lived  in  the  city  of  New  York,  coming  about  once  a  month,  | 
for  a  day  or  two,  to  the  iron  works,  of  which,  as  the  evidence  tended 
to  show,  said  Babbitt  had  general  charge,  being  at  one  time  the  gen-  i 
eral  superintendent  and  manager,  at  another  time  styled  the  "  busi- 
ness and  financial  man." 

Rapallo,  J.  The  liability  of  a  master  to  his  servant  for  injuries 
sustained  while  in  his  employ,  by  the  wrongful  or  negligent  act  of 
another  employee  of  the  same  master,  does  not  depend  upon  the  doo 
trine  of  respondeat  superior. 


732  CRISPIN   V.   BABBITT.  [CHAP.   XXIV. 

If  the  employee  whose  negligence  causes  the  injury  is  a  fellow 
servant  of  the  one  injured,  the  doctrine  does  not  apply.  Conway 
V.  Belfast,  etc.,  Ey.  Co.,  11  Irish  C.  L.  353. 

A  servant  assumes  all  risk  of  injuries  incident  to  and  occurring  in 
the  course  of  his  employment,  except  such  as  are  the  result  of  the 
act  of  the  master  himself,  or  of  a  breach  by  the  master  of  some  term, 
either  express  or  implied,  of  the  contract  of  service,  or  of  the  duty  of 
the  master  to  his  servant,  viz. :  to  employ  competent  fellow  servants, 
safe  machinery,  etc.  But  for  the  mere  negligence  of  one  employee, 
the  master  is  not  responsible  to  another  engaged  in  the  same  general 
service. 

The  liability  of  the  master  does  not  depend  upon  the  grade  or  rank, 
of  the  employee  whose  negligence  causes  the  injury.  A  superintendent 
of  a  factor}^  although  having  power  to  employ  men,  or  represent  the 
master  in  other  respects,  is,  in  the  management  of  the  machinery,  a 
fellow  servant  of  the  other  operatives,  Albro  v.  Agawam  Canal  Co., 
6  Cush.  75;  Conway  v.  Belfast  Ry.  Co.,  supra;  Wood's  Master  and 
Servant,  §  438.  See,  also,  §§  431,  436,  437.  On  the  same  principle, 
however  low  the  grade  or  rank  of  the  employee,  the  master  is  liable 
for  injuries  caused  by  him  to  another  servant,  if  they  result  from  the 
omission  of  some  duty  of  the  master,  which  he  has  confided  to  such 
inferior  employee.  On  this  principle  the  Flike  Case,  53  N.  Y.  549, 
was  decided.  Church,  Ch.  J.,  says,  at  page  553 :  "  The  true  rule^  I 
apprehend,  is  to  hold  the  corporation  liable  for  negligence  in  respect 
to  such  acts  and  duties  as  it  is  required  to  perform  as  master,  without 
regard  to  the  rank  or  title  of  the  agent  intrusted  with  their  perform- 
ance. As  to  such  acts  the  agent  occupies  the  place  of  the  corporation, 
and  the  latter  is  liable  for  the  manner  in  which  they  are  performed." 

The  liability  of  the  master  is  thus  made  to  depend  upon  the  charac- 
ter of  the  act  in  the  performance  of  which  the  injury  arises,  without 
regard  to  the  rank  of  the  employee  performing  it.  If  it  is  one  pertain- 
ing to  the  duty  the  master  owes  to  his  servants,  he  is  responsible  to 
them  for  the  manner  of  its  performance.  The  converse  of  the  propo- 
sition necessarily  follows.  If  the  act  is  one  which  pertains  only  to  the 
duty  of  an  operative,  the  employee  performing  it  is  a  mere  servant, 
and  the  master,  although  liable  to  strangers,  is  not  liable  to  a  fellow 
servant  for  its  improper  performance.  Wood's  Master  and  Servant, 
§  438.  The  citation  which  the  court  read  to  the  jury  from  21  Am. 
Rep.  2,  does  not  conflict  with,  but  sustains  this  proposition ;  it  says : 
"  Where  the  master  places  the  entire  charge  of  his  business  in  the 
hands  of  an  agent,  the  neglect  of  the  agent  in  supplying  and  maintain- 
ing suitable  instrumentalities  for  the  worJc  required  is  a  breach  of  duty 
for  which  the  master  is  liable."  These  were  masters'  duties.  In  so 
far  as  the  case  from  which  the  citation  is  made  goes  beyond  this,  I 
cannot  reconcile  it  with  established  principles.  In  England,  by  a 
late  act  of  Parliament,  the  rules  touching  the  point  now  under  con- 


CHAP.    XXIV.]  VICE-PEINCIPAL   DOCTRINES.  733 

sideration  have  been  modified  in  some  respects,  but  in  this  state  no 
6uch  legislation  has  been  had. 

The  point  is  sharply  presented  in  the  present  case,  by  the  13th,  14th, 
and  17th  requests  to  charge.  13th.  That  although  John  L.  Babbitt 
may,  as  financial  agent  or  superintendent,  overseer,  or  manager,  have 
represented  defendant,  and  stood  in  his  place,  he  did  so  only  in  respect 
of  those  duties  which  the  defendant  had  confided  to  him  as  such  agent, 
superintendent,  overseer,  or  manager. 

This  the  court  charged. 

14th.  That  as  to  any  other  acts  or  duties  performed  by  him  in  and 
about  the  defendant's  works  or  business  at  said  works,  he  is  not  to 
be  regarded  as  defendant's  representative,  standing  in  his  place,  but 
as  an  employee  or  servant  of  the  defendant,  and  a  fellow  servant  of 
the  plaintiff. 

This  the  court  refused  to  charge,  but  left  as  a  question  of  fact  to  the 
jur}',  and  defendant's  counsel  excepted.  I  think  this  was  a  question  of 
law,  and  that  the  court  erred  in  submitting  it  to  the  jury,  but  should 
have  charged  as  requested. 

The  court  was  further  specifically  requested  to  charge  that  in  letting 
on  the  steam  John  L.  Babbitt  was  not  acting  in  defendant's  place. 
This,  I  think,  was  a  sound  proposition,  as  applied  to  the  present  case. 
It  was  the  act  of  a  mere  operative  for  which  the  defendant  would  be 
liable  to  a  stranger,  but  not  to  a  fellow  servant  of  the  negligent  em- 
ployee. As  between  master  and  servant,  it  was  servant's  and  not 
master's  duty  to  operate  the  machinery. 

The  judgment  should  be  reversed. 


MAST   V.   KERN". 
34  Or.  247.     1898. 

This  action  is  brought  to  recover  damages  for  an  injury  alleged  to 
have  been  sustained  through  defendant's  negligence.  At  the  time  of 
the  accident  which  caused  his  injury,  the  plaintiff  was,  and  for  some 
months  prior  thereto  had  been,  working  for  the  defendant  in  a  stone 
quarry  at  Coos  Bay,  engaged  with  other  employees  in  excavating  and 
removing  rock  by  blasting,  under  the  direction  and  supervision  of  one 
West,  who  was  the  superintendent  and  manager,  with  power  to  hire 
and  discharge  employees.  On  the  day  of  the  accident  the  plaintiff 
and  a  fellow  workman  had  drilled  a  hole  in  the  rock,  preparatory  to 
putting  in  a  blast ;  but,  before  loading  it,  the  superintendent  dropped 
in  the  hole  two  or  three  sticks  of  giant  powder,  which  he  caused  to  be 
exploded  for  the  purpose  of  drying  it  out.  After  waiting  a  few  min- 
utes for  any  fire  which  the  powder  might  leave  in  the  hole  to  expire, 
West  inquired  of  plaintiff  whether  he  thought  it  was  ready  to  load, 


734  MAST   V.    KERN.  [CHAP.   XXTV. 

and  the  plaintiff  replied,  "  I  don't  know  whether  it  is  or  not."  West 
then  said,  "  1  guess  it  is  all  right ;  we  will  try  it,"  and  poured  some 
powder  into  the  hole;  and,  as  it  did  not  take  fire,  he  said  he  thought 
it  was  safe,  and  directed  the  plaintiff  and  his  fellow  workman  to  put 
in  the  black  powder;  and  while  they  were  engaged  in  doing  so  an 
explosion  occurred,  by  which  plaintiff  received  the  injury  for  which 
he  brings  this  action.  The  ground  of  recovery  alleged  in  the  com- 
plaint is  that  West  was  negligent  in  not  waiting  a  sufficient  length  of 
time  for  the  hole  to  cool  after  the  giant  powder  had  been  exploded 
therein,  and  in  not  ascertaining  whether  there  was  any  fire  remaining 
in  the  hole,  before  directing  the  plaintiff  and  his  fellow  workman  to 
put  the  black  powder  in.  The  court  below  directed  a  nonsuit,  and 
plaintiff  appeals. 

Bean,  J.  (after  stating  the  facts).  The  motion  for  nonsuit  was,  it 
is  stated  in  the  briefs,  allowed  on  the  ground  that  when  the  plaintiff, 
with  full  knowledge  of  the  situation,  without  protest  or  objection, 
undertook  to  load  the  hole  as  directed  by  West,  he  knowingly  and 
voluntarily  assumed  the  risks  of  a  premature  explosion;  and  we  are 
not  prepared  to  say  at  this  time  that  the  court  was  in  error  in  so 
ruling.  Brown  v.  Lumber  Co.,  24  Or.  315.  But,  however  that  may 
be,  the  judgment  of  nonsuit  must  be  sustained  for  the  reason  that  the 
negligence  of  West,  if  any,  was,  under  the  circumstances,  the  negli- 
gence of  a  co-servant,  for  which  the  defendant  is  not  liable.  It  is 
familiar  law  that  a  servant  assumes,  as  one  of  the  incidents  of  his 
employment,  all  risks  of  injury  from  the  negligence  of  a  fellow 
servant,  because  the  master  cannot,  by  the  exercise  of  the  utmost 
care  and  caution,  guard  against  such  negligence.  But  the  courts 
differ  somewhat  as  to  who  is  a  fellow  servant  within  the  meaning  of 
this  rule.  There  are  practically  two  lines  of  decisions  upon  the 
question.  On  the  one  hand  it  is  held,  adopting  the  superior  ser- 
vant criterion,  that  when  the  master  has  given  to  an  employee  super- 
visory control  and  management  of  his  business,  or  some  particular 
department  thereof,  such  person,  while  so  acting,  stands  in  the 
place  of  the  master,  as  to  those  under  his  direction  and  supervision, 
and  for  his  negligence  the  master  is  liable.  This  is  known  in  the 
books  as  the  "  Ohio  doctrine,"  and  was  adopted  in  effect  by  the 
Supreme  Court  of  the  United  States  in  Kailway  Co.  v.  Ross,  112  U.  S. 
377 ;  but  that  case  has  been  very  much  modified,  if  not  in  effect  prac- 
tically overruled,  by  the  subsequent  case  of  Railroad  Co.  v.  Baugh,  149 
U.  S.  368.^  Under  this  rule  the  liability  of  the  master  is  made  to 
depend  upon  the  rank  or  grade  of  the  person  whose  negligence  caused 
the  injury.  On  the  other  hand,  the  rule,  and  the  one  now  unquestion- 
ably established  and  supported  by  the  great  weight  of  authority  both 
in  this  country  and  in  England,  is  that  the  liability  of  the  master 

*  The  Boss  case  was  finally  squarely  OTermled  In  New  Eng.  R.  R.  Co.  v.  Conroy, 
175  U.  S.  323. 


CHAP.   XXIV.]  VICE-PEINCIPAL   DOCTRINES.  735 

depends  upon  the  character  of  the  act  in  the  performance  of  which 
the  injury  arises,  and  not  the  grade  or  rank  of  the  negligent  employee. 
If  the  act  is  one  pertaining  to  the  duty  the  master  owes  to  his  servant, 
he  is  responsible  for  the  manner  of  its  performance,  without  regard 
to  the  rank  of  the  servant  or  employee  to  whom  it  is  intrusted ;  but, 
if  it  is  one  pertaining  only  to  the  duty  of  an  operative,  the  employee 
performing  it  is  a  fellow  servant  with  his  co-laborers,  whatever  his 
rank,  for  whose  negligence  the  master  is  not  liable.  McKinney,  Fel. 
Serv.  §  43  et  seq. ;  Bailey,  Mast.  Liab.  226  et  seq. ;  Wood,  Mast.  &  S. 
§  438;  24  Am.  Law  Rev.  175;  25  Am.  Law  Keg.  481;  Crispin  v. 
Babbitt,  81  N.  Y.  516;  McCosker  v.  Railroad  Co.,  84  N.  Y.  77; 
Hussey  v.  Coger,  112  N.  Y.  614;  Brown  v.  Railroad  Co.,  27  Minn. 
162 ;  Ell  V.  Railroad  Co.,  1  N.  D.  336 ;  Sayward  v.  Carlson,  1  Wash. 
St.  29.  Many  other  authorities  could  be  cited  to  the  same  effect,  but 
these  are  sufficient  to  show  the  irresistible  current  of  the  decisions,  as 
well  as  the  ground  upon  which  the  doctrine  rests,  and  its  application 
to  given  facts. 

And  so  is  the  logical  result  of  the  former  decisions  of  this  court,  as 
the  liability  of  the  master  for  an  injury  to  a  servant,  caused  by  the 
negligence  of  another  employee,  has  always  been  made  to  depend  upon 
the  character  of  the  act  causing  the  injury,  rather  than  the  grade  or 
rank  of  the  offending  employee.  Anderson  v.  Bennett,  16  Or.  515; 
Hartvig  v.  Lumber  Co.,  19  Or.  522 ;  Miller  v.  Southern  Pac.  Co.,  20 
Or.  285;  Carlson  v.  Railway  Co.,  21  Or.  450;  Fisher  v.  Railway  Co., 
82  Or.  533.  It  is  the  personal  and  absolute  duty  of  the  master  to 
exercise  reasonable  care  and  caution  to  provide  his  servants  with  a 
reasonably  safe  place  to  work,  reasonably  safe  tools,  appliances,  and 
instruments  to  work  with,  reasonably  safe  material  to  work  upon, 
suitable  and  competent  fellow  servants  to  work  with  them,  and  to 
make  needful  rules  and  regulations  for  the  safe  conduct  of  the  work ; 
and  he  cannot  delegate  this  duty  to  a  servant  of  any  grade  so  as  to 
exempt  himself  from  liability  to  a  servant  who  has  been  injured  by  its 
nonperformance.  Whoever  he  intrusts  with  its  performance,  whatever 
his  grade  or  rank,  stands  in  place  of  the  master,  and  he  is  liable  for 
the  negligence  of  such  employee  to  the  same  extent  as  if  he  had  him- 
'self  performed  the  act,  or  been  guilty  of  the  negligence.  But  when 
the  master  has  performed  his  duty  in  this  regard,  and  provided  com- 
petent employees,  a  reasonably  safe  place  to  work,  suitable  materials, 
tools,  and  appliances  to  work  with,  and  needful  rules  and  regu- 
lations, and  the  like,  he  has  discharged  his  whole  duty  in  the  prem- 
ises, and  is  not  liable  to  a  servant  for  the  negligence  of  another 
servant  while  engaged  as  an  operative.  It  is  true  that  from  this 
doctrine  results  the  conclusion  that  an  employee  may  in  certain 
cases  occupy  a  dual  position  to  his  fellow  workmen.  He  may  be 
a  vice-principal  or  the  representative  of  the  master  as  to  all  matters 
where  he  is  intrusted  with  the  discharge  of  duties  which  the  master 


736  MAST   V.    KERN.  [CHAP.   XXIV. 

himself  is  required  to  perform,  and  a  co-servant  in  the  discharge  of 
duties  not  personal  to  the  master.  But  this  conclusion  is  a  logical 
one,  and  has  been  recognized  and  applied  under  many  varieties  of 
facts.    See  McKinney,  Fel.  Serv.  note  to  section  42. 

The  true  test  in  all  cases  by  which  it  may  be  determined  whether 
the  negligent  act  causing  the  injury  is  chargeable  to  the  master,  or 
is  the  act  of  a  co-servant,  is,  was  the  offending  employee  in  the  per- 
formance of  the  master's  duty,  or  charged  therewith,  in  reference  to 
the  particular  act  causing  the  injury?  If  he  was,  his  negligence  is 
that  of  the  master,  and  the  liability  follows;  if  not,  he  was  a  mere 
co-servant,  engaged  in  a  common  employment  with  the  injured  ser- 
vant, without  reference  to  his  grade  or  rank,  or  his  right  to  employ 
or  discharge  men,  or  to  his  control  over  them.  In  short,  the  master 
is  liable  for  the  negligence  of  an  employee  who  represents  him  in  the 
discharge  of  his  personal  duties  towards  his  servants.  Beyond  this  he 
is  liable  only  for  his  own  personal  negligence.  "  This,"  as  said  by 
Judge  Dillon,  "  is  a  plain,  sound,  safe,  and  practical  line  of  distinc- 
tion. We  know  where  to  find  it,  and  how  to  define  it.  It  begins  and 
ends  with  the  personal  duties  of  the  master.  Any  attempt  to  refine 
based  upon  the  notion  of  '  grades '  in  the  service,  or,  what  is  much 
the  same  thing,  distinct  '  departments '  in  the  service  (which  depart- 
ments frequently  exist  only  in  the  imagination  of  the  judges,  and 
not  in  fact),  will  only  breed  the  confusion  of  the  Ohio  and  Kentucky 
experiments,  whose  courts  have  constructed  a  labyrinth  in  which  the 
judges  who  made  it  seem  to  be  able  to  '  find  no  end  in  wandering 
mazes  lost.'  "  24  Am.  Law  Eev.  189.  Now,  under  this  rule  it  is  clear 
that  defendant  is  not  liable  for  the  act  of  West  in  directing  the  plain- 
tiff to  load  the  hole,  even  if  it  was  neglect;  for  he  was  not  then  en- 
gaged in  the  discharge  of  any  duty  which  the  master  owed  to  the 
plaintiff,  but  was  a  fellow  servant,  the  risk  of  whose  negligence  was 
assumed  by  the  plaintiff  when  he  entered  upon  the  employment. 
There  is  no  pretence  that  West  was  not  a  fit  and  competent  person  to 
have  charge  of  the  work,  or  that  the  master  was  negligent  in  employ- 
ing him,  but  the  sole  ground  of  liability  alleged  is  the  negligence  of 
West  in  a  matter  not  pertaining  to  any  duty  the  defendant  owed  to 
the  plaintiff.  It  follows  from  these  views  that  the  judgment  of  the 
court  below  must  be  affirmed,  and  it  is  so  ordered.^ 

•■  For  an  excellent  dlscassion  of  the  various  fellow-servant  tests,  see  Jackson  v. 
Norfolk  and  W.  B.  Co.,  43  W.  Va.  380. 


CHAP.  XXV.]  THE  NON-ASSIGNABLE  DUTIES.  737 


CHAPTER   XXV. 
Liability  of  Master  to  Seevant  fob  his  own  Tobts. 

1.  The  N on- Assignable  Duties. 

FLIKE  V.  THE  BOSTON  AND  ALBANY  RAILROAD 
COMPANY. 

53  N.  Y.  549.     1873. 

Appeal  from  order  of  the  General  Term  of  the  Supreme  Court  in 
the  Third  Judicial  Department,  denying  a  motion  for  a  new  trial  and 
ordering  judgment  for  plaintiff  on  a  verdict. 

Church,  Ch.  J.  The  plaintifiPs  intestate  was  a  fireman  upon  a 
freight  train  upon  defendant's  road,  which  left  Albany  at  an  early 
hour  on  a  cold  day.  Some  miles  east  of  Albany  eleven  cars  of  another 
freight  train,  a  short  distance  in  advance,  became  accidentally  de- 
tached and  ran  back  and  collided  with  the  train  on  which  the  deceased 
was  employed,  by  means  of  which  he  was  killed.  The  evidence  tended 
to  show  that  the  forward  train  was  deficient  in  brakemen;  that  but 
two  were  aboard,  when  there  should  have  been  three,  which  was  the 
usual  number ;  and  that  if  a  third  brakeman  had  been  there  he  would 
have  been  stationed  upon  the  eleven  runaway  cars,  and  with  the  brake- 
man  on  them  could  have  controlled  their  impetus  and  prevented  the 
accident.  The  company  had  at  Albany  an  agent,  called  a  head  con- 
ductor, whose  business  it  was  to  make  up  the  morning  trains,  hire  and 
station  the  brakemen,  and  generally  to  prepare  and  dispatch  these 
trains. 

The  general  rule  that  the  employer  is  not  liable  to  one  servant  or 
laborer  for  an  injury  resulting  from  the  carelessness  or  negligence  of 
another  servant  or  co-laborer,  has  been  recently  so  fully  considered  by 
this  court  in  the  two  cases  of  Laning  v.  N.  Y.  C.  R.  R.  Co.,  49  N.  Y. 
521,  and  Brickner  v.  The  Same,  49  Id.  672,  that  discussion  is  unnec- 
essary except  as  far  as  may  be  pertinent  to  determine  its  application 
to  the  facts  of  this  case.  This  doctrine  was  first  promulgated  in  Eng- 
land in  1837  (3  M.  &  W.  1),  in  South  Carolina  in  1841  (1  McMuUan, 
385),  and  in  Massachusetts  in  1842  (4  Met.  49),  and  has  been  adopted 
in  this  and  most  of  the  other  states  in  the  Union.  There  has  been  a 
diversity  of  reasons  given  for  its  adoption,  which  have  led  to  some 
confusion  in  its  application.    The  reasons  for  the  rule  are  well  stated 

47 


738  FLIKE   V.   THE   B.    &   A.    E.    R.    CO.  [CHAP.    XXV. 

by  Pratt,  J.,  in  the  first  case  in  which  it  was  applied  in  this  state  (6 
Barb.  231),  and  were  in  substance  that  the  rule  respondeat  superior 
does  not  itself  spring  directly  from  principles  of  natural  justice  and 
equity,  but  has  been  established  upon  principles  of  expediency  and 
public  policy  for  the  protection  of  the  community;  and  that,  in  view 
of  the  unjust  consequences  which  may  ensue  from  its  application  for 
injuries  by  co-servants,  the  same  principles  of  public  policy  demand 
its  limitation,  and  that  while  the  general  rule  was  demanded  for  the 
protection  of  the  community,  the  exception  is  demanded  for  the  pro- 
tection of  the  employer,  especially  in  view  of  the  manner  in  which  the 
principal  business  of  the  country  is  now  transacted.  This  view  evinces 
the  flexibility  of  the  principles  of  the  common  law,  which  are  capable 
of  adaption  to  new  or  changed  circumstances,  and  enables  courts  to 
adjust  the  application  of  the  principle  not  in  obedience  to  a  supposed 
arbitrary  rule,  but  with  such  limitations  and  qualifications  as  best 
accord  with  reason  and  justice.  In  applying  the  rule  we  should  be 
cautious  not  to  violate  the  very  principles  upon  which  it  is  founded. 
"While  shielding  the  employer  from  unjust  and  burdensome  liabilities, 
we  should  not  withhold  all  redress  from  the  employed  for  remissness 
and  carelessness  in  respect  to  duties  which  fairly  devolve  upon  the 
former  as  the  principal,  and  over  which  the  latter  have  no  control.  In 
5  M.,  H.  &  G.,  353,  the  court  very  justly  said :  "  Though  we  have 
said  that  a  master  is  not  generally  responsible  to  a  servant  for  an 
injury  occasioned  by  a  fellow  servant  while  they  are  acting  in  one 
common  service,  yet  this  must  be  taken  with  the  qualification  that 
the  master  shall  have  taken  due  care  not  to  expose  his  servants  to 
unreasonable  risks." 

The  master  is  liable  if  his  own  negligence  or  want  of  care  produces 
the  injury,  and  this  may  be  manifested  by  employing  unfit  servants 
or  agents,  or  furnishing  improper  or  unsafe  machinery,  implements, 
facilities,  or  materials  for  the  use  of  the  servant.  (25  N^.  Y.  562;  39 
Id.  468.)  It  was  at  first  doubted  by  this  court  whether  the  exemption 
should  not  be  limited  to  injuries  by  servants  whose  employment  was 
the  same  (1  Seld.  492,  per  Gardiner,  J.)  ;  but  it  has  since  been  re- 
peatedly held  that  injuries  by  servants  or  agents,  engaged  in  the  same 
general  business  or  enterprise,  are  within  the  exemption.  (Id.) 
Hence  the  difficulty  of  applying  the  rule  in  actions  against  corpora- 
tions whose  whole  business  can  only  be  transacted  by  agents  who  are 
in  some  sense  co-servants.  In  39  N.  Y.  supra,  the  court  decided  that 
a  corporation  was  liable  if  negligence  causing  an  injury  to  a  subordi- 
nate servant  could  be  imputed  to  the  directors,  but  did  not  establish 
any  definite  rule  on  the  subject.  The  true  rule,  I  apprehend,  is  to 
hold  the  corporation  liable  for  negligence  or  want  of  proper  care  in 
respect  to  such  acts  and  duties  as  it  is  required  to  perform  and  dis- 
charge as  master  or  principal,  without  regard  to  the  rank  or  title  of 
the  agent  intrusted  with  their  performance.    As  to  such  acts,  the  agent 


CHAP.  XXV.]  THE  NON-ASSIGNABLE  DUTIES.  739 

occupies  the  place  of  the  corporation,  and  the  latter  should  be  deemed 
•present,  and  consequently  liable  for  the  manner  in  which  they  are 
performed.  If  an  agent  employs  unfit  servants,  his  fault  is  that  of 
the  corporation,  because  it  occurred  in  the  performance  of  the  princi- 
pal's duty,  although  only  an  agent  himself.  So  in  providing  machin- 
ery or  materials,  and  in  the  general  arrangement  and  management  of 
the  business,  he  is  in  the  discharge  of  the  duty  pertaining  to  the 
principal. 

In  the  case  before  us  it  was  clearly  the  duty  of  the  corporation,  in 
making  up  and  dispatching  the  advance  train,  to  supply  it  with  suit- 
able machinery  and  sufficient  help  for  the  business  and  journey  which 
it  was  about  to  undertake ;  and  if  there  was  any  want  of  care  in  these 
respects,  which  caused  the  injury,  it  is  liable.  Eockefeller  had  the 
general  charge  of  this  business,  and,  within  the  principle  decided  in 
the  Laning  Case,  represented  the  corporation  itself. 

It  is  claimed  by  the  counsel  for  the  appellant,  that  the  company 
are  not  liable,  because  the  agent  had,  in  fact,  employed  a  third  brake- 
man  to  go  upon  this  train,  who,  by  reason  of  oversleeping,  failed  to 
get  aboard  in  time,  and  hence,  that  the  injury  must  be  attributed  to 
his  negligence,  or,  if  attributable  to  the  negligence  of  the  general  agent 
in  not  supplying  his  place  with  another  man,  such  negligence  must 
be  regarded  as  committed  while  acting  in  the  capacity  of  a  mere  co- 
servant,  within  the  doctrine  of  irresponsibility.  Neither  of  these 
positions  is  tenable.  The  hiring  of  a  third  brakeman  was  only  one  of 
the  steps  proper  to  be  taken  to  discharge  the  principal's  duty,  which 
was  to  supply  with  sufficient  help  and  machinery,  and  properly  de- 
spatch the  train  in  question,  and  this  duty  remained  to  be  performed, 
although  the  hired  brakeman  failed  to  wake  up  in  time,  or  was  sick, 
or  failed  to  appear  for  any  other  reason.  It  was  negligent  for  the 
company  to  start  the  train  without  sufficient  help.  The  acts  of  Rocke- 
feller cannot  be  divided  up,  and  a  part  of  them  regarded  as  those  of 
the  company,  and  the  other  part  as  those  of  a  co-servant  merely,  for 
the  obvious  reason  that  all  his  acts  constituted  but  a  single  duty.  His 
acts  are  indivisible,  and  the  attempt  to  create  a  distinction  in  their 
character  would  involve  a  refinement  in  favor  of  corporate  immunity 
not  warranted  by  reason  or  authority.  As  well  might  the  company  be 
relieved  if  the  train  was  started  without  an  engineer,  or  without 
brakes,  or  with  a  defective  engine.  The  same  duty  rested  upon  the 
company,  though  every  man  employed  had  died  or  run  away  during 
the  night,  and  if  negligent  in  discharging  it,  either  by  acts  of  com- 
mission or  omission,  whether  in  employing  improper  help,  or  not 
enough  of  it,  or  in  not  requiring  their  presence  upon  the  train,  it  is, 
upon  every  just  principle,  responsible  for  the  consequences.  Nor  is 
the  company  relieved,  although  negligence  may  be  imputed  to  the 
defaulting  brakeman.  The  only  effect  of  that  circumstance  would 
be  to  make  the  negligence  contributory  with  the  brakeman,  but  would 


740  MALAY   V.    MOUNT   MORRIS   E.    L.    CO.  [CHAP.   XXT. 

not  affect  the  liability  of  the  company.  It  is  unnecesary,  therefore, 
to  inquire  whether  the  sleeping  brakeman  was  so  engaged  in  the  com- 
mon service  as  that  the  defendants  could  be  exempted  from  liability 
if  the  injury  was  solely  attributable  to  his  neglect. 

Assuming  that  the  facts  are,  as  the  jury  must  have  found,  the  liar 
bility  of  the  company  is  clear.  These  heavy  freight  trains  were  de- 
spatched only  five  minutes  apart,  and  traversed  a  xery  heavy  grade, 
and  were  liable,  especially  in  cold  weather,  to  precisely  such  accidents 
as  did  occur,  in  which  event  collisions  with  fatal  results  were  almost 
certain  to  ensue.  The  principal  protection  in  such  cases  is  the  prompt 
and  efficient  application  of  the  brakes,  and  the  utmost  care  should  be 
exercised  in  providing  a  sufficient  number  of  reliable  men  to  perform 
this  duty.  If  we  were  called  upon  to  spell  out  a  contract  between  the 
parties,  it  would  be  implied  that  the  company  agreed  to  use  proper 
care  not  to  expose  the  deceased  to  risks  of  this  character.  He  was 
engaged  upon  another  train  in  the  discharge  of  his  duty,  and  was 
not  only  in  no  way  connected  with  the  broken  train,  but  he  could 
neither  know  of  nor  provide  against  the  defect. 

No  authority  has  been  cited  which  would  justify  us  in  relieving  the 
defendant  from  this  liability,  nor  have  I  been  able  to  find  any.  In 
3  Cush.  270,  the  Supreme  Court  of  Massachusetts  intimate,  although 
it  was  unnecessary  to  decide,  that  a  railroad  company  is  liable  for  an 
injury  to  an  employee  caused  by  a  deficiency  of  help  upon  another 
train. 

Mr.  Eedfield,  in  a  note  in  a  recent  edition  of  his  work  on  Railwajrs, 
expresses  the  opinion  that  corporations  should  be  regarded  as  con- 
structively present  in  all  acts  performed  by  their  general  agents, 
within  the  range  of  their  employment;  and  the  tendency  of  judicial 
opinion,  while  it  adheres  to  the  general  rule  of  irresponsibility,  ia 
against  extending  it. 

The  judgment  must  be  affirmed. 

Peckham,  Andeev^s,  and  Rapallo,  JJ.,  concur. 

Allen,  Geover,  and  Folger,  JJ.,  dissent. 

Judgment  affirmed. 


MALAY  V.  THE  MOUNT  MORRIS  ELECTRIC  LIGHT 

COMPANY. 

41  N.  Y.  App.  Div.  574.     1899. 

The  plaintiff  was  employed  by  the  defendant  as  a  lineman  and 
inspector.  It  was  a  part  of  his  duty  to  hang  lamps  for  the  defendant 
company  and  the  wires  connecting  these  lamps  with  the  defendant's 
power  house.  He  brought  this  action  against  the  defendant  to  recover 
damages  for  personal  injuries  sustained  through  the  negligence  of 


CHAP.   XXV.]  THE   NON-ASSIGNABLE   DUTIES.  741 

one  Matthews,  a  co-employee,  who  was  in  charge  of  the  dynamo  room 
of  the  power  house  at  the  time  of  the  accident.  The  plaintiff's  evi- 
dence tended  to  show  either  that  Matthews  was  ignorant  as  to  the 
duties  of  his  position,  or  that  he  was  careless  or  reckless  in  their  per- 
formance. Judgment  for  plaintiff.  Defendant  appeals.  Other  facts 
appear  in  the  opinion  of  the  court. 

Ingraham,  J. :  ...  It  appeared  from  the  plaintiff's  evidence  that 
on  July  6,  1891,  the  plaintiff  was  ordered  to  hang  a  lamp  at  103  Park 
Place;  that  he  went  to  the  station  and  got  a  lamp  and  there  saw 
Matthews  on  duty;  that  plaintiff  told  Matthews  that  he  was  going 
to  hang  a  lamp  at  103  Park  Place,  and  to  be  sure  and  not  turn  the 
current  on  until  the  plaintiff  had  notified  him  over  the  telephone  that 
the  lamp  was  hung,  when  he  could  give  the  circuit  a  test.  Matthews 
said :  "  All  right.  Bill,  starting  time  is  not  until  seven  forty-five,"  to 
which  the  plaintiff  replied :  "  I  don't  know  whether  I  will  be  done 
then  or  not,  but  I  will  telephone  as  soon  as  I  get  done."  Matthews 
had  full  charge  of  the  station  at  the  time  of  this  conversation.  .  .  . 
The  plaintiff  went  to  the  locality  at  which  he  was  to  hang  the  lamp, 
started  to  make  the  connection  between  the  defendant's  wires  on  one 
of  the  defendant's  poles,  standing  on  a  ladder  about  ten  feet  from  the 
ground,  and  while  making  this  connection  he  received  a  charge  of 
electricity  over  the  wires.  He  fell  backward  from  the  ladder  on  which 
he  was  standing  and  struck  upon  the  sidewalk,  and  sustained  the 
injury  to  recover  for  which  this  action  was  brought.  The  accident 
happened  some  time  between  six  and  half-past  six  o'clock  in  the 
evening.  Between  six  and  half-past  six  o'clock,  about  twenty-five 
minutes  after  the  plaintiff  left  the  power  house,  Matthews  started  up 
the  dynamos,  closed  the  circuit  upon  circuit  "  15,"  upon  which  the 
plaintiff  was  working,  so  as  to  turn  the  current  on  this  circuit,  and 
it  was  in  consequence  of  Matthews  turning  on  this  current  while  the 
plaintiff  was  at  work  connecting  the  wires  that  he  received  the  shock 
which  caused  him  to  fall  and  sustain  the  injury.  .  .  . 

To  entitle  the  plaintiff  to  recover,  there  must  be  evidence  sufficient 
to  sustain  a  finding  of  the  jury  that  the  accident  was  caused  by  the 
negligence  of  Matthews;  that  Matthews  was  not  a  competent  man 
to  perform  the  duties  required  of  him  by  the  defendant,  and  that  the 
defendant,  before  the  accident,  had  knowledge  or  notice  of  Matthews' 
incompetency.  As  was  said  by  Judge  Brown  in  Coppins  v.  N.  Y.  0. 
&  H.  R.  R.  R.  Co.  (122  N.  Y.  564)  :  "The  defendant's  duty  to  the 
plaintiff,  so  far  as  reasonable  care  would  accomplish  it,  was  to  employ 
only  competent  men  in  the  management  of  its  road.  A  competent 
man  is  a  reliable  man;  one  who  may  be  relied  upon  to  execute  the 
rules  of  the  master,  unless  prevented  by  causes  beyond  his  own  control. 
Hence,  incompetency  exists  not  alone  in  physical  or  mental  attributes, 
but  in  the  disposition  with  which  a  servant  performs  his  duties.  If 
he  habitually  neglects  these  duties,  he  becomes  unreliable,  and  al- 


742  MALAY   V.   MOUNT  MOREIS   E.   L.   CO.  [CHAP,   XXV. 

though  he  may  be  physically  and  mentally  able  to  do  well  all  that  is 
requested  of  him,  his  disposition  toward  his  work  and  toward  the 
general  safety  of  the  work  of  his  employer  and  to  his  fellow  servants 
makes  him  an  incompetent  man."  And  in  Wright  v.  N.  Y.  C.  E.  R. 
Co.  (25  N.  Y.  565)  it  is  stated  that  "The  master  is  liable  to  his 
servant  for  any  injury  happening  to  him  from  the  misconduct  or  per- 
sonal negligence  of  the  master;  and  this  negligence  may  consist  in 
the  employment  of  unfit  and  incompetent  servants  and  agents.  .  .  . 
The  employer  does  not  undertake  with  each  or  any  of  his  employees 
for  the  skill  and  competency  of  the  other  employees  engaged  in  and 
about  the  same  service,  .  .  .  since  neglect  and  want  of  due  care  in 
the  selection  and  employment  of  the  agent  or  servant  through  whose 
want  of  skill  or  competency  an  injury  is  caused  to  a  fellow  servant, 
must  be  shown  in  order  to  charge  the  master."  Applying  this  prin- 
ciple, we  think  the  evidence  justified  the  submission  of  the  question 
as  to  the  defendant's  negligence  to  the  jury.  The  plaintiff  was  em- 
ployed to  perform  for  the  defendant  a  hazardous  operation.  In  join- 
ing these  two  wires  together  he  subjected  himself  to  the  effect  of  a 
current  passing  from  one  wire  to  the  other.  It  was  the  defendant's 
duty  to  provide  proper  machinery',  and  to  employ  faithful  and  com- 
petent servants  to  prevent  injur}"-  to  the  plaintiff  when  engaged  in  the 
performance  of  this  duty.  If  the  defendant  employed  an  incompetent 
servant,  and  gave  to  him  charge  of  the  machinery  by  which  the  cur- 
rent would  be  turned  on  to  these  wires  on  which  the  plaintiff  was  sent 
to  work,  or  if  those  servants  that  it  had  employed  had  shown  by  their 
previous  conduct  that  they  could  not  be  relied  upon  to  execute  the 
rules  of  the  master  necessary  for  the  protection  of  the  other  servants 
employed  in  their  work,  or  that  they  recklessly  and  in  disregard  of 
ordinary  rules  of  prudence  and  care  exposed  their  fellow  servants  to 
unnecessary  danger,  and  notice  of  such  neglect  or  incompetency  was 
brought  home  to  the  master,  and  an  injury  resulted  from  the  act 
of  this  incompetent  servant  so  employed,  the  master  is  liable.  In  this 
case,  the  evidence  was  sufficient  to  show  that  Matthews,  either  from 
ignorance  or  from  recklessness,  was  an  incompetent  man  and  unfit 
to  be  intrusted  with  this  dangerous  machinery,  and  that  knowledge 
of  the  fact  had  been  brought  home  to  the  master.^    It  is  true  that  the 

*  In  many  Jurisdictions  not  only  Is  evidence  of  specific  acts  of  Incompetency,  on 
the  part  of  fellow  servants  admissible  to  charge  the  master,  but  "  evidence  of 
general  reputation  is  admissible  to  prove  the  unfitness  of  a  fellow  servant,  and 
Ignorance  of  such  general  reputation  on  the  part  of  the  master  may  of  itself, 
where  it  is  his  Imperative  duty  to  know  the  fitness  of  his  servant,  and  where  in- 
quiry would  have  led  to  the  knowledge,  be  such  negligence  as  to  charge  the  master." 
Western  Stone  Co.  v.  Whalen,  1.51  111.  472,  484.  See,  also,  Norfolk  and  Western  U. 
Co.  V.  Hoover,  79  Md.  25.3,  and  Handley  v.  Company,  15  Utah,  176. 

In  New  York,  however,  evidence  of  general  reputation  is  inadmissible.  Thus,  In 
Park  V.  N.  Y.  C.  and  H.  R.  R.  R.  Co.,  155  N.  Y.  21.5,  at  p.  218,  Haight,  J.,  said :  "  We 
are  aware  that  in  some  states  the  courts  have  permitted  incompetency  of  servants 
to  be  shown  by  general  reputation,  but  we  have  never  gone  to  that  extent  in  this 
state.  It  appears  to  us  that  the  safer  and  better  rule  is  to  require  Incompetency  to 
be  shown  by  the  specific  acts  of  the  servant,  and  then,  that  the  master  knew  or 


CHAP.  XXV.]  THE   NON-ASSIGNABLE  DUTIES.  743 

person  charged  with  the  duty  of  employing  or  discharging  Matthews 
testified  that  he  had  investigated  complaints  and  had  satisfied  himself 
that  they  were  unfounded.  That  question  was  properly  submitted 
to  the  jury  to  determine  whether  or  not,  as  a  matter  of  fact,  Matthews 
was  a  competent  man  for  the  work  that  he  was  employed  to  do,  and  if 
he  was  incompetent,  whether  the  defendant  had  such  knowledge  of  his 
incompetency  as  made  it  negligent  for  it  to  retain  him  in  its  employ. 
The  verdict  of  the  jury  is  not  unsupported  by  the  evidence,  and  we 
should  not  be  justified  in  reversing  it  upon  that  ground.  After  an 
examination  of  the  whole  record  we  see  no  reason  for  disturbing  the 
verdict  of  the  jury  upon  any  question  submitted  to  them.  .  .  . 

Upon  the  whole  case  we  think  the  judgment  was  right  and  should 
be  affirmed,  with  costs. 

Baeeett,  Edmsey,  and  McLaughlin,  JJ.,  concurred. 

Judgment  affirmed,  with  costs}- 


ENGLISH   V.   AMIDON. 

72  N.  H.  301.     1902. 

Action  on  the  case  by  Henry  P.  English  against  Frank  Amidon 
and  another  for  personal  injuries.  Defendants'  motion  for  a  nonsuit 
was  granted,  and  plaintiff  excepted. 

Bingham,  J.  It  was  the  duty  of  the  defendants,  in  the  exercise  of 
reasonable  care  and  diligence,  to  provide  and  maintain  a  safe  and  suit- 
able stairway  by  which  the  plaintiff,  as  their  servant,  could  go  to  and 
from  his  place  of  work  in  the  mill.  Fifield  v.  Railroad,  42  N".  H. 
225;  Jaques  v.  Company,  66  N".  H.  482;  Fitzgerald  v.  Company,  155 

ought  to  have  known  of  such  Incompetency.  The  latter  may  be  shown  by  evidence 
tending  to  establish  that  such  incompetency  was  generally  known  in  the  community." 
Jbnes,  J.,  In  McCarthy  v.  Ritch,  59  N.  Y.  App.  Dlv.  145,  commenting  upon  the  Park 
case  and  other  cases,  said :  "  My  interpretation  of  those  decisions  is,  not  that  evi- 
dence of  specific  acts  opens  the  door  for  the  admission  of  testimony  as  to  mere 
general  reputation,  but  of  testimony  that  knowledge  of  such  specific  acts  waa  ■ 
general  in  the  community"  (p.  147).  "The  rule  is  as  to  such  proof  that  the 
plaintiff  must  first  show  specific  acts,  and  then  the  general  knowledge  In  the  com- 
munity of  such  specific  acts"  (p.  149). 

>  "  In  actions  of  this  character,  where  a  servant  sues  his  master  for  injuries 
resulting  from  the  negligence  of  a  fellow  servant,  the  plaintiff,  to  succeed,  must 
prove,  not  only  that  some  negligence  of  the  fellow  servant  caused  the  injury,  but 
also  that  the  master  had  himself  been  guilty  of  negligence,  either  in  the  selection  of 
the  negligent  fellow  servant  in  the  first  instance,  or  in  retaining  him  in  his  ser- 
vice afterwards.  Mere  negligence  on  the  part  of  the  fellow  servant,  though  result- 
ing in  an  injury,  will  not  sufllce  to  support  the  action,  because  the  master  does 
not  insure  one  employee  against  the  carelessness  of  another.  But  he  owes  to  each  of 
his  servants  the  duty  of  using  reasonable  care  and  caution  in  the  selection  of  com- 
petent fellow  servants,  and  in  the  retention  in  his  service  of  none  but  those  who 
are.  If  he  does  not  perform  this  duty,  and  an  Injury  is  occasioned  by  the  negligence 
of  an  incompetent  or  careless  servant,  the  master  Is  responsible  to  the  Injured 
employee,  not  for  the  mere  negligent  act  or  omission  of  the  incompetent  or  careless 
servant,  but  for  his  own  negligence  in  not  discharging  his  own  duty  towards 
the  injured  servant."    Norfolk  and  Western  R.  Co.  v.  Hoover,  79  Md.  253,  261,  262. 


744  ENGLISH   V.   AMIDON.  [OHAP.   XXV. 

Mass.  155;  Mahoney  v.  Dore,  155  Mass,  513.  Inasmuch  as  the 
defendants  operated  their  mill  at  night,  it  is  claimed  that  the  stairway 
should  then  have  been  lighted  to  render  it  reasonably  safe.  If  the 
stairway  was  unsuitable  for  the  use  of  the  defendants'  servants  at 
night,  because  the  plan  of  construction,  taken  in  conjunction  with  the 
darkness,  made  it  dangerous,  it  might  be  found  to  have  been  the  de- 
fendants' duty,  in  the  exercise  of  ordinary  care,  to  make  it  reasonably 
safe  either  by  suitably  lighting  it  or  by  remedying  the  construction; 
and  this  was  a  personal  duty,  from  which  they  could  not  relieve 
themselves  by  delegating  its  performance  to  another. 

The  evidence  was  that  the  plaintiff  and  seven  other  spinners,  after 
finishing  their  work  at  nine  o'clock  in  the  evening,  regularly  came 
down  the  stairway  from  the  third  floor  of  the  mill ;  that  no  other  way 
was  provided  for  them ;  that  the  stairway  was  winding,  steep,  narrow, 
and  worn ;  that  the  treads  of  the  stairs  varied  in  width,  being  narrow- 
est on  the  inside  of  the  curve;  and  that  the  defendants  had  placed 
lamps,  which  were  usually  lighted  at  night,  over  the  stairs.  On  the 
night  in  question,  when  the  plaintiff  and  the  other  workmen  had  fin- 
ished their  labors,  they  put  out  the  lights  over  their  machines,  as  was 
their  custom,  and  started  to  go  out  of  the  mill.  On  reaching  the 
stairway  they  found  it  was  dark,  but  proceeded  to  go  down  and  out, 
the  plaintiff  going  on  the  outside  of  the  curve,  where  the  treads  of 
the  stairs  were  widest,  steadying  himself  with  his  hand  against  the 
wall,  there  being  no  railing  on  that  side  of  the  stairway.  When  part 
way  down  he  slipped,  fell,  and  was  injured.  Reasonable  men  could 
conclude  from  this  evidence  that  the  defendants  required  their  ser- 
vants to  use  this  stairway  at  night;  that  its  construction,  in  con- 
junction with  the  darkness,  rendered  its  use  dangerous;  that  the 
defendants  themselves  so  regarded  it;  that  their  neglect  to  make  the 
stairway  safe  for  such  use  was  the  proximate  cause  of  the  plaintiff's 
injury ;  and  that  under  the  circumstances  he  was  exercising  due  care 
in  undertaking  to  use  the  stairway  (the  only  means  provided  for 
leaving  the  mill)  and  in  his  conduct  while  using  it. 

Did  the  plaintiff  voluntarily  assume  the  risk  of  the  defendants' 
negligence  ?  "  One  does  not  voluntarily  assume  a  risk,  within  the 
meaning  of  the  rule  that  debars  a  recovery,  when  he  merely  knows 
there  is  some  danger,  without  appreciating  the  danger."  Mundle  v. 
Company,  86  Me.  400,  405;  Demars  v.  Company,  67  N.  H.  404. 
One  cannot  be  said,  as  a  matter  of  law,  to  assume  a  risk  voluntarily, 
though  he  knows  the  danger  and  appreciates  the  risk,  if  at  the  time 
he  was  acting  "under  such  an  exigency,  or  such  an  urgent  call  of 
duty,  or  such  constraint  of  any  kind,  as  in  reference  to  the  danger 
deprives  his  act  of  its  voluntary  character"  (Mahoney  v.  Dore, 
supra)  ;  or  if,  after  discovering  the  master's  neglect,  he  "  has  no 
opportunity  to  leave  the  service  before  the  injury  is  received."  (Olney 
V.  Eailroad,  71  N.  H.  427,  431.) 


CHAP.   XXV.]  THE   NON-ASSIGNABLE   DUTIES.  745 

When  the  plaintiff  went  into  the  mill  it  was  daylight.  He  know 
that  his  work  would  not  be  finished  before  nine  o'clock  that  night, 
and  that  it  was  the  custom  of  the  defendants  to  then  have  the  stair- 
way lighted.  He  had  the  right  to  believe  they  would  perform  their 
duty  on  the  night  in  question,  and  to  rely  thereon.  He  entered  the 
mill,  worked  until  nine  o'clock,  and  then  went  to  the  stairway  to  go 
out.  On  reaching  it  he  found  himself  surrounded  in  darkness.  Al- 
though he  then  knew  the  defendants  had  failed  to  perform  their 
duty,  yet  in  view  of  the  fact  that  he  then  had  no  choice  open  to  him, 
the  only  exit  provided  being  over  the  dark  stairway,  and  no  oppor- 
tunity to  leave  the  defendants'  service  before  his  injury  was  received, 
it  cannot  be  said,  as  a  matter  of  law,  that  he  voluntarily  assumed  the 
risk.  It  was  for  the  jury  to  say  whether  the  plaintiff,  knowing 
the  defendants'  neglect  of  duty,  fully  appreciated  the  danger  there- 
from and  voluntarily  encountered  it.  Demars  v.  Company,  supra; 
Whitcher  v.  Eailroad,  70  N.  H.  242;  Dempsey  v.  Sawyer,  95  Me. 
295;  Mahoney  v.  Dore,  supra;  Fitzgerald  v.  Company,  supra;  47 
L.  K.  A.  161,  201,  note.  Exception  sustained. 

Chase,  J.,  was  absent.    The  others  concurred. 

On  Rehearing. 

Walker,  J.  The  defendants'  motion  for  a  rehearing  must  be 
denied.  It  was  their  nondelegable  duty  to  provide  reasonably  safe 
stairs  for  use  in  the  night-time;  that  is,  adequate  instrumentalities 
or  means  for  the  reasonably  safe  exit  of  their  men  from  the  factory. 
If  at  the  time  of  the  accident  light  was  essential  to  such  use —  if  the 
danger  incident  to  the  defective  stairs  could  have  been  obviated  by 
artificial  lighting  —  the  duty  to  furnish  the  necessary  light,  or  in 
some  way  to  guard  against  the  apparent  danger,  was  no  more  a  dele- 
gable duty  than  the  duty  to  maintain  stairs  of  suflficient  strength  to 
support  the  ordinary  weight  imposed  upon  them.  The  rule  of  ordi- 
nary care  which  requires  the  master  to  provide  a  safe  structure  for 
travel  from  an  upper  story  to  the  ground  might  require  him  to  fur- 
nish adequate  light  when  the  structure  becomes  unreasonably  danger- 
ous for  use  in  the  darkness,  for  the  same  reason  that  common  pru- 
dence might  require  him  to  keep  a  defective  underground  passageway 
lighted  in  the  daytime  as  well  as  in  the  night-time.  The  principle  in- 
volved is  not  derived  from  exact  or  ingenious  definitions  of  the  words 
"place,"  "tools,"  or  "appliances,"  however  convenient  and  useful 
they  may  be  in  a  particular  case,  but  from  considerations  of  the  re- 
quirements of  ordinary  and  reasonable  care  on  the  part  of  both  the 
employer  and  the  employee.  If,  as  a  matter  of  fact,  a  particular 
course  of  conduct  on  the  part  of  the  master  toward  his  servant  is 
unreasonable  when  measured  by  the  conduct  of  men  in  general  en- 
gaged in  similar  occupations,  he  cannot  shield  himself,  as  a  matter 
of  law,  from  the  consequences  of  such  conduct  by  a  resort  to  verbal 


746  MADIGAN  V.  OCEANIC  STEAM  NAV.  CO.         [CHAP.  XXV. 

distinctions  which  oftener  serve  to  obscure  than  to  elucidate  legal 
principles.  The  law  seeks  to  enforce  as  a  duty  the  requirement  of 
reasonable  conduct;  hence  the  rule  of  ordinary  care,  which  deter- 
mines the  rights  and  duties  of  master  and  servant  in  negligence  cases. 

Whether  ordinary  care  for  the  reasonable  safety  of  their  servants, 
in  view  of  the  contract  of  employment,  required  the  defendants  to 
remedy  or  remiove  the  danger  incident  to  the  use  of  these  stairs  in  the 
night-time,  by  repairing  or  reconstructing  them  or  by  lighting  them,  is 
a  question  of  fact  for  the  jury.  This  court  cannot  say  upon  the  evi- 
dence reported  that  fair-minded  men  in  the  discharge  of  their  duty 
as  jurors,  after  having  viewed  the  premises  and  heard  the  evidence, 
could  not  reasonably  find  that  the  defendants  omitted  to  exercise  the 
degree  of  care  which  common  prudence  required. 

This  case  is  clearly  distinguishable  from  McLaine  v.  Company,  71 
N.  H.  294;  for  in  that  case  the  danger  arose  from  the  act  of  a  fellow 
servant  in  the  performance  of  the  work,  for  which  it  was  held  to  be 
unreasonable  to  hold  the  master  responsible,  and  not  from  any  defects 
in  the  instrumentalities  provided  by  the  master,  for  which  he  is  liable 
if  he  does  not  exercise  ordinary  care  in  the  premises.  Manning  v. 
Manchester  Mills,  70  N.  H.  582,  is  distinguishable  for  a  similar 
reason.  In  other  cases  cited  by  the  defendants  (Mellen  v.  Wilson, 
159  Mass.  88;  Dene  v.  Print  Works,  181  Mass.  560;  Kaare  v.  Com- 
pany, 139  N.  Y.  369 ;  New  York,  etc.,  E.  E.  v.  Perriguey,  138  Ind. 
414;  Collins  v.  Eailroad,  30  Minn.  31)  the  sole  ground  upon  which 
negligence  was  claimed  was  the  absence  of  light  caused  by  the  negli- 
gence of  a  fellow  servant.  The  existence  of  light  in  those  cases  was 
not  required  to  remedy  or  to  obviate  the  danger  arising  from  struc- 
tural defects.  Lamps  for  the  production  of  light  were  regarded  as  a 
part  of  the  properly  constructed  appliances  or  machines  which  it  was 
the  duty  of  the  servant  to  operate.  The  question  of  their  necessity 
and  use  to  guard  against  the  consequences  of  the  master's  negligence 
in  unreasonably  maintaining  dangerously  defective  appliances  was 
not  considered.  Motion  denied. 

Parsons,  C.  J.,  and  Eemick  and  Bingham,  J  J.,  concurred. 
Chase,  J.,  doubted. 


MADIGAN   V.    OCEANIC    STEAM   NAY.    CO. 

178  N.  Y.  242.     1904. 

Appeal  from  an  brder  of  the  Appellate  Division  of  the  Supreme 
Court  in  the  First  Judicial  Department,  which  reversed  an  order  of  a 
Trial  Term  setting  aside  a  verdict  in  favor  of  plaintiff  and  granting 
a  new  trial  and  directed  judgment  on  the  verdict. 

Gray,  J.    The  plaintiff's  husband  was  employed  by  the  defendant 


CHAP.   XXV.]  THE  NON-ASSIGNABLE   DUTIES.  747 

as  one  of  a  gang  of  stevedores  and,  while  engaged  upon  the  work  of 
transferring  coal  from  a  barge  into  the  steamship  Oceanic,  he  was 
killed.  The  plaintiff  has  sued  to  recover  damages  for  his  death, 
charging  that  it  was  caused  through  the  negligence  of  the  defendant. 
The  plaintiff  obtained  a  verdict  in  her  favor ;  but  the  trial  court  set 
it  aside  and  ordered  a  new  trial.  The  Appellate  Division,  reviewing 
this  order  upon  an  appeal,  reversed  it  and  directed  judgment  to  be 
entered  for  the  plaintiff,  in  accordance  with  the  verdict  rendered.  In 
that  determination  the  court  was  not  unanimous  and,  upon  this 
appeal  by  the  defendant,  the  sole  question  actually  is,  whether  it  had 
fulfilled  its  whole  duty  to  its  employee  with  respect  to  providing  a 
safe  place  for  him  in  which  to  do  his  work.  It  was,  and  is,  charged 
by  the  plaintiff  that  the  defendant  was  negligent  in  the  failure  to 
supply  lamps,  or  lights,  to  illuminate  the  interior  of  the  coal  barge, 
where  the  deceased  was  stationed  upon  the  occasion  in  question.  That 
omission,  as  it  appears  from  the  opinion  of  the  majority  of  the  Appel- 
late Division  justices,  was  regarded  as  having  been  the  cause  of  the 
accident  and  because  the  coal  foreman  of  the  defendant  was  in  charge 
of  the  work  and  represented  the  latter  in  that  respect,  his  negligence 
in  failing  to  provide  the  lights  was  to  be  attributed  to  the  general 
employer. 

The  facts  may  be  briefly  stated.  The  coal  barge  lay  between  the 
steamship  and  the  wharf,  and  a  number  of  stevedores,  of  whom  the 
deceased  was  one,  were  in  the  hold  of  the  barge,  engaged  in  shoveling 
coal  into  buckets,  which  were  let  down  into  the  hold  at  the  end  of 
a  rope,  or  "  fall."  When  they  were  filled,  they  would  be  hoisted  out 
and  up  the  side  of  the  steamship.  The  captain  of  the  barge  stood 
upon  the  barge's  deck  and,  by  the  use  of  a  guy  rope  attached  to  the 
"  fall,"  he  was  able  to  control  the  rise  of  a  bucket  from,  or  its  descent 
into,  the  hold.  The  importance  of  this  was  in  the  necessity  of  pre- 
venting the  buckets  from  swinging  to  and  fro  and  against  the  side 
of  the  vessel.  Upon  this  occasion,  work  was  commenced  in  the 
middle  of  the  day  and  was  continued  until  after  sunset,  when  the 
hold  had  become  darkened.  McDonald  was  the  defendant's  coal  fore- 
man, who  employed  and  directed  the  other  stevedores,  and  it  came 
within  his  duties  to  get  out  lamps,  whenever  the  darkness  made  them 
necessary.  He  did  not  do  so  at  this  time,  as  he  testified,  because  he 
"  did  not  think  it  necessary."  A  bucket,  which  had  been  filled  with 
coal  on  the  side  of  the  hold  furthest  away  from  the  steamship,  was 
being  hoisted,  when,  from  the  failure  of  the  barge's  captain  to  prop- 
erly secure  the  guy  rope,  it  swung  violently  over  and  towards  the 
steamship,  striking  the  head  of  the  deceased  against  a  bolt,  project- 
ing from  the  barge's  side,  and  killing  him.  The  barge's  captain  testi- 
fied that  it  was  too  dark  to  enable  him  to  see  into  the  hold  and  that 
he  did  not  know  the  coal  bucket  was  hooked  on.  As  the  case  was  sub- 
mitted to  the  jury,  it  is  clear  that  the  verdict  must  have  been  reached 


; 


748  MADIQAN  V.  OCEANIC  STEAM  NAV.   CO.         [CHAP.  XXV. 

upon  the  theory  that  the  defendant  was  liable  for  the  foreman's 
neglect  to  supply  the  lights. 

It  was  not  disputed  that  the  defendant  had  provided  lamps,  suffi- 
cient and  quite  available  to  the  foreman  for  the  men's  use.  They 
were  in  sheds  on  the  wharf,  and  also  upon  the  steamship,  and  if  they 
were  not  used  upon  this  occasion,  it  was  simply  because  in  the 
foreman's  judgment  they  were  not  required.  I  cannot  agree  with 
the  court  below  that  the  omission,  or  neglect,  of  this  foreman  was 
chargeable  to  the  defendant.  That  he  was  so  far  the  alter  ego  of  the 
master,  as  to  make  the  latter  responsible  for  any  failure  to  furnish  a 
safe  place  to  work  in,  or  safe  appliances  to  work  with,  may  be  readily 
admitted ;  but  if,  as  to  some  detail  of  the  undertaking,  he  was  actually 
doing  the  work  devolving  upon  a  servant,  the  others  took  the  risk 
of  their  fellow  servant's  performance.  The  defendant  was  not  at 
fault  in  any  of  those  general  respects  in  which  an  employer  is  re- 
garded as  under  obligations  towards  those  whom  he  employs  to  work 
for  him.  The  hold  of  the  barge  was  a  safe  enough  place  to  work  in ; 
the  foreman  was  competent  and  no  complaint  is  made  as  to  the  ma- 
chinery or  appliances  used  in  the  work.  Whether  a  master  shall  be 
held  to  be  liable  when  the  negligent  act,  or  omission  to  act,  was  that 
*of  one  of  his  servants,  depends  usually,  if  not,  indeed,  always,  upon 
the  character  of  the  act.  That  is  to  say,  if  the  specific  act  is  one 
the  doing  of  which  can  be,  properly  and  justly,  regarded  as  within 
the  personal  duties  of  the  master,  whose  performance  he  has  delegated 
to  another,  and  not  some  act  within  the  line  of  a  mere  servant's  duty, 
then  the  master  is  properly  chargeable  with  the  results  of  a  negli- 
gent performance  or  omission.  When  McDonald,  the  defendant's 
coal  foreman,  in  the  exercise  of  his  judgment  omitted  to  get  the 
lamps  for  the  stevedores,  which  the  defendant  had  been  careful  to 
provide,  I  think  that  it  was  the  omission  of  a  duty  resting  on  the 
foreman  as  a  fellow  servant,  having  that  detail  in  charge.  It  was, 
either,  for  him  to  judge  when  the  lamps  were  needed,  or  it  was  for 
the  others  to  demand  them,  if  the  place  had  become  too  dark  to 
remain  in  at  work.  There  is  no  evidence  of  their  having  made  any 
request  of  the  foreman;  so  that,  if  the  conditions  had  become  so 
changed  as  to  render  continuance  in  their  work  dangerous,  they  all 
erred  in  their  judgment.  As  it  was  said  in  Kimmer  v.  Weber  (151 
N.  Y.  417),  where  it  was  a  question  of  sufficiently  safe  scaffolding, 
put  up  under  the  instructions  of  a  foreman  by  the  workmen,  "  it  was, 
at  most,  but  an  error  of  judgment  on  the  part  of  the  foreman  with 
respect  to  a  detail  of  the  work  in  which  the  masons  (in  that  case) 
were  engaged.  He  concluded,  as  the  workmen  themselves  did,  that 
the  place  was  safe  and,  in  determining  that  question,  they  were  all 
co-servants."  In  Crispin  v.  Babbitt  (81  N".  Y.  516),  the  plaintiif, 
a  laborer,  was  injured  while  engaged  with  others  in  lifting  the  fly- 
wheel off  of  an  engine.     The  defendant  in  that  case  had  intrusted 


CHAP.   XXV.]  THE   NON-ASSIGNABLE   DUTIES.  749 

the  conduct  of  his  business  to  a  general  manager  and  he,  upon  the 
occasion  in  question,  carelessly  started  the  engine.  It  was  held  that, 
notwithstanding  his  position,  he  was  not,  in  what  he  did,  acting  in 
the  defendant's  place.  It  was  observed  in  the  opinion,  that  "  a 
superintendent  of  a  factory,  although  having  power  to  employ  men, 
or  represent  the  master  in  other  respects,  is,  in  the  management  of 
the  machinery,  a  fellow  servant  of  the  other  operatives."  In 
Geoghegan  v.  Atlas  Steamship  Company  (146  N.  Y.  369),  where  it 
was  claimed  that  the  deceased  had  come  to  his  death  by  reason  of 
certain  gangway  doors  in  the  side  of  the  vessel  having  been  carelessly 
left  open,  through  which  he  had  fallen,  we  held  that  the  defendant 
was  not  liable  for  the  failure  of  the  officer,  whose  duty  it  was  to 
close  the  doors,  and  that  the  negligence,  which  led  to  the  result,  was 
that  of  a  co-servant.  These  cases,  and  others  which  might  be  cited, 
rest  upon  the  principle  that  the  liability  of  the  master  does  not  depend 
upon  the  grade  or  the  rank  of  the  servant,  who  represents  him  in 
the  superintendence  of  the  others  in  his  employment,  but  the  act 
which  causes,  or  results  in,  an  injury  in  the  course  of  the  work,  must 
be  of  a  character  which  the  master,  as  such,  should  perform,  and  not 
one  which  would  be  expected  of  a  servant,  as  such. 

Here  the  defendant  provided  a  supply  of  lamps  for  its  servanta 
and  they  could,  and  should,  have  taken  and  used  them  when  they 
were  required.  To  get  them  was  a  mere  detail  of  the  work  which 
it  was  the  foreman's  duty,  as  one  of  a  number  of  servants  engaged 
in  a  common  task,  to  execute. 

I  advise  the  reversal  of  the  order  of  the  Appellate  Division  and 
that  a  new  trial  be  had,  with  costs  to  abide  the  event. 

Parker,  Ch.  J.,  O'Brien,  Bartlett,  Haight,  Cullen,  JJ.  (and 
Martin,  J.,  in  result),  concur.  Order  reversed,  etc} 


FULLER   V.   JEWETT. 

80  N.   Y.  46.     1880. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme 
Court,  in  the  Second  Judicial  Department,  affirming  a  judgment  in 
favor  of  plaintiff,  entered  upon  a  verdict. 

This  action  was  brought  against  the  defendant  as  receiver,  etc., 
of  the  Erie  Railway,  to  recover  damages  for  the  death  of  Jefferson 
Fuller,  plaintiff's  intestate,  alleged  to  have  been  caused  by  defend- 
ant's negligence. 

Andrews,  J.  The  plaintiff's  intestate,  an  engineer  on  the  Erie 
Railway,  was  killed  on  July  33,   1875,  by  the  explosion   of  the 

«  See  Vogel  v.  American  Bridge  Co.,  180  N.  Y.  373. 


750  FULLER  V.   JEWETT.  [CHAP.  XXV. 

boiler  of  a  locomotive  engine,  belonging  to  the  company,  which  the 
intestate  was  running  as  engineer  at  the  time  of  the  accident. 
The  engine  was  examined  after  the  explosion,  and  it  was  found  that 
a  number  of  the  stay-bolts  in  the  left  leg  of  the  boiler  were  broken, 
and  others  were  corroded  by  rust,  and  the  outer  sheet  of  the  boiler 
through  which  the  stay-bolts  passed  was  eaten  away  by  rust  to  the 
-extent  of  from  one-third  to  one-half  its  original  thickness. 

The  evidence  authorized  the  inference  that  the  explosion  waa 
caused  by  the  weakness  of  the  boiler,  resulting  from  the  defective 
stay-bolts  and  the  condition  of  the  outer  sheet.  It  did  not  definitely 
appear  how  long  the  defective  condition  of  the  boiler  had  existed. 
The  ends  of  some  of  the  broken  stay-bolts,  at  the  point  where  they 
were  broken,  were  scaled  over  with  rust,  and  experts  testified  that 
it  would  require  some  time  for  rust  to  eat  away  the  iron  to  the  extent 
disclosed  by  the  examination.  The  engine  was  built  in  1865  and  had 
been  in  use  on  the  railway  from  that  time.  In  October,  1874,  it  was 
taken  to  the  shops  of  the  company  for  general  repairs,  and  Van 
Vechten,  the  master  mechanic  in  charge  of  the  shops,  gave  directions 
for  its  thorough  overhauling.  The  repairs  were  made  by  mechanics 
in  the  employment  of  the  company,  and  in  January,  1875,  the 
•repairs  having  been  completed,  the  engine  was  again  placed  upon  the 
road.  But  after  this,  the  engine  was  frequently  reported  by  Fuller, 
the  engineer,  to  be  out  of  order,  and  in  each  month  subsequent  to 
January,  1875,  to  the  time  of  the  explosion,  except  in  June,  repairs 
were  made  thereon.  In  April,  the  engineer  reported  that  the  stay- 
bolts  in  the  right  leg  of  the  boiler  were  broken,  which  report  on 
examination  was  found  to  be  true,  and  the  broken  stay-bolts  were 
replaced  by  new  ones.  When  the  general  repairs  were  made  in  Octo- 
ber, 1874,  the  mechanics  who  had  charge  of  the  repairs  examined  the 
boiler  to  ascertain  whether  any  of  the  stay-bolts  were  defective,  but 
they  found  none.  This  examination,  however,  was  substantially  con- 
fined to  an  inspection  of  the  outer  sheets  of  the  boiler,  to  discover 
any  indication  of  weakness  and  to  hammering  on  some  of  the  bolts 
to  ascertain  whether  they  were  broken.  But  they  made  no  examina- 
tion of  the  interior  of  the  legs  of  the  boiler  by  the  use  of  lights,  as 
was  practicable  and  usual  in  the  case  of  general  repairs,  as  some  of 
the  witnesses  testified. 

It  is  quite  clear  upon  the  evidence  that  the  boiler  was  in  a  danger- 
ous condition  at  and  prior  to  the  time  of  the  explosion.  The  jury 
were  authorized  to  find  that  the  defects  existed  to  a  greater  or  less 
extent  at  the  time  the  engine  was  taken  to  the  shops  in  October,  1874, 
and  that  the  mechanics  to  whom  Van  Vechten  had  committed  the 
duty  of  making  the  necessary  repairs,  negligently  omitted  to  use 
the  usual  and  proper  means  to  ascertain  the  existence  of  the  defects, 
and  that  if  such  means  had  been  used,  the  weakened  and  unsafe 
condition  of  the  boiler  would  have  been  discovered.     There  was  no 


CHAP.   XXV.]  THE  NON- ASSIGNABLE  DUTIES.  751 

negligence  on  the  part  of  "Van  Vechten,  the  master  mechanic  in  charge 
of  the  shops.  He  gave  proper  instructions  for  the  thorough  examina- 
tion and  repair  of  the  engine  and  boiler.  It  was  impracticable  for 
him  to  make  personal  examination  of  all  the  engines  which  came  to 
the  shops  for  repairs.  The  subordinates  to  whom  he  committed  the 
duty  in  this  case  were  competent  from  their  character  and  experience 
to  perform  it.  Nor  was  there  any  negligence  on  the  part  of  the  com- 
pany in  the  employment  of  Van  Vechten  as  general  superintendent 
of  repairs,  or  in  omitting  to  make  suitable  regulations  for  the  conduct 
of  this  business.  Van  Vechten  was  a  man  fully  qualified  for  his 
position.  The  immediate  negligence  in  this  case  was  that  of  the 
mechanics,  to  whom  the  doing  of  the  repairs  was  committed,  in 
omitting  the  duty  of  thorough  inspection  and  examination  as  directed 
by  Van  Vechten. 

Upon  this  state  of  facts  the  question  arises  as  to  the  liability 
of  the  defendant.  It  is  claimed  that  the  negligence  of  the  mechanics 
was  the  negligence  of  co-employees  with  the  intestate,  in  the  service 
of  the  company,  for  which  the  defendant,  the  common  employer,  is 
not  responsible. 

We  are  of  opinion  that  the  cases  of  Flike  v.  Boston  and  Albany 
Eailroad  Company,  53  N.  Y.  549 ;  Booth  v.  Same,  73  Id.  38 ;  and 
Mehan  v.  Syracuse,  Bing.  and  New  York  Eailroad  Company,  73  Id. 
585,  are  decisive  against  this  contention.  We  understand  the  prin- 
ciple of  these  cases  to  be,  that  acts  which  the  master,  as  such,  is 
bound  to  perform  for  the  safety  and  protection  of  his  employees, 
cannot  be  delegated  so  as  to  exonerate  the  former  from  liability  to 
a  servant,  who  is  injured  by  the  omission  to  perform  the  act  or  duty, 
or  by  its  negligent  performance,  whether  the  non-feasance  or  mis- 
feasance is  that  of  a  superior  officer,  agent,  or  servant,  or  of  a  sub- 
ordinate or  inferior  agent  or  servant  to  whom  the  doing  of  the  act, 
or  the  performance  of  the  duty,  has  been  committed.  In  either  case 
in  respect  to  such  act  or  duty  the  servant  who  undertakes,  or  omits 
to  perform  it,  is  the  representative  of  the  master,  and  not  a  mere 
co-servant  with  the  one  who  sustains  the  injury.  The  act  or  omission 
is  the  act  or  omission  of  the  master  irrespective  of  the  grade  of  the 
servant  whose  negligence  caused  the  injury,  or  of  the  fact  whether 
it  was  or  was  not  practicable  for  the  master  to  act  personally,  or 
whether  he  did  or  did  not  do  all  that  he  personally  could  do  by  select- 
ing competent  servants,  or  otherwise  to  secure  the  safety  of  his 
employees. 

It  is  sometimes  difficult  to  determine  what  is  the  master's  duty 
within  the  rule.  But  when  it  is  ascertained  that  the  negligence  by 
which  an  employee  is  injured  relates  to  this  duty,  then  there  is  no 
middle  ground,  and  the  case  cannot  be  determined  upon  any  dis- 
tinction founded  upon  the  particular  grade,  office,  or  function  of 
the  negligent  servant  or  agent.    In  the  Flike  Case,  it  was  probably 


762  MURPHY   V.   BOSTON   &   ALBANY   R.    CO.        [CHAP.   XXV. 

impracticable  for  Rockefeller  to  be  present  at  the  starting  of  each 
train,  and  to  see  personally  that  when  it  left  the  yard  it  had  its 
full  equipment  of  men.  He  appointed  sufficient  brakemen  to  go  with 
the  train  which  parted  and  caused  the  injury,  and  one  of  them  neg- 
lected to  go.  The  negligence  of  the  company  consisted  in  not  seeing 
to  it  that  the  train  was  sufficiently  manned  when  it  started,  and  it 
did  not  excuse  itself  by  showing  that  it  had  promulgated  proper 
rules  and  appointed  a  head  conductor  of  this  business,  or  that  the 
train  would  have  been  fully  manned  if  Loftus,  the  brakeman,  had 
performed  his  duty.  In  this  case  the  neglect  to  maintain  the  engine 
in  proper  repair  was  the  neglect  of  a  duty  devolving  upon  the  master. 
The  duty  of  maintaining  machinery  in  repair  for  the  protection  and 
safety  of  employees  is  the  same  in  kind  as  the  duty  of  furnishing  a 
safe  and  proper  machine  in  the  first  instance.  Ford  v.  Fitchburg 
R.  R.  Co.,  110  Mass.  240. 

But  the  duty  of  the  master  to  furnish  suitable  and  safe  machinery, 
and  to  keep  the  same  in  repair,  is  relative  and  not  absolute.  He  is 
only  bound  by  himself  and  his  agents  to  exercise  due  care  to  that 
end.  In  this  case  the  jury  have  found  upon  sufficient  evidence  that 
there  was  negligence  in  respect  to  the  inspection  and  repair  of  the 
boiler,  and  we  think  the  judgment  must  be  affirmed.  .  .  . 

We  have  examined  the  exceptions  to  evidence,  and  do  not  find  any 
which  call  for  a  reversal  of  the  judgment. 

All  concur  except  Folger,  J.,  not  voting. 

Judgment  affirmed. 


MURPHY   V.   BOSTON   AND   ALBANY   R.    CO. 
88  N.  Y.  146.     1882. 

This  action  was  brought  to  recover  damages  for  the  alleged  negli- 
gence of  defendant  causing  the  death  of  Francis  Murphy,  plaintiff's 
intestate.    Judgment  for  defendant. 

Andrews,  Ch.  J.  The  boiler  of  the  defendant's  locomotive  "  Sac- 
ramento" exploded  while  in  the  repair  shop  of  the  company,  at 
East  Albany,  on  the  6th  of  August,  1879,  killing  Francis  Murphy, 
the  plaintiff's  intestate,  and  one  Smith,  who  were  engaged  at  the 
time,  by  the  direction  of  the  master  mechanic  of  the  shop,  in  setting 
the  safety-valve,  so  as  to  allow  a  pressure  in  the  boiler  of  one  hun- 
dred and  thirty-three  pounds  to  the  square  inch,  which  was  the 
highest  limit  of  steam  permitted  in  the  use  of  locomotives  on  the  road. 
The  locomotive  was  taken  to  the  shop  for  repairs  about  two  weeks 
before  the  explosion,  having  been  reported  by  the  engineer  as  pound- 
ing in  the  driving  boxes,  leaking,  etc.  It  was  the  rule  of  the  shop, 
known  to  all  the  employees,  that  when  an  engine  came  into  the  shop 


CHAP.   XXV.]  THE   NON-ASSIGNABLE  DUTIES.  753 

for  repairs,  all  defects  reported  should  be  repaired  and  an  examina- 
tion made  to  see  if  any  other  defects  could  be  discovered,  and  if  there 
were  any  of  a  slight  nature  they  should  be  repaired  first,  and  reported 
afterwards;  but  if  of  a  serioiis  nature,  they  were  to  be  reported  first 
and  repaired  afterwards.  In  the  ordinary  course,  a  locomotive  sent 
to  the  shop  for  repairs  was  first  put  into  the  hands  of  the  boilermakers 
for  the  examination  and  repair  of  the  boiler,  then  into  the  hands  of 
the  machinists,  and  finally  into  the  hands  of  mechanics  to  set  the 
safety-valve,  which  was  the  last  thing  to  be  done  before  the  locomotive 
was  sent  on  to  the  road.  This  last  work  was  usually  committed  to 
the  intestate  and  Smith,  who  were  mechanics,  and  had  for  several 
years  been  employed  in  the  repair  shop,  and  who,  when  the  particular 
work  of  setting  the  safety-valve  of  a  locomotive  was  to  be  done,  were 
assigned  to  this  duty.  On  examination  of  the  locomotive  "  Sacra- 
mento "  after  the  explosion,  it  was  found  that  twenty  of  the  stay- 
bolts  on  the  right  side  of  the  boiler  were  broken,  the  fractures  being 
apparently  old,  and  the  right  side  sheet  near  the  mud  ring,  which 
was  originally  five-sixteenths  of  an  inch  in  thickness,  had  been 
channeled,  or  worn  down  to  one-sixteenth  of  an  inch.  The  evidence 
tended  to  show  that  the  explosion  was  attributable  to  these  defects, 
which  rendered  the  boiler  incapable  of  sustaining  the  pressure 
directed  to  be  put  upon  it,  and  that  the  defects  would  have  been  dis- 
covered by  the  boilermakers,  if  they  had  performed  their  duty  to 
make  thorough  inspection  of  the  boiler  with  a  view  to  ascertain 
,  whether  any  defects  existed.  The  judge  nonsuited  the  plaintiff,  and 
it  must  be  assumed  that  the  negligence  of  the  boilermakers  was  one 
of  the  efficient  causes  of  the  accident.  The  boilermakers  were  com- 
petent and  skilled  mechanics,  and  they  had  reported  to  the  master- 
mechanic  that  the  locomotive  was  "  all-  right,"  before  the  intestate 
and  Smith  were  directed  to  set  the  valve ;  the  intestate  and  Smith  had 
no  notice  of  the  defects  in  the  boiler. 

Upon  these  facts  the  question  arises  whether  the  company  is  liable 
for  the  death  of  Murphy,  resulting  from  the  negligence,  primarily, 
of  the  boilermakers.  They  and  the  intestate  were  co-servants  of  the 
defendant,  and  it  is  the  general  rule  of  law  that  the  master  is  not 
responsible  to  one  servant  for  an  injury  occasioned  by  the  negligence 
of  a  co-servant  of  the  common  employer.  To  this  rule  there  are  two 
well-defined  exceptions:  first,  where  the  servant,  whose  negligence 
caused  the  injury,  was  an  unfit  and  incompetent  person  to  be  in- 
trusted with  the  duty  to  which  he  was  assigned,  and  the  accident 
resulted  from  his  incompetency  and  unfitness.  Laning  v.  N".  Y.  Cen- 
tral Eailroad  Co.,  49  N.  Y.  521 ;  second,  where  the  accident  resulted 
from  unsafe  and  imperfect  machinery  and  appliances  furnished  for 
the  use  of  the  servant  in  the  master's  business.  Laning  v.  N.  Y. 
Central  Eailroad  Co.,  supra;  Flike  v.  Boston  and  Albany  R.  R.  Co., 
53  N.  Y.  550;  Fuller  v.  Jewett,  80  Id.  46. 

48 


754  MUEPHT  V.  BOSTON   ft  ALBANY  E.   CO.       [CHAP.  XXV. 

These  exceptions,  however,  are  subject  to  the  qualification  that 
the  duty  imposed  upon  the  master  to  employ  competent  servants,  and 
furnish  fit  and  safe  machinery,  is  not  absolute,  but  relative.  The 
master  does  not  guarantee  either  the  competency  of  the  co-servants 
or  the  safety  of  the  machinery  and  appliances.  He  undertakes  to 
use  due  and  reasonable  care  in  both  respects,  and  that  there  shall 
be  no  negligence  on  his  part  or  on  the  part  of  any  person  intrusted 
by  him  with  the  business  of  employing  servants  and  providing  safe 
machinery,  etc.  It  is  plain  that  the  master's  liability,  if  sustained 
in  this  case,  rests  upon  the  second  exception  stated,  viz. :  the  negligent 
furnishing  of  an  unsafe  machine  for  the  use  of  the  intestate.  The 
competency  of  the  boilermakers  and  machinists  employed  in  repairing 
the  locomotive  before  it  came  to  the  hands  of  the  intestate  and  Smith 
is  not  questioned.  The  rules  of  the  shop  were  comprehensive,  and 
required  a  full  examination  by  the  boilermakers  and  machinists  to 
discover  defects.  Their  negligence  is. not  a  ground  of  action  against 
the  master,  unless,  as  between  the  intestate  and  the  master,  it  was 
the  master's  duty  to  ascertain,  before  the  intestate'  and  Smith  were 
put  to  setting  the  valve,  that  the  boiler  was  safe  and  would  bear  the 
required  pressure.  We  think  this  case  is  not  within  the  principle 
which  holds  the  master  responsible  for  unsafe  machinery  furnished 
for  the  use  of  the  servant.  The  case  of  Fuller  v.  Jewett,  80  IST.  Y. 
46,  is  a  distinct  authority  for  the  proposition,  that  if  this  locomotive 
had  been  sent  out  from  the  shop,  and  afterward  exploded  while  in  use 
on  the  defendant's  road,  injuring  the  engineer  or  other  servants  of 
the  defendant,  the  company  would  have  been  responsible.  The 
negligence  of  the  boilermakers  in  the  case  supposed  would  be  re- 
garded as  the  negligence  of  the  master.  The  risk  of  the  negligence 
of  the  repairers  and  machinists  would  not  be  considered  one  of  the 
risks  which  a  servant  in  whose  hands  the  machine  was  subsequently 
placed  for  use  had  assumed.  The  placing  of  the  locomotive  on  the 
road  for  use  would  be  an  assurance  that  it  was  fit  and  safe ;  and  an 
engineer,  or  other  servant  employed  on  the  train,  could  not  be  sup- 
posed to  have  known  the  condition  of  the  locomotive,  or  whether  the 
men  employed  to  make  repairs  were  competent,  or  the  manner  in 
which  the  work  had  been  done.  In  this  case  Murphy  was  not,  we 
think,  a  servant  in  whose  hands  the  locomotive  was  placed  by  the 
defendant  for  use  within  the  principle  of  Fuller  v.  Jewett,  and  like 
cases.  The  locomotive  was  sent  to  the  repair  shop  in  order  that  it 
might  be  made  fit  for  use.  The  mechanics  in  the  repair  shop,  in- 
cluding the  intestate,  were  employed  for  the  purpose  of  repairing 
defective  locomotives.  The  intestate  and  his  co-laborers  in  the  shop 
were  engaged  in  the  same  department  of  service,  worked  under  the 
same  control,  and  in  the  case  in  question,  the  boilermakers  and  other 
mechanics  were  employed  to  effect  the  same  object,  viz. :  the  repara- 
tion of  the  "  Sacramento."     It  is  true  that  the  work  was  done  in 


CJIAP.   XXV.]  THE  NON-ASSIGNABLE   DUTIES.  755 

successive  stages,  and  different  parts  of  the  work  were  intrusted  to 
different  persons.  The  refitting  of  the  valve  and  its  adjustment  to 
the  required  pressure  were  the  hist  things  to  be  done.  This  work  was, 
however,  as  necessary  in  fitting  the  locomotive  for  use,  as  the  work 
of  the  boilermakers  or  machinists.  The  intestate  had  an  oppor- 
tunity to  inform  himself  of  the  competency  of  his  co-servants  in  the 
shop.  He  doubtless  supposed  that  the  boilermakers  had  performed 
their  duty;  unfortunately  they  had  neglected  it.  But  we  think  the 
risk  of  their  negligence  was  one  of  the  risks  he  assumed  as  incident 
to  his  employment  in  the  common  service.  It  would  be  too  close 
a  construction  to  hold  that  the  repairs  were  completed  when  his 
work  commenced,  and  that  the  setting  of  the  valve  was  an  independent 
and  disconnected  service  in  respect  to  a  machine  put  into  his  hands 
by  the  company  for  use.  This  claim  of  the  plaintiff's  counsel  would 
make  the  master  responsible  to  each  successive  employee  engaged  on 
the  repairs  for  any  negligence  of  a  co-employee,  whose  work  was 
prior  in  point  of  time,  although  done  in  effecting  the  common  pur- 
pose in  which  all  were  engaged.  This  would  we  think  be  extending 
the  liability  of  the  master  further  than  is  warranted  by  the  adjudged 
cases. 

The  case  is  not  free  from  diflBculty,  but  we  are  of  opinion  that  the 
nonsuit  was  properly  granted,  and  the  judgment  should,  therefore, 
be  affirmed. 

All  concur,  except  Tracy,  J.,  absent. 

Judgment  affirmed.^ 


CONE    V.    DELAWARE,   L.    &   W.    RAILROAD    CO. 

81  N.  Y.  206.     1880. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme 
Court,  in  the  Fourth  Judicial  Department,  affirming  a  judgment  in 
favor  of  the  plaintiff  entered  upon  a  verdict  and  affirming  an  order 
denying  a  motion  for  a  new  trial.     (Reported  below,  15  Hun,  172.) 

This  action  was  brought  to  recover  damages  for  injuries  alleged 
to  have  been  occasioned  by  defendant's  negligence. 

The  plaintiff  was  in  the  employment  of  the  defendant  as  a  car 
repairer.  While  engaged  in  examining  a  car,  with  a  view  to  repairing 
it,  which  was  standing  on  a  side  track  of  the  defendant's  at  Rich- 
field Springs,  another  car,  which  was  also  standing  on  the  same 
track,  a  few  feet  distant  from  the  car  which  the  plaintiff  was  exam- 
ining, and  which  was  attached  to  an  engine,  took  motion  from  the 
engine,  and  ran  against  him  in  such  a  manner  that  he  was  caught 
between  the  two  cars  and  seriously  injured.     The  evidence  tended 

•  Accord  :  Neagle  t>.  Syracuse,  etc.,  R.,  185  N.  Y.  270. 


756  CONE  V.   DEL.,   L.   &   W.    E.   E.    CO.  [OHAP.   XXV. 

to  show  that  the  engine  took  motion  in  consequence  of  steam  escaping 
into  the  cylinder  through  a  leaky  valve,  and  that  the  defect  in  the 
valve,  also  the  fact  that  the  engine  was  much  out  of  repair,  had  been 
known  for  some  time  by  the  defendant's  superintendent  and  master 
mechanic,  but  was  not  known  by  the  plaintiff.  There  was  also  evi- 
dence tending  to  show  that  the  defendant's  engineer,  who  was  in 
charge  of  the  engine,  left  it  standing  on  the  track  while  the  plaintiff 
was  examining  the  car,  that  he  was  aware  of  the  defect  in  the  valve, 
and  omitted  to  open  the  cylinder  cocks  upon  the  engine,  which  if 
it  had  been  done  would  have  prevented  the  engine  from  taking  motion 
in  consequence  of  the  leakage  of  steam.  Further  facts  appear  in 
the  opinion. 

Danforth,  J.  As  between  the  plaintiff  and  the  defendant,  it  was 
the  duty  of  the  latter  to  furnish  its  employees  for  use  in  the  prose- 
cution of  its  business  good  and  suitable  machinery,  and  keep  it  in 
repair.  Wright  v.  N.  Y.  C.  R.  R.  Co.,  35  N".  Y.  562;  Laning  v. 
N.  Y.  C.  R.  R.  Co.,  49  Id.  521;  Flike  v.  B.  &  A.  R.  R.  Co.,  53 
Id.  549 ;  Corcoran  v.  Holbrook,  59  Id.  519.  It  was  also  its  duty  to 
furnish  for  the  management  of  such  machinery  careful  and  trust- 
worthy servants;  and  if  these  conditions  were  fulfilled,  the  plaintiff, 
although  injured  by  the  negligence  of  his  fellow  servant,  could  main- 
tain no  action  against  their  common  principal.  Wright  v.  N.  Y. 
C.  R.  R.  Co.,  supra;  Coon  v.  S.  &  F.  R.  R.  Co.,  5  N.  Y.  492.  But 
that  is  not  the  case  here.  The  plaintiff  was  not  injured  by  the  negli- 
gence of  his  co-employee  while  managing  good  and  suitable  ma- 
chinery. The  defendant  failed  to  supply  machinery  of  that  character. 
The  engine  in  question  was,  in  many  important  particulars,  in  bad 
condition ;  its  fire-box  was  burned  out ;  its  stay-bolts  had  given  way ; 
its  cylinders  needed  boring  out;  its  valves  facing;  it  leaked  badly, 
and  its  flues  were  defective;  and  coming  nearer  to  the  immediate 
cause  of  the  injury  inflicted  upon  the  plaintiff,  it  was  found  that  its 
throttle-valve  leaked  and  the  thread  upon  the  screw  which  serves 
to  hold  the  reverse  bar  in  place,  and  thus  controls  the  motion  of  the 
engine,  was  so  worn  as  to  be  useless.  As  a  natural  and  necessary 
consequence  of  the  defects  last  mentioned,  the  steam  escaped  from  the 
boiler  into  the  cylinders,  the  engine  was  put  in  motion,  and  as  might 
have  been  expected,  the  accident  occurred  of  which  the  plaintiff  now 
complains.  But  more  than  this,  the  master  mechanic,  and  also  the 
general  superintendent  of  the  road,  the  superior  oflBcers  directly 
representing  the  defendant,  had  been  notified  of  these  defects,  but 
nevertheless  directed  the  engine  to  be  kept  in  use,  "for"  (as  one 
of  them  said)  "they  were  short  of  power  and  had  nothing  to  put 
in  its  place."  So  far  this  is  the  plaintiff's  case,  and  is  conclusive 
against  the  defendant  unless  answered,  and  what  is  its  defence? 
Why,  as  I  understand  it,  it  is  that  the  engine  was  furnished  with 
cylinder  cocks;  tliat  these  cocks,  if  opened,  would  have  allowed  the 


CHAP.    XXV.]  THE   NON-ASSIGNABLE   DUTIES.  757 

steam  to  escape,  thus  preventing  its  accumulation  in  the  cylinder 
and  its  pressure  upon  the  piston;  that  the  engineer  omitted  to  open 
the  cocks,  and  was,  therefore,  guilty  of  negligence;  that  it  was  this 
negligence  which  caused  the  injury,  and  so  the  defendant  is  exon- 
erated !  But  the  cylinder  cocks  were  part  of  a  perfect  machine,  they 
were  not  added  to  supply  the  defects,  or  any  of  them  to  which  I  have 
above  called  attention.  Therefore  the  defendant's  contention  comes 
to  this :  We  concede  that  we  failed  in  our  duty,  we  did  not  supply 
a  suitable  machine,  but  our  servant,  the  engineer,  could,  notwith- 
standing, have  so  managed  that  the  defect  should  have  caused  no 
harm. 

If  this  doctrine  is  accepted  it  will  loosen  the  rule  of  responsibility 
which  now  bears  none  too  closely  upon  corporate  conduct.  It  will 
seldom  happen  that  unusual  care  on  the  part  of  an  engineer  would 
not  prevent  an  accident.  In  this  case  he  might  have  opened  the 
cocks,  or  blocked  the  wheels,  or  with  extreme  care  so  separated  the 
engine  from  its  train  that  the  two  should  occupy  separate  tracks. 
It  now  seems  that  it  would  have  been  well  to  have  done  one  or  the 
other  of  these  things.  His  omission  to  do  so  may  have  been  negli- 
gence toward  the  defendant,  but  it  does  not  remove  the  responsi- 
bility which  attached  to  it,  to  furnish  good  and  suitable  machinery, 
or  place  it  upon  a  subordinate  whose  duty  is  to  be  measured  by  the 
degree  of  skill  necessary  for  its  management,  and  who  is  not  called 
upon  to  make  good  the  want  of  corporate  care  and  attention. 

The  case  is  not  one  for  the  application  of  the  doctrine  of  equiva- 
lents. Nor  could  the  jury  be  permitted  to  inquire  whether  the 
exercise  of  extra  diligence  or  skill  on  the  part  of  the  defendant's 
servant,  the  engineer,  would  not  have  neutralized  the  defendant's 
own  negligence.  This  would  require  them  to  determine  the  "  com- 
parative negligence "  of  master  and  servant,  and  "  strike  a  balance 
of  negligence,"  which,  even  as  between  plaintiff  and  defendant,  is 
not  permitted.  Wilds  v.  H.  R.  R.  R.  Co.,  23  How.  492.  Neither 
upon  principle  nor  authority  can  it  be  held  that  negligence  of  the 
servant  in  using  imperfect  machinery  excuses  the  principal  from  lia- 
bility to  a  co-employee  for  an  injury  which  could  not  have  happened 
had  the  machinery  been  suitable  for  the  use  to  which  it  was  applied. 
Had  the  injury  resulted  solely  from  the  servant's  negligence  the  case 
would  have  been  different.  Wright  v.  N.  Y.  C.  R.  R.  Co.,  supra. 
And  so  the  trial  judge  held.  But  the  jury  found  that  it  did  not,  and 
the  judgment  rendered  upon  the  verdict  was  properly  affirmed.  .  .  . 

Judgment  affirmed. 


768  CREGAN   V.    MARSTON.  [CHAP,   XXV. 

CREGAN   V.    MARSTON. 

126  N.  Y.  508.     1891. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme  Court 
in  the  Second  Judicial  Department,  entered  upon  an  order  which 
affirmed  a  judgment  in  favor  of  plaintiff  entered  upon  a  verdict  and 
affirmed  an  order  denying  a  motion  for  a  new  trial. 

Finch,  J.  The  plaintiff's  intestate  was  killed  while  loading  coal 
into  buckets,  which  were  raised  from  the  hold  of  a  vessel  by  the  aid 
of  a  derrick.  The  rope  used  for  that  purpose,  and  which  lifted  the 
loads  to  the  control  of  the  gaff,  suddenly  parted,  and  the  falling  mass 
crushed  the  deceased,  who  died  almost  immediately  from  his  injuries. 
There  is  no  question  of  contributory  negligence  in  the  case,  and  not 
the  least  doubt  that  the  defendants  did  their  full  duty,  so  far  as  it 
consisted  in  the  selection  and  supply  of  the  rope  used. 

The  controversy  is  thus  narrowed  by  the  facts  to  the  single  in- 
quiry, whose  duty  it  was  to  observe  and  examine  the  condition  of 
the  rope,  and  change  it  when  so  worn  that  it  became  unsafe.  The 
lengths  of  rope  used  in  the  derrick  were  called  "  falls."  The  ordinary 
limit  of  safety  in  their  use  was  proved  to  have  been  from  14  to  20 
days ;  rarely  less  than  that,  and  sometimes  considerably  more.  Every- 
body connected  with  the  business  knew  the  consequences  of  excessive 
use,  and  the  necessity  of  frequent  changes  of  the  falls,  but  at  varying 
and  uncertain  periods  of  time.  The  fall,  which  was  sound  and  safe 
in  the  beginning  of  a  morning's  work,  might  become  frayed  and 
dangerous  before  night,  and  if  it  did,  would  become  so  before  the 
eyes  of  all  the  workmen  dependent  upon  it  for  its  use;  and  that  is 
true,  because  the  proof  given  by  the  plaintiff  shows  clearly  that  the 
rope  which  is  sound  originally  becomes  pulpy  internally  only  when 
use  has  affected  it  externally. 

Now,  it  is  conceded  that  the  defendants  kept  on  hand,  and  ready 
for  use,  at  any  moment,  an  adequate  supply  of  these  falls,  and  of  the 
best  and  most  approved  character.  After  purchasing  a  coil  of  rope 
measuring  about  1000  feet  in  length,  it  was  at  once  cut  up  into  falls, 
the  ends  were  tied  to  keep  them  from  unraveling,  each  fall  was  marked 
with  a  tag  stating  its  length,  and  they  were  then  hung  up  in  a  dry 
storeroom,  under  lock  and  key,  and  so  kept  ready  for  immediate  use, 
and  meantime  protected  from  the  weather  or  from  injury.  If  one 
was  wanted,  word  was  sent  to  the  office,  and  the  new  fall  at  once  sup- 
plied for  use  at  the  dock.  Usually  the  engineer  or  his  assistant  made 
the  application,  but  anybody  engaged  in  the  work  could  give  the 
notice  and  get  the  new  fall.  It  does  not  appear  that  any  such  appli- 
cation, coming  from  any  of  the  workmen;  was  ever  unheeded  or 
refused.    The  workmen,  therefore,  were  left  in  a  position  of  perfect 


CHAP.   XXV.]  THE  NON-ASSIGNABLE   DUTIES.  759 

safety  as  to  the  sufficiency  of  the  falls,  against  everything  save  their 
own  negligence  or  error  of  judgment.  The  rope  was  swinging  before 
their  eyes,  and  would  disclose  its  approaching  weakness  on  the  sur- 
face before  it  became  rotten  or  pulpy  within,  and  they  were  able  to 
know  how  long  it  had  been  used,  and  so  whether  prudence  required 
it  to  be  changed.  They  were  at  liberty,  and  knew  they  were  at 
liberty,  to  supplant  one  which  exhibited  marks  of  weakness  with  an- 
other, both  new  and  sufficient,  from  the  supply  kept  on  hand.  They 
were  in  the  daily  habit  of  observing  its  condition,  and  it  was  specially 
the  custom  of  the  engineer  to  do  so.  He  had  examined  it  a  day  or 
two  before  the  accident,  and  deemed  it  safe. 

On  this  state  of  facts,  the  court  charged  that  it  was  the  duty  of 
the  master  to  the  servants  to  watch  the  use  of  the  rope  by  them,  and 
its  changes  of  condition,  that  the  engineer  was  his  agent  and  deputy 
for  such  purpose;  and  that  the  negligence  of  the  engineer,  if  it 
existed,  was  that  of  the  master.  The  doctrine  at  once  renders  un- 
explainable  all  the  line  of  cases  in  which  some  defect  in  a  machine 
has  occurred  from  its  use,  and  the  master  has  been  held  freed  from 
responsibility  if  the  machine  furnished  was  originally  safe,  and  he 
neither  knew  nor  ought  to  have  known  of  the  existence  of  the  defect; 
for  it  puts  the  duty  of  daily  watch  and  discovery  on  him,  and  so 
requires  no  notice  or  complaint  or  lapse  of  time  to  put  him  in  default. 

I  think  the  doctrine  asserted  was  an  extension  of  the  master's  duty 
beyond  its  natural  and  proper  limits.  Probably  the  existing  rule  was 
founded  upon  the  truth  that  certain  things  essential  to  the  safety  of 
the  servants  must  necessaril}'^,  in  the  management  of  the  business, 
emanate  from  the  master,  and  remain  in  his  absolute  control,  and  so 
the  servants  should  not  be  responsible  to  one  another  for  defects 
which  they  could  not  repair  for  lack  both  of  authority  and  means. 
The  servant  cannot  furnish  the  machines.  That  is  the  master's  right 
and  duty.  But  the  servant  who  uses  them  can  and  should  keep  them 
in  order  for  their  proper  and  safe  daily  use,  when  furnished  with 
the  necessary  means  of  so  doing,  and  when  perfectly  capable  of  cor- 
recting the  defect. 

It  is  undoubtedly  true,  as  we  have  often  said,  that  it  is  the  duty 
of  a  master  to  keep  a  machine  or  appliance  in  order,  and  that  he 
cannot  delegate  the  duty  so  as  to  escape  responsibility.  But  that  is 
a  general  rule,  and  has  its  qualifications  and  limitations.  One  of 
those  is  that  it  is  not  the  master's  duty  to  repair  defects  arising 
in  the  daily  use  of  the  appliance,  for  which  proper  and  suitable 
materials  are  supplied,  and  which  may  easily  be  remedied  by  the 
workmen,  and  are  not  of  a  pennanent  character,  or  requiring  the 
help  of  skilled  mechanics.  An  apt  illustration  will  be  found  in 
the  case  of  McGee  v.  Cordage  Co.,  139  Mass.  445.  The  machine  was 
used  for  the  passage  of  hemp  over  heckle  pins.  These  sometimes  be- 
came bent  so  that  the  fibre  clogged,  and  then  the  machine  was  stopped. 


760  CREQAN    V.   MAESTON.  [CHAP.   XXV. 

and  the  workmen  drove  out  the  bent  pin  and  inserted  a  new  one 
from  a  supply  furnished  by  the  master  for  that  purpose.  The  change 
was  held  to  be,  not  the  duty  of  the  master,  but  that  of  the  servants, 
and  an  ordinary  detail  of  their  daily  duty.  It  would  have  been 
almost  absurd  to  have  held  otherwise.  So  in  Webber  v.  Piper,  109 
N.  Y.  496,  the  master  had  supplied  the  means  of  sharpening  saws 
which  had  become  dull,  and  duplicate  saws  to  take  their  place  when 
removed,  and  had  assigned  the  duty  of  removal  to  one  of  his  servants 
whose  neglect,  which  resulted  in  an  injury,  was  held  to  be  that  of 
a  fellow  servant.  The  same  doctrine  was  declared  in  Johnson  v. 
Tow-Boat  Co.,  135  Mass.  209,  a  case  almost  exactly  like  the  one 
before  us,  and  in  which  the  injury  resulted  from  the  use  by  the 
servants  of  an  unsound  rope,  instead  of  substituting  a  new  one 
which  the  master  had  supplied.  In  that  ease  it  was  said  that,  the 
master  "  having  provided  sufficient  appliances,  a  part  of  which  re- 
quired occasional  renewal  from  the  wear  and  tear  of  the  use  for  which 
it  was  intended,  and  provided  sufficient  means  for  such  renewal,  and 
employed  Moore  to  have  the  superintendence  of  the  workmen  and 
the  apparatus  and  appliances,  the  use  of  the  means  provided  for 
keeping  the  tackle  in  suitable  condition  was  as  truly  a  part  of  Moore's 
duty  as  servant  as  was  the  use  of  the  apparatus  for  the  direct  purpose 
of  the  business,  and  in  performing  that  duty  he  was  a  fellow  servant 
with  the  plaintiff."  The  doctrine  thus  declared  was  not  at  all  re- 
pudiated, or  even  modified,  by  the  later  case  of  Daley  v.  Eailroad 
Co.,  147  Mass.  101,  upon  which  the  general  term  rely.  In  that  case 
the  operatives  who  managed  the  machine  had  no  duty  or  responsi- 
bility as  to  a  change  of  the  ropes,  but  were  dependent  upon  the 
judgment  and  consent  of  two  other  employees,  who  were  not  claimed 
to  be  fellow  servants  of  the  workmen;  and  that  case  draws  clearly 
the  distinctions  between  an  original  defect  in  the  rope  provided  and 
one  occurring  from  its  use,  and  between  the  duty  of  ordinary  repairs 
devolving  upon  the  servants  and  those  of  a  permanent  or  special 
character,  which  attach  to  ihe  master.  What  was  said  as  to  the 
custody  of  the  ropes  had  some  force  in  that  case,  but  has  no  applica- 
tion to  the  one  before  us.  Here  there  does  not  appear  to  have  been 
at  the  dock  any  suitable  place  for  keeping  the  spare  falls,  and  it  was 
neither  negligence  nor  imprudence  to  put  them  under  cover,  or  pro- 
tect them  by  a  lock,  so  long  as  they  were  at  all  times  subject  to  the 
needs  or  requirements  of  the  workmen. 

The  cases  cited,  and  their  doctrine,  appear  to  be  founded  upon 
what  is  determined  to  be  the  implied  contract  relation  between  the 
master  and  servant.  Their  mutual  duties  grow  out  of  that  relation, 
and  change  and  vary  as  it  is  changed  or  varied  by  the  facts  which 
indicate  and  measure  it.  Where  those  facts  show  that,  in  the  under- 
standing of  both  parties,  a  class  of  ordinary  repairs  are  to  be  made 
by  the  servants  with  materials  furnished  by  the  master  for  that 


CHAP.   XXV.]  THE  NON-ASSIGNABLE  DUTIES.  761 

express  purpose;  that  they  and  he  regard  it  as  a  detail  of  their  own 
work;  that  it  is  something  entirely  within  their  capacity  and  not 
dependent  upon  the  skill  of  a  special  expert;  and  that  the  necessity 
springs  from  their  daily  use  of  the  appliance,  occurs  at  different  and 
unknown  periods  in  their  service,  and  is  open  to  their  observation 
in  the  absence  of  the  master,  —  the  inference  is  inevitable  that  the 
contract  relation  between  the  parties  makes  it  a  duty  of  the  servants, 
and  a  detail  of  their  work,  to  correct  the  defect  when  it  arises,  with 
the  materials  furnished. 

The  cases  cited  by  the  respondent  do  not  touch  the  question.  In 
one  the  defect  was  in  an  engine,  which  only  an  expert  could  repair, 
and  for  which  the  servant  was  furnished  with  no  materials.  Fuller 
V.  Jewett,  80  N.  Y.  50.  In  one  the  chain  of  an  elevator  had  grown 
thin,  and  no  new  one  was  supplied.  Corcoran  v.  Holbrook,  59  N.  Y. 
518.  In  two  the  cars  or  the  platform  were  defective  when  supplied 
by  the  master.  Gottlieb  v.  Eailroad,  100  N.  Y.  462;  Benzing  v. 
Steinway,  101  N.  Y.  547.  And  in  one  the  master  permitted  the  use 
of  a  rope  which  was  rotten  from  a  year's  exposure  to  the  weather, 
and  without  supplying  a  new  one.  Baker  i'.  Railroad  Co.,  95  Pa.  St. 
211.  In  Cone  v.  Eailroad  Co.,  81  N.  Y.  208,  the  defect  was  in  the 
engine  which  the  servants  using  it  could  not  be  required  or  expected 
to  repair,  and  in  Murray  v.  Usher,  117  N.  Y.  543,  the  platform  fell 
from  an  original  defect  in  construction. 

In  the  present  case  the  jnaster  exercised  all  the  reasonable  care 
required.  The  rope  had  not  been  in  use  so  long  as  to  charge  the 
master  with  knowledge  that  it  had  become  unsafe,  and  he  had  a 
right  to  assume  that  the  servants  would  take  no  needless  risks.  So 
far,  even,  as  the  engineer  is  concerned,  there  seems  to  have  been 
on  his  part  an  error  of  judgment,  but  not  necessarily  any  negligence 
in  the  performance  cf  his  duty. 

The  judgment  should  be  reversed,  and  a  new  trial  granted,  with 
costs  to  abide  the  event. 

All  concur. 


KINCICOTTI   V.    O'BRIEN   CONTRACTING   CO. 
77  Conn.  617.     1905. 

Action  by  Bianca  Rincicotti,  administratrix,  against  the  John 
J.  O'Brien  Contracting  Company.  From  a  judgment  in  favor  of 
plaintiff,  defendant  appeals. 

The  defendant  was  engaged  in  building  a  stone  retaining  wall 
along  the  Naugatuck  river,  in  Ansonia.  One  Toole  was  the  super- 
intendent of  the  work,  and  had  charge  thereof  and  of  the  men  em- 
ployed upon  it.    The  plaintiff's  intestate  was  a  mason  so  employed, 


762  RINCICOTTI   V.   O'BRIEN    CONTR.    CO.  [CHAP.   XXV. 

and  foreman  of  the  masons.  For  the  prosecution  of  the  work  the 
defendant  used  a  heavy  steam-hoisting  derrick,  having  a  mast  50  feet 
in  height  and  a  boom  58  feet  long,  operated  by  what  is  known  as 
a  "  bull  wheel."  By  its  use  the  defendant  was  enabled  to  lift  the 
heavy  blocks  of  stone,  of  which  the  wall  was  constructed,  from  the 
cars,  and  swing  them  into  position  upon  the  wall.  The  derrick  rested 
upon  a  foundation  prepared  for  it,  and  was  supported  in  its  upright 
position  by  twisted  wire  cables  which  radiated  in  various  directions 
from  the  top  of  the  mast  to  secure  points,  where  they  were  fastened. 
As  the  construction  of  the  wall  progressed  so  far  that  the  boom  would 
no  longer  serve  at  the  point  where  stones  were  desired  to  be  placed, 
the  derrick  was  moved  and  relocated.  Work  upon  the  wall  had  been 
in  process  for  some  time  when  the  intestate  received  his  injuries,  and 
two  such  relocations  had  been  made, 

Toole  was  an  expert  derrick  rigger,  and  it  was  a  part  of  his  duty, 
and  his  duty  alone,  to  take  care  and  charge  of  the  derrick,  including 
its  locations,  removals,  and  preparation  for  use.  The  masons  had  no 
duty  in  that  regard. 

At  the  time  of  the  last  location  of  the  derrick,  which,  like  the 
others,  was  made  under  Toole's  direction,  and  about  one  month  prior 
to  the  accident,  it  was  supported  in  position  by  six  cables,  varying 
from  186  to  413  feet  in  length.  One  of  them  was  360  feet  in 
length,  and  extended  from  the  masthead  across  the  river,  where 
it  was  made  fast  to  a  tree.  Owing  to  the  distance  which  this 
cable  had  in  the  former  locations  of  the  derrick  been  required 
to  span,  Toole  had  spliced  it.  The  new  conditions  necessitated  the 
same  extension,  and  the  spliced  cable  was  used,  the  point  of  splicing 
being  about  15  or  20  feet  from  the  tree  and  across  the  river.  The 
splice  was  made  by  doubling  back  the  end  of  each  piece  of  the  cable, 
inserting  one  of  the  loops  thus  formed  into  the  other,  and  fastening 
each,  and  thus  doubled  back  to  the  cable  by  iron  clamps  of  approved 
design.  Interlocked  loops  were  thus  made.  As  the  result  of  the  use 
of  the  derrick  after  the  splicing,  and  the  constant  strain  and  friction 
at  the  points  of  contact  within  the  loops,  these  parts  of  the  cable 
had,  before  the  accident,  become  chafed  and  worn,  and  some  of  the 
strands  had  parted. 

At  the  time  of  the  accident  the  derrick  was  being  used  to  carry  a 
stone  into  position.  When  the  stone  was  in  mid-air,  said  cable  parted 
at  the  worn  and  weakened  part  within  one  of  the  loops.  As  a  result, 
the  derrick  fell,  striking  the  intestate. 

Toole  never  at  any  time  inspected  the  cable  to  ascertain  its  condi- 
tion. 

'In  making  cable  splicings  such  as  have  been  described,  it  is  cus- 
tomary and  prudent  to  place  a  device  called  a  "thimble"  in  each 
of  the  loops  in  such  manner  as  to  furnish  the  bearing  in  both  direc- 
tions.    By  the  use  of  the  thimbles  the  cables  are  prevented  from 


CHAP,' XXV.]  THE  NON-ASSIGNABLE   DUTIES.  763 

bending  as  sharply  as  they  otherwise  would,  the  tension  is  distributed, 
and  the  friction  and  chafing  obviated.  Added  strength  and  dura- 
bility are  thus  obtained. 

There  were  suitable  thimbles  furnished  by  the  defendant  in  a 
chest  upon  or  near  the  premises,  which  fact  was  known  to  Toole. 

Prentice^  J.  (after  stating  the  facts).  The  plaintiff's  intestate, 
while  acting  as  the  defendant's  servant,  received  injuries,  from  which 
he  died,  by  reason  of  the  fall  of  an  instrumentality  used  in  the  work 
upon  which  he  was  employed.  The  injuries  were  not  occasioned  by 
any  negligence  in  the  use  of  the  instrumentality.  The  instrumen- 
tality was  not  one  whose  construction,  preparation,  adaptation  for  use, 
care,  or  inspection  entered  into  the  performance  of  the  intestate's 
work  or  duty,  or  was  an  incident  of  it.  Fraser  v.  Red  River  Lumber 
Co.,  45  Minn.  235 ;  Bums  v.  Sennett  &  Miller,  99  Cal.  363 ;  Robinson 
V.  Blake  Mfg.  Co.,  143  Mass.  528;  Richards  v.  Hayes  (Sup.),  45 
N.  Y.  Supp.  234;  Labatt  on  Master  &  Servant,  §  589.  It  was  a 
mechanical  apparatus  furnished  by  the  master  to  co-operate  with  and 
facilitate  the  intestate  and  his  fellow  masons  in  the  work  upon  which 
they  were  engaged.  The  duty  of  the  defendant  as  master,  under  such 
circumstances  and  in  respect  to  such  an  instrumentality*  was  to  use 
reasonable  care  to  provide  one  which  should  be  reasonably  safe  for  the 
work  to  which  it  was  to  be  put.  McEUigott  v.  Randolph,  61  Conn. 
157;  Gerrish  v.  Xew  Haven  Ice  Co.,  63  Conn.  16.  This  duty  was 
a  continuing  one,  and  included  that  of  maintenance.  Hough  v. 
Railway  Co.,  100  U.  S.  213;  Shanny  v.  Androscoggin  Mills,  66  Me. 
420;  Ford  v.  Fitchburg  R.  Co.,  110  Mass.  240;  Tierney  v.  Min- 
neapolis, etc.,  R.  Co.,  33  Minn.  311 ;  Indiana  Car  Co.  v.  Parker,  100 
Ind.  181;  Moore  v.  Wabash,  St.  Louis  &  P.  R.  Co.,  85  Mo.  588; 
Bailey  v.  Rome,  W.  &  0.  R.  Co.,  139  N".  Y.  302.  The  duty  of  main- 
^  tenance  necessarily  involved  that  of  reasonable  inspection  and  repair. 
■  Union  Pacific  R.  Co.  v.  Daniels,  152  U.  S.  634 ;  Tierney  v.  Minne- 
apolis, etc.,  R.  Co.,  33  Minn.  311;  Armour  v.  Brazeau,  191  111.  117; 
Comben  v.  Belleville  Stone  Co.,  59  N.  J.  Law,  226 ;  Munch  v.  Great 
Northern  Ry.  Co.,  75  Minn.  61 ;  Louisville,  etc.,  R.  Co.  v.  Utz,  133 
Ind.  265 ;  Richmond  &  Danville  R.  Co.  v.  Burnett,  88  Va.  538. 

The  defendant  says  that  the  cause  of  the  accident  was  the  failure 
to  insert  thimbles  in  the  loops  made  in  splicing  the  cable,  and  argues 
therefrom  that  as  their  absence  was  due  to  the  failure  of  Toole,  the 
superintendent,  to  insert  them,  and  as  the  defendant  had  provided 
sufl&cient  thimbles  to  be  used  when  needed,  it  had  not  failed  in  its 
duty  as  master,  and  the  intestate's  injuries  were  the  consequence  of 
the  negligence  of  Toole  in  respect  to  his  service  as  the  intestate's 
fellow  servant. 

This  contention  is  unsound  in  both  its  premise  and  the  conclusiona 
drawn  therefrom.  It  is  enough  for  our  present  purpose  to  pursue  at 
length  the  first  of  these  dual  propositions.    In  thus  limiting  our  dia- 


764  RINCICOTTI    V.   o'bEIEN    CONTR.    CO.  [chap.    XXV. 

cussion,  however,  we  do  not  wish  our  silence  to  imply  our  assent  to 
the  legal  principle  which,  in  so  far  at  least  as  maintenance  and  repair 
are  concerned,  is  vigorously  urged  upon  us,  to  wit,  that  a  master 
upon  whom  rests  the  duty  of  using  reasonable  care  to  provide  and 
maintain  for  the  use  of  his  servants  in  their  work  reasonably  safe 
mechanical  instrumentalities,  may  perform  that  duty  by  furnishing 
to  a  fit  and  competent  agent  the  materials  or  parts  out  of  or  by  means 
of  which  the  instrumentality  as  a  working  entity  can  be  either  created 
or  maintained,  and  that  for  the  shortcomings  of  the  agent  in  his  utili- 
zation or  failure  to  utilize  this  material  or  these  parts  the  master 
assumes  no  responsibility.  In  so  far  as  the  defendant's  contention 
assumes  that  there  is  a  difference  as  respects  the  master's  duty  be- 
tween construction  and  maintenance,  it  is  without  foundation.  To 
whatever  extent  the  contention  is  carried,  it  also  involves  principles 
which  have  had  the  repeated  disapproval  of  this  court.  The  master's 
duty  requires  performance.  It  may  be  performed  in  person,  or  by 
one  delegated  to  that  end.  In  either  event,  the  thing  required  must 
be  done.  Delegation  to  a  fit  and  competent  agent  is  not  sufficient. 
Wilson  V.  Willimantic  Linen  Co.,  50  Conn.  433 ;  McElligott  v.  Ran- 
dolph, 61  Conn.  157 ;  Gerrish  v.  New  Haven  Ice  Co.,  63  Conn.  16. 

Let  us  return  now  to  the  defendant's  premise  that  the  proximate 
cause  of  the  injury  complained  of  was  the  superintendent's  failure  to 
place  thimbles  in  the  loops  of  the  splice.  It  is  doubtless  true  that 
had  thimbles  been  inserted  in  making  the  splice,  the  cables  would  not 
by  use  have  become  so  worn  and  defective  at  the  points  of  tension 
that  they  would  have  parted  when  they  did.  To  this  extent  the  failure 
to  insert  the  thimbles  was  without  doubt  the  cause  —  but  the  remote 
one  —  of  the  accident.  The  proximate  cause,  however,  was  the  worn 
and  defective  condition  into  which  the  cables  had  been  suffered  to 
lapse  by  being  used  for  a  considerable  period  of  time  without  such 
repair  or  replacement  as  was  necessary,  in  view  of  the  way  in  which 
the  splice  was  made,  to  maintain  the  requisite  condition  of  strength. 
The  cable  as  spliced  was  not  able  to  stand  as  great  a  strain  as  one 
spliced  with  thimbles,  but  it  does  not  appear  that  without  them  it  was 
not  originally  sufficiently  strong  to  do  the  work  required  of  it.  Its 
original  strength  became  dissipated  as  the  consequence  of  wear  and 
tear  and  a  failure  in  the  duty  of  maintenance.  The  worn  and  weak- 
ened condition  which  resulted  may  not  have  been  known  to  the  defend- 
ant or  its  superintendent,  and  apparently  was  not,  as  it  is  found  that 
no  inspection  was  made.  But  that  is  of  no  legal  consequence,  since  it 
is  found  that  it  was  so  apparent  that  an  inspection  would  have  re- 
vealed it.  In  other  words,  the  failure  which  was  the  true  proximate 
cause  of  the  parting  of  the  cable,  and  thus  of  the  intestate's  injuries, 
was  one  in  the  master's  duty  of  reasonable  inspection.^    The  manner 

»  See  Koehler  v.  N.  Y.  Steam  Co.,  183  N.  Y.  1. 


CHAP.   XXV.]  THE  NON-ASSIGXABLE   DUTIES.  765 

of  the  splice  was  known,  for  Toole  made  it ;  the  consequences  thereon 
of  wear  were  palpable,  and  therefore  such  as  the  defendant  and  Toole 
were  bound  to  anticipate.  The  duty  of  inspection  was  one  to  be 
exercised  in  the  light  of  these  conditions.  The  facts,  therefore,  dis- 
close a  clear  failure  on  the  part  of  the  defendant,  as  master,  in  the 
performance  of  its  duty  towards  the  intestate. 

If  it  be  suggested  that  the  cable  was  by  the  manner  of  the  splice 
inherently  weak  and  thus  defective,  the  master  is  not  thereby  exoner- 
ated. In  that  event,  his  failure  in  the  duty  of  using  reasonable  care 
to  provide  reasonably  safe  instrumentalities  only  assumes  a  slightly 
different  aspect ;  but  it  is  the  same  duty.  The  duty  of  the  master  is 
the  same  in  its  essence  whether  it,  in  a  given  case,  assumes  the  imme- 
diate form  of  original  provision,  maintenance,  or  inspection  as  an 
incident  of  maintenance.  All  are  involved  in  the  general  duty  of 
provision,  which,  as  we  have  seen,  is  a  continuing  one  and  an 
unchanging  one.  .  .  .  Judgment  affirmed. 


ABEL   V.   PRESIDENT,    ETC.,   D.    &   H.    C.    CO. 
^       103  N.  Y.  581.     1886. 

Appeal  from  judgment  of  the  General  Term  of  the  Supreme 
Court,  in  the  Third  Judicial  Department,  in  favor  of  defendant,  en- 
tered upon  an  order  made  December  2,  1885,  which  overruled  excep- 
tions and  directed  judgment  on  an  order  dismissing  plaintiff's  com- 
plaint on  trial. 

This  was  an  action  to  recover  damages  for  alleged  negligence, 
causing  the  death  of  Perry  Abel,  plaintiff's  testator. 

Per  Curiam.  The  plaintiff's  testator  was  a  car  repairer  in  the  em- 
ploy of  ttie  defendant,  and  while  under  one  of  its  cars  standing  upon 
a  side  track  engaged  in  making  repairs,  its  employees,  using  an  en- 
gine, carelessly  backed  a  car  against  it,  and  thus  he  came  to  his  death. 

The  principal  claim  on  the  part  of  the  plaintiff  is  that  the  evidence 
tended  to  show  that  the  defendant  had  not  made  and  promulgated 
proper  rules  for  the  government  of  its  employees,  and  hence  that  its 
negligence  in  that  respect  should  have  been  submitted  to  the  jury. 

The  law  imposes  upon  a  railroad  company  the  duty  to  its  employees 
of  diligence  and  care,  not  only  to  furnish  proper  and  reasonably  safe 
appliances  and  machinery  and  skilled  and  careful  co-employees,  but 
also  to  make  and  promulgate  rules  which,  if  faithfully  observed,  will 
give  reasonable  protection  to  the  emplovees.  Slater  v.  Jewett,  85 
N.  Y.  61;  Besel  v.  N.  Y.  C.  &  H.  R.  R.  R.  Co.,  70  Id.  171;  Sheehan 
V.  Same,  91  Id.  339 ;  Dana  v.  Same,  92  Id.  639. 

It  appears  that  the  managers  of  some  railroads  in  this  country 
have  adopted  a  rule  substantially  like  this :  "  A  blue  flag  by  day  and 


766  ABEL   V.   PRESv   ETC.,   D.    &   H.    C.    CO.  [CHAP.   XXV. 

blue  light  by  night,  placed  in  the  draw-head  or  on  the  platform  or 
step  of  a  car  at  the  end  of  a  train,  or  car  standing  on  a  main  track 
or  siding,  denotes  that  car  repairmen  are  at  work  underneath.  The 
car  or  train  thus  protected  must  not  be  coupled  or  moved  until  the 
blue  signal  is  removed  by  the  repairmen."  This  is  certainly  a  very 
efficient  rule,  and  if  faithfully  and  carefully  observed  would  give 
reasonable  protection  to  repairmen. 

The  plaintiff  contends  that  it  was,  under  the  circumstances  of  this 
case,  a  question  for  the  jury  to  determine  whether  the  defendant,  for 
the  protection  of  its  repairmen  engaged  in  a  peculiarly  hazardous 
work,  should  not  have  promulgated  such  a  rule  or  one  substantially  as 
efficient.  The  only  rule  the  defendant  had  made  bearing  upon  this 
case  was  as  follows :  "  A  red  flag  by  day  or  a  red  lantern  by  night,  or 
any  signal  violently  given,  are  signals  of  danger,  on  perceiving  which 
the  train  must  be  brought  to  a  full  stop  as  soon  as  possible,  and  not 
proceed  until  it  can  be  done  with  safety." 

This  rule  seems  from  its  phraseology  to  have  been  mainly  if  not 
exclusively  intended  for  the  government  of  moving  trains,  and  was 
not  very  well  adapted  for  the  protection  of  men  under  stationary  cars, 
upon  side  tracks,  engaged  in  making  repairs.  There  was  no  rule  pro- 
hibiting the  removal  of  the  signal,  and  the  signal  was  not  intended 
exclusively  for  the  protection  of  such  men,  nor  did  it  give  notice  that 
human  life  was  in  danger. 

It  matters  not  that  there  was  a  custom  or  rule  among  the  repair- 
men in  the  employ  of  the  defendant  at  Mechanicville  that  they  should 
place  a  red  flag  at  each  end  of  the  cars  which  they  were  repairing.  It 
does  not  appear  that  that  rule  was  regularly  promulgated  by  the 
defendant,  or  that  obedience  to  it  was  required  by  the  defendant ;  nor 
does  it  appear  that  it  was  printed  or  generally  known  to  the  engineers 
engaged  in  running  trains. 

It  appears  that  it  was  a  common  and  frequent  occurrence  for 
engines  and  cars  to  be  switched  upon  the  side  tracks  at  Mechanicville 
without  any  check  or  hindrance  from  any  one  having  control  of  the 
tracks  at  that  place,  and  thus  the  repairmen  engaged  under  and  about 
cars  seem  to  have  been  exposed  to  constant  peril. 

We  do  not  perceive  how  it  was  possible  to  say,  as  matter  of  law, 
that  the  rules  of  the  defendant  were  proper  and  sufficient  for  the 
protection  of  its  repairmen,  and  that  it  should  not  have  taken  greater 
precautions  by  rules  or  otherwise  for  their  safety. 

We  think  the  facts  should  have  been  submitted  to  the  jury 'and 
that  the  nonsuit  was  improper. 

The  judgment  should  be  reversed  and  a  new  trial  ordered,  costs 
to  abide  event. 

All  concur,  except  Eael,  J.,  not  voting,  and  Miller,  J.,  taking  no 
part.  Judgment  revenged. 


CHAP.   XXV.]  THE  NON-ASSIGNABLE  DUTIES.  767 

EASTWOOD   V.   EETSOF    MINING    CO. 
86  Hun  (N.  Y.)  91.     1895. 

Appeal  by  the  defendant,  the  Retsof  Mining  Company,  from  a 
judgment  of  the  Supreme  Court  in  favor  of  the  plaintiff,  entered  in 
the  office  of  the  clerk  of  the  county  of  Livingston,  upon  the  verdict 
of  a  jury,  rendered  after  a  trial  at  the  Livingston  Circuit,  and  also 
from  an  order  entered  in  said  clerk's  office,  denying  the  defendant's 
motion  for  a  new  trial  made  upon  the  minutes. 

Present  —  Dwight,  P.  J.,  Lewis,  and  Bradley,  JJ. 

Judgment  and  order  affirmed  on  opinion  of  Rdmsey,  J.,  at  Circuit. 

The  opinion  was  as  follows : 

RuMSEY,  J.  The  plaintiff's  intestate  was  a  boy  about  fifteen  years 
old,  and  at  the  time  of  his  death  was  in  the  employ  of  the  defendant, 
in  a  room  known  as  the  screening  room.  The  business  of  the  defend- 
ant was  mining  salt  and  preparing  it  for  market. 

Just  off  the  room  in  which  the  plaintiff's  intestate  was  at  work 
was  a  large  bin,  holding  many  tons  of  salt,  into  which  the  salt  of  a 
certain  grade  was  delivered  from  the  machinery  of  the  works.  At 
certain  times,  when  the  bin  became  nearly  full,  it  was  necessary  that 
some  one  should  go  into  it  for  the  purpose  of  freeing  the  mouth  of 
the  chute,  through  which  the  salt  was  delivered  into  the  bin.  To  do 
this  it  was  necessary  to  shovel  away  the  salt  which  was  accumulated 
at  the  mouth  of  the  chute  leading  into  the  bin.  When  the  bin  be- 
came full,  the  salt  was  drawn  off  by  three  chutes  in  the  bottom  of  it. 
The  drawing  off  of  the  salt  through  these  chutes  caused  the  salt  on 
the  top  to  settle  with  more  or  less  rapidity,  depending  entirely  upon 
the  manner  in  which  it  was  drawn  off.  It  appeared  from  the  testi- 
mony, and  was  not  disputed,  that  if  one  was  in  the  bin  at  the  time 
the  salt  was  drawn  off  and  his  feet  became  entangled  in  the  salt  which 
was  running  down  to  the  lower  chutes,  it  was  very  difficult  for  him 
to  free  himself,  and  if  he  got  into  the  salt  above  his  knees  it  was 
almost  impossible  for  him  to  get  out  unassisted.  The  chutes  through 
which  the  salt  was  delivered  out  of  the  bin  were  situated  in  a  row 
along  one  side  of  it  at  the  bottom.  Hanging  from  the  top  of  the 
bin  were  ropes  which  one  standing  in  the  bin  might  seize  if  Ke  was 
in  danger  of  being  engulfed  in  the  salt,  and  thereby  drag  himself  out. 
On  two  or  three  sides  of  the  bin,  and  at  a  height  at  which  it  would 
be  necessary  for  a  man  to  stand  in  shoveling  the  salt,  was  a  narrow 
platform  of  one  plank  a  foot  or  so  wide,  upon  which  a  man  might 
stand  when  he  shoveled  the  salt  away  from  the  mouth  of  the  chute. 
It  appeared  in  the  evidence,  however,  that  the  men  who  were  engaged 
in  shoveling  in  the  bin  were  not  accustomed  to  stand  upon  this  plank, 
which  was  not  in  every  respect  convenient  for  that  purpose,  but  stood 


768  EASTWOOD  V.   RETSOF   MINING   CO.  [CHAP.   XXV. 

upon  the  salt,  and  that  there  was  no  rule  of  the  corporation  forbidding 
them  to  do  so  if  they  saw  fit.  On  the  day  on  which  the  plaintiff's 
intestate  met  his  death,  so  much  salt  was  in  the  bin  that  the  delivery 
from  the  chute  into  the  bin  was  impeded  by  the  accumulation  of  salt 
at  its  mouth,  and  the  plaintiff's  intestate,  at  his  own  request,  was 
sent  into  the  bin  for  the  purpose  of  shoveling  it  away. 

It  appears  that  he  had  never  been  there  before  for  that  purpose. 
He  went  into  the  bin,  remained  there  a  few  minutes,  came  out  for 
some  purpose,  went  back  and  went  to  work. 

Shortly  after  he  went  back  the  second  time  directions  were  given 
by  the  proper  person  that  the  salt  should  be  drawn  off  from  the  bin, 
and  one  or  more  chutes  at  the  bottom  of  the  bin  were  opened  for  that 
purpose.  After  this  had  been  going  on  for  a  few  moments  the  plain- 
tiff's intestate  was  missed.  Search  was  made  for  him,  but  he  was 
nowhere  to  be  found  in  the  building.  It  was  then  surmised  that  per- 
haps he  might  have  been  engulfed  in  the  salt,  which  was  rapidly 
drawn  off,  and  after  a  large  portion  of  the  salt  in  the  bin  had  been 
drawn  off,  the  plaintiff's  body  made  its  appearance  at  one  of  the 
chutes  and  he  was  taken  out  dead.  .  .  . 

There  was  some  dispute  upon  the  evidence  whether  the  bin  was 
sufficiently  light  for  a  person  inside  to  see  conveniently  about  it.  It 
appears  upon  the  testimony  offered  by  the  plaintiff  that  the  bin  was 
quite  dark,  while  the  testimony  of  the  defendant  tended  to  show 
that  one  standing  in  the  bottom  of  the  bin,  on  an  ordinarily  clear  day, 
could  read  ordinary  handwriting  without  difficulty.  In  discussing 
the  case,  however,  it  must  be  assumed  that  the  jury  might  have  found 
the  fact  in  this  regard  to  be  as  claimed  by  the  plaintiff.  It  is  thought, 
however,  that  the  fact  itself  is  not  of  much  importance. 

The  foregoing  are  all  the  facts  which  it  is  thought  necessary  to 
advert  to  or  which  were  material  upon  the  claim  of  negligence  of  the 
defendant. 

It  is  claimed  by  the  plaintiff  that  this  negligence  consisted  in  the 
failure  to  make  rules  on  the  part  of  the  corporation  which  would 
regulate  the  drawing  off  of  the  salt  when  the  men  were  in  the  bin, 
or  which  would  provide  for  the  safety  of  men  who  had  occasion  to  be 
there  when  that  process  took  place. 

The  question  was  submitted  to  the  jury  whether  the  defendant  was 
negligent  in  failing  to  provide  rules  upon  that  subject,  which  should 
protect  the  men  who  were  in  its  employ.  The  defendant  excepted  to 
the  submission  of  that  question  to  the  jury,  but  took  no  exception 
to  the  manner  in  which  the  submission  was  made.  .  .  . 

It  is  quite  clear  in  this  case  that  the  question,  whether  or  not  the 
case  was  a  proper  one  for  requiring  the  defendant  to  establish  rules 
for  the  government  of  its  employees  in  drawing  salt  from  this  bin 
when  men  were  engaged  inside  of  it,  was  one  as  to  which  reasonable 
men  might  differ.    The  rule  is  well  settled  that  it  is  the  duty  of  all 


CHAP.   XXV.]  THE  NON-ASSIGNABLE   DUTIES.  769 

persons  and  corporations  having  many  men  in  their  employ  in  the 
same  business,  to  make  and  promulgate  rules  which,  if  observed,  will 
afford  protection  to  the  employees.  This  is  the  more  necessary  where 
the  manner  of  doing  business  is  such  that  the  danger  or  safety  of  an 
employee  at  any  given  time  depends  upon  the  way  in  which  some 
other  employee  is  engaged  at  the  same  time.  In  such  a  case,  where 
the  action  of  one  employee  may  make  that  dangerous,  which,  if  he 
took  no  action,  would  be  safe,  it  is  undoubtedly  the  duty  of  the 
common  employer  to  make  such  rules  as  will  enable  the  person  whose 
safety  is  put  at  risk,  to  be  advised  of  the  danger  and  to  avoid  it. 
(Abel  V.  D.  &  H.  C.  Co.,  103  N.  Y.  581;  Slater  v.  Jewett,  85  Id.  61; 
McGovern  v.  C.  V.  E.  E.  Co.,  123  Id.  281,  289.)  To  be  sure  the  com- 
pany is  only  required  to  make  rules  to  guard  against  such  accidents 
and  casualties  as  may  reasonably  be  foreseen,  and  it  is  not  bound  to 
use  more  than  reasonable  care  in  deciding  whether  rules  are  neces- 
sary. (Berrigan  v.  N.  Y.,  L.  E.  &  W.  E.  E.  Co.,  131  X.  Y.  582.)  In 
every  case  its  duty  is  performed  by  the  exercise  of  reasonable  care  in 
deciding  in  the  first  place  whether  rules  are  necessary,  and,  in  the 
second  place,  in  making  such  rules  as  appear  to  be  sufficient.  But  the 
question  in  either  case  may  be  for  the  jury,  whether,  in  the  first 
place,  the  company  took  reasonable  care  to  conclude  whether  rules 
were  necessary,  or,  in  the  second  place,  if  they  were,  whether  the  rules 
thus  made  were  proper  for  the  purpose  for  which  they  were  intended. 
AMien  the  question  is,  whether  the  case  was  one  in  which  rules  ought 
to  have  been  made,  the  fact  that  other  people  or  corporations  engaged 
in  the  same  business  had  or  had  not  found  it  necessary  to  make  rules 
upon  that  subject,  is  one  which  might  well  be  considered.  But  the 
fact  that  no  such  rules  had  been  made  is  not  conclusive  against  the 
necessity  of  making  them.  It  is  simply  a  fact  to  be  considered. 
"Where  the  business  is  complicated,  the  circumstances  are  those  which 
do  not  occur  often  and  the  danger  is  not  serious,  it  may  well  be  that 
the  fact  that  other  people  engaged  in  the  same  business  have  found 
no  necessity  for  making  rules  for  the  particular  case  may  be  almost 
conclusive  that  such  rules  are  not  necessary.  But  where  the  circum- 
stances are  such  that  any  person  can  see  what  might  happen  in  a 
given  case,  and  the  danger  is  plain  and  obvious,  the  jurors  might  be 
at  liberty  to  infer  that  rules  to  protect  the  employee  were  necessary, 
although  they  had  no  experience  in  the  particular  business,  and  al- 
though there  was  no  evidence  that  other  corporations  in  the  same 
business  had  made  rules  for  such  cases.  (Morgan  v.  H.  R.  0.  &  I. 
Co.,  133  N.  Y.  666.) 

In  the  case  at  bar,  it  is  evident  that  if  a  man  were  in  the  bin  at 
work,  standing  upon  the  salt,  he  might  very  easily  be  engulfed  so  as 
to  be  unable  to  extricate  himself,  if  the  chutes  below  were  suddenly 
opened.  Starting  from  that  fact,  which  is  undisputed,  tlic  inference 
might  very  well  be  drawn  that  a  well-devised  set  of  rules,  giving 

49     • 


770  LOUISVILLE  &   N.   R.    CO.   V.   MILLEB.  [CHAP.   XXV. 

■warning  to  the  men  who  were  in  the  bin,  or  forbidding  the  drawing 
off  of  salt  when  any  one  was  in  the  bin,  would  conduce  greatly  to  the 
safety  of  the  men  who  had  occasion  to  be  there.  There  is  nothing  in 
the  evidence  which  would  lead  the  jury  to  believe  that  such  a  rule 
was  impossible  or  even  difficult  to  enforce,  and  it  is  quite  clear  that 
such  a  rule  might  be  of  great  use  in  insuring  the  safety  of  the  men  who 
had  occasion  to  be  in  the  bin.  For  these  reasons  I  think  that  it  was 
proper  for  the  jury  to  consider  upon  the  question  of  the  defendant's 
negligence,  the  failure  to  make  rules  for  the  government  of  its 
employees  in  this  regard.  .  .  . 

I  am  of  the  opinion  that  upon  the  whole  it  was  not  error  to  submit 
the  ease  to  the  jury,  and  that  a  new  trial  must  be  denied. 


LOUISVILLE   &   N.   E.    CO.   v.   MILLEK. 

104  Fed.  (C.  C.  A.,  6th  Ct.)    124.     1900. 

In  Error  to  the  Circuit  Court  of  the  United  States  for  the  Middle 
District  of  Tennessee. 

The  defendant  in  error,  J.  E.  Miller,  recovered  judgment  against 
the  plaintiff  in  error,  the  Louisville  &  Nashville  Kailroad  Company, 
for  an  injury  sustained  while  making  a  coupling.  Miller  was  a 
switchman  who  had  been  in  the  service  of  the  company  but  four  days 
when  he  sustained  the  injury  for  which  he  sued.  He  had  had  no 
experience  as  a  s^-itchman  prior  to  his  employment,  except  five  days 
of  what  is  called  "cubbing,"  by  which  is  meant  that  he  had  been 
assigned,  on  his  own  application,  and  without  pay,  to  a  switching 
crew,  as  a  volunteer  who  wished  to  learn  and  qualify  himself  for  em- 
ployment as  a  switchman.  By  importunity  he  induced  two  foremen 
of  switching  crews  to  recommend  him  by  letters  to  the  yardmaster 
as  competent  for  service  as  a  regular  switchman.  The  yardmaster, 
with  full  knowledge  of  this  limited  experience,  employed  him  as  a 
switchman,  and  assigned  him  to  duty  in  a  switching  crew  without 
any  other  or  further  advice,  warning,  or  instruction.  Miller  testified 
that,  when  he  presented  the  letters  of  the  foremen  with  whom  he  had 
cubbed  to  the  yardmaster,  the  latter  refused  him  employment,  saying 
that  he  would  not  be  qualified  with  less  than  a  month's  service  as  a 
cub,  but  that  on  the  next  day  he  was  given  the  place  of  a  man  who 
had  in  the  meantime  been  injured  and  disabled.  The  yardmaster 
denies  this  view  of  the  matter,  and  says  he  accepted  the  certificates 
produced  by  Miller  as  evidence  of  his  capacity,  and  employed  him  in 
good  faith,  as  capable  of  fully  understanding  and  appreciating  the 
dangers  usual  and  incident  to  the  occupation.  There  was  evidence 
tending  to  show  that  not  less  than  four  weeks'  experience  as  a  cub 


CHAP.    XXV.]  THE   NON-ASSIGNABLE  DUTIES.  771 

or  leamer  would  acquaint  one  with  the  hazards  and  risks  of  such  a 
position,  and  give  him  that  degree  of  skill,  judgment,  and  caution 
requisite  to  a  full  appreciation  of  the  risks  to  be  encountered,  and  how 
best  to  guard  against  them.  The  coupling  which  Miller  undertook  to 
make  was,  as  he  testifies,  new  to  him,  and  could  only  be  done  safely  in 
a  particular  way,  about  which  he  knew  nothing.  At  the  close  of  the 
evidence  the  plaintiff  in  error  moved  the  court  to  instruct  the  jury  to 
find  for  the  defendant.  This  was  overruled,  and  an  exception  saved. 
The  court  then  submitted  the  case  to  the  jury  upon  the  single  ques- 
tion as  to  whether  the  railroad  company  had  been  negligent  in  per- 
mitting the  plaintiff  to  engage  in  so  dangerous  an  occupation  as  that 
of  a  yard  switchman,  in  view  of  the  knowledge  possessed  by  its  rep- 
resentative, the  yardmaster,  as  to  the  experience  and  training  he  had 
had,  without  further  instruction  concerning  the  risks  incident  to  the 
occupation,  and  how  best  to  make  a  coupling  such  as  that  he  was 
making  when  injured.  The  charge  upon  this  subject  was  full  and 
clear,  and  no  exception  was  taken.  There  were  a  verdict  and  a  judg- 
ment against  the  railroad  company,  which  has  sued  out  this  writ  of 
error. 

Before  Lurton,  Day,  and  Severens,  C.  JJ. 

LuKTON,  C.  J.,  after  making  the  foregoing  statement  of  the  case, 
delivered  the  opinion  of  the  court. 

The  case  was  submitted  to  the  jury  upon  the  theory  that  the  plain- 
tiff was  inexperienced  in  the  work  of  a  switchman,  and  that  this  was 
known  to  the  railroad  company;  that,  having  been  employed  as  a 
switchman,  and  assigned  to  work  in  the  general  yard  of  the  company, 
where  he  was  likely  to  be  required  to  handle  foreign  cars,  with  and 
without  bumpers  or  deadheads,  and  having  coupling  apparatus  of 
many  styles,  the  company  was  bound  to  qualify  him  for  such  service 
by  giving  him  instruction  adequate  to  the  hazards  and  risks  incident 
to  the  occupation,  and  by  which  he  might  perform  his  duties  in  the 
way  safest  for  himself.  The  instructions  to  the  jury  in  respect  to 
this  issue  were  full  and  clear,  and  no  exception  was  taken  thereto. 
The  learned  coimsel  for  plaintiff  in  error  say,  however,  that  no  such 
issue  should  have  been  submitted,  and  that  it  was  error  to  deny  the 
request  for  a  peremptory  instruction  for  the  defendant.  This  conten- 
tion is  primarily  based  upon  the  proposition  that  the  plaintiff  applied 
for  employment  as  a  switchman,  and  that  he  must  be,  therefore,  taken 
to  have  assumed  all  the  risks  incident  to  the  usual  duties  of  a  switch- 
man, and  that,  even  if  the  company  knew  of  his  inexperience,  he 
cannot  escape  the  consequences  of  his  own  ignorance  or  inexperieoce, 
having  voluntarily  solicited  the  particular  employment  in  which  he 
was  injured.  This  view  of  the  law  is  seemingly  supported  by  the 
cases  of  Dysinger  v.  Kailway  Co.,  93  Mich.  646,  and  McDermott  v. 
Eailroad  Co.,  56  Kan.  319.  We  do  not  assent  to  the  reasoning  of 
these  cases,  nor  are  they  in  accordance  with  the  great  weight  of 


H172  LOUISVILLE  4  N.   B.   CO.  V.   MILLEE.  [CHAP.   XXV. 

authority.  It  is  illogical  to  say  that  a  servant  impliedly  assumes  the 
hazards  and  risks  of  an  occupation  which  are  known  to  the  master, 
but  which  the  master  knows  are  unknown  to  the  servant,  unless  the 
dangers  are  so  obvious  that  even  an  inexperienced  man  could  not  fail 
to  escape  them  by  the  exercise  of  ordinar}'^  care.  The  law  is  now  well 
settled  that  the  duty  of  cautioning  and  qualifying  an  inexperienced 
servant  in  a  dangerous  occupation  applies  as  well  to  one  whose  dis- 
qualification arises  from  a  want  of  that  degree  of  experience  requisite 
to  the  cautious  and  skilful  discharge  of  the  duties  incident  to  a 
dangerous  occupation  with  safety  to  the  operator,  as  when  the  dis- 
qualification is  due  to  youthfulness,  feebleness,  or  general  incapacity. 
If  the  master  has  notice  of  the  dangers  likely  to  be  encountered,  and 
notice  that  the  servant  is  inexperienced,  or  for  any  other  reason  dis- 
qualified, he  comes  under  an  obligation  to  use  reasonable  care  in  cau- 
tioning and  instructing  such  servant  in  respect  to  the  dangers  he  will 
encounter,  and  how  best  to  discharge  his  duty.  Shear.  &  E.  Neg.  (5th 
ed.)  §  219  a;  Brennan  v.  Gordon,  118  N.  Y.  489;  Whitelaw  v. 
Railroad  Co.,  16  Lea,  391,  397;  Sullivan  v.  Manufacturing  Co.,  113 
Mass.  396;  Railway  Co.  v.  Frawley,  110  Ind.  18;  Coombs  v.  Cord- 
age Co.,  102  Mass.  572,  597;  O'Connor  v.  Adams,  120  Mass.  427; 
Reynolds  v.  Railroad  Co.,  64  Vt.  66 ;  Railroad  Co.  v.  Price,  72  Miss. 
862 ;  Hughes  v.  Railway  Co.,  79  Wis.  264 ;  Campbell  v.  Eveleth,  83 
Me.  50;  Hull  v.  Hull,  78  Me.  114;  Railway  Co.  v.  Brick,  83  Tex. 
598;  Felton  v.  Girardy  (decided  by  this  court  at  this  term),  104 
Fed.  127. 

Undoubtedly,  when  one  of  apparent  maturity  and  of  average 
capacity  solicits  a  particular  line  of  work,  the  master  has  the  right, 
in  the  absence  of  information,  to  assume  that  the  applicant  is  quali- 
fied for  the  particular  work  applied  for.  It  is  only  where  such  facts 
are  brought  to  his  notice  of  the  disqualification  of  the  servant  to 
safely  encounter  dangers  known  to  him,  and  presumptively  unknown 
to  the  servant,  that  the  duty  of  cautioning  and  instructing  the  servant 
arises.^  In  the  case  at  bar  the  plaintiff  below  gave  notice  that  he  had 
had  no  experience  as  a  switchman.  The  yardmaster  then  undertook 
his  instruction,  and  assigned  him,  as  a  learner,  to  a  switching  crew. 
In  less  than  five  days  the  foremen  of  these  crews  certified  that  he  was 
qualified.  The  yardmaster,  with  full  notice  of  this  brief  tutelage, 
assigned  him  to  duty  without  further  instruction.  There  was  evi- 
dence from  which  the  jury  might  infer  that  such  an  experience  was 
wholly  inadequate  to  fit  him  to  encounter  the  dangers  he  was  likely 
to  meet.  The  particular  coupling  he  undertook  was  one  which  he  was 
likely  to  have  to  make,  and  was  a  risk  which  an  experienced  servant 
would  assume  as  an  ordinary  hazard  of  the  service.  Tuttle  v.  Rail- 
way Co.,  122  U.  S.  189 ;  Kohn  v.  McNulta,  147  U.  S.  238.    Yet  the 

^  See  Tompkins  v.  Machine  Co.,  70  N.  J.  L.  330. 


CHAP.    XXV.]  ASSUMPTION   OF   RISK.  773 

plaintiff  testified  that  he  had  had  no  instruction,  and  no  caution  in 
respect  to  such  cars  and  such  diverse  coupling  arrangements.  The 
duty  of  qualifying  a  green  or  inexperienced  servant  for  the  safe  per- 
formance of  a  new  and  dangerous  duty  is  a  personal  duty  of  the 
master,  and,  if  it  be  delegated,  the  delegate  must  be  qualified,  and 
should  not  discontinue  the  instruction  until  it  is  completed.  The 
negligence  of  the  servants  who  undertook  to  qualify  Miller  was  the 
negligence  of  the  master.  Kailroad  Co.  v.  Fort,  17  Wall.  553;  Bren- 
nan  v.  Gordon,  118  N.  Y.  489. 

We  have  carefully  considered  the  entire  evidence  found  in  this 
transcript.  It  is  enough  to  say  that,  while  the  case  was  a  close  one 
upon  the  facts  as  to  the  instruction  received  by  Miller,  yet  there  was 
such  a  conflict  between  his  testimony  and  that  of  the  other  witnesses 
that  we  are  content  to  hold  that  there  was  no  error  in  refusing  an 
instruction  to  find  a  verdict  for  the  plaintiff  in  error.  Neither  are 
we  prepared  to  say  that  the  special  dangers  incident  to  the  peculiar 
coupling  which  Miller  undertook  were  so  obvious  as  to  constitute  an 
assumption  of  the  risk.  That  he  could  see  that  each  car  was  supplied 
with  a  bumper  or  deadwood,  and  that  one  car  was  equipped  with  an 
automatic  coupler  and  the  other  with  a  skeleton  drawhead,  is  con- 
ceded. Still,  it  was  a  coupling  which  could  be  made  safely  if  done 
in  the  right  way.  What  the  right  way  was,  was  not  so  obvious  a 
matter  as  to  justify  the  court  in  holding  as  matter  of  law  that  it  was 
a  situation  about  which  Miller  needed  no  caution  and  no  instruc- 
tion. ... 

The  judgment  is  accordingly  afl&rmed. 


2.  Assumption  of  Bisk. 
FITZGEEALD   v.    CONNECTICUT   RIVER   PAPER   CO. 

155  Mass.  156.     1891. 

Tort  for  personal  injuries  occasioned  to  the  plaintiff  while  em- 
ployed by  the  defendant  in  its  paper-mill,  through  an  alleged  defect 
in  a  stairway  leading  to  and  from  the  mill.  At  the  close  of  the  evi- 
dence, the  judge  ruled,  at  the  request  of  the  defendant,  that  the  plain- 
tiff could  not  maintain  her  action,  and  directed  a  verdict  for  the 
defendant;  and  the  plaintiff  alleged  exceptions. 

Knowlton,  J.  There  was  evidence  proper  for  the  consideration 
of  the  jury  on  the  question  whether  the  defendant  corporation  was 
negligent  in  permitting  the  steps  on  which  the  plaintiff  was  injured 
to  be  slippery  and  dangerous.  It  was  its  duty  to  provide  on  its  prem- 
ises a  reasonably  safe  passage-way  for  the  use  of  its  employees  in 
going  to  and  from  their  work. 


774  FITZGERALD  V.   CONN.   E.   PAPEE   CO.  [OHAP.   XXV. 

There  was  evidence  that  fifty  women  working  in  the  same  room 
with  the  plaintiff  used  the  steps  daily ;  and  it  was  a  question  of  fact 
for  the  jury  whether  the  plaintiff  was  in  the  exercise  of  due  care  in 
trying  to  go  down  the  steps  as  she  did  at  the  time  of  the  accident. 
The  fact  that  she  knew  them  to  be  icy,  and  more  or  less  slippery  and 
dangerous,  does  not  require  us  to  hold  as  a  matter  of  law  that  she 
was  negligent  in  trying  to  go  down  them,  holding  by  the  rail,  espe- 
cially if  she  had  no  other  way  of  getting  from  the  mill. 

The  ground  on  which  the  ruling  for  the  defendant  was  made  was 
doubtless  that  the  plaintiff,  knowing  the  icy  condition  of  the  steps, 
assumed  the  risk  of  accident,  and  thereby  precluded  herself  from 
recovering. 

It  is  well  settled  that  a  servant  assumes  the  obvious  risks  of  the 
service  into  which  he  enters,  even  if  the  business  be  ever  so  dangerous, 
and  if  it  might  easily  be  conducted  more  safely  by  the  employer. 
This  is  implied  in  his  voluntary  undertaking,  and  it  comes  within  a 
principle  which  has  a  much  broader  general  application,  and  which  is 
expressed  in  the  maxim,  volenti  non  fit  injuria.  The  reason  on  which 
it  is  founded  is  that,  whatever  may  be  the  master's  general  duty  to 
conduct  his  business  safely  in  reference  to  persons  who  may  be  affected 
by  it,  he  owes  no  legal  duty  in  that  respect  to  one  who  contracts  to 
work  in  the  business  as  it  is. 

In  the  present  case  it  does  not  appear  that  the  steps  were  icy,  or 
that  there  was  any  reason  to  suppose  that  the  business  involved  a 
risk  in  regard  to  them,  when  the  plaintiff  entered  the  defendant's 
service.  It  cannot  be  held  that  when  she  made  her  contract  she 
assumed  the  risk  of  such  an  injury  as  she  afterwards  received.  We 
therefore  come  to  the  question  whether,  by  her  conduct  since,  she  has 
assumed  such  a  risk. 

The  doctrine,  volenti  non  fit  injuria,  has  not  been  very  much  dis- 
cussed in  the  cases  in  this  commonwealth,  but  it  is  well  established 
in  the  law,  and  it  has  been  repeatedly  recognized  by  this  court. 
Horton  v.  Ipswich,  12  Cush.  488;  Wilson  v.  Charlestown,  8  Allen, 
137;  Huddleston  v.  Machine-Shop,  106  Mass.  282;  Mellor  v.  Manu- 
facturing Co.,  150  Mass.  362 ;  Miner  v.  Eailroad  Co.,  153  Mass.  398 ; 
Wood  V.  Locke,  147  Mass.  604;  Lewis  v.  Railroad  Co.,  153  Mass.  73; 
Lovejoy  v.  Eailroad,  125  Mass.  79;  Yeaton  v.  Eailroad,  135  Mass. 
418;  Scanlon  v.  Eailroad  Co.,  147  Mass.  484.  In  England  it  has 
been  much  discussed,  and  the  difficulties  in  the  application  of  it  have 
frequently  been  considered  by  the  courts.  The  rule  of  law,  briefly 
stated,  is  this :  One  who  knows  of  a  danger  from  the  negligence  of 
another,  and  understands  and  appreciates  the  risk  therefrom,  and 
voluntarily  exposes  himself  to  it,  is  precluded  from  recovering  for 
an  injury  which  results  from  the  exposure.  It  has  often  been 
assumed  that  the  conduct  of  the  plaintiff  in  such  a  case  shows  con- 
clusively that  he  is  not  in  the  exercise  of  due  care.    Sometimes  it  is 


CHAP.   XXV.]  ASSUMPTION   OF  RISK.  775 

said  that  the  defendant  no  longer  owes  him  any  duty;  sometimes 
that  the  duty  becomes  one  of  imperfect  obligation,  and  is  not  recog- 
nized in  law.  In  one  form  or  another  the  doctrine  is  given  effect,  as 
showing  that,  in  a  case  to  which  it  applies,  there  is  either  no  negli- 
gence towards  the  plaintiff  on  the  part  of  the  defendant,  or  a  want 
of  due  care  on  the  part  of  the  plaintiff. 

In  Thomas  v.  Quartermaine,  18  Q.  B.  Div.  685,  Bowen,  L.  J., 
says :  "  The  duty  of  an  occupier  of  premises  which  have  an  element 
of  danger  upon  them  reaches  its  vanishing  point  in  the  case  of  those 
who  are  cognizant  of  the  full  extent  of  the  danger  and  voluntarily 
run  the  risk."  It  would  be  unjust  that  one  who  freely  and  volun- 
tarily assumes  a  known  risk  for  which  another  is,  in  a  general  sense, 
culpably  responsible,  should  hold  that  other  responsible  in  damages 
for  the  consequences  of  his  own  exposure.  In  Yarmouth  v.  France, 
19  Q.  B.  Div.  647,  Lord  Esher,  M.  R.,  expresses  the  opinion  that 
in  such  a  case  it  is  incorrect  to  say  that  the  defendant  no  longer 
owes  a  duty  to  the  plaintiff,  but  that  it  should  rather  be  said  that  the 
duty  is  one  of  imperfect  obligation,  performance  of  which  the  law 
will  not  enforce. 

It  may  be  said  that  the  voluntary  conduct  of  the  plaintiff  in  ex- 
posing himself  to  a  known  and  appreciated  risk  is  the  interposition 
of  an  act  which,  as  between  the  parties,  makes  the  defendant's  act> 
in  its  aspect  as  negligent,  no  longer  the  proximate  cause  of  the 
injury ;  ^  or,  at  least,  is  such  participation  in  the  defendant's  conduct 

»  Prof.  Francis  H.  Bohlen,  In  his  article  on  Voluntary  Assumption  of  Risk  (20 
Harvard  Law  Review,  at  page  16)  says :  "  Where  one  voluntarily  acts  or  enters 
into  a  relation  contractual  or  otherwise  with  another,  bis  knowledge  of  the  risks 
inherent  to  his  action  or  to  the  relation  created,  disproves  the  existence  of  any 
duty  on  the  part  of  the  creator  of  the  danger  to  remove  it.  Just  as  consent  to  suffer 
violence  destroys  the  wrongfulness  of  its  application.  Neither  knowledge  of  a 
danger  voluntarily  encountered  nor  consent  is  a  defence  which,  while  admitting  the 
breach  of  a  duty,  Justifies  or  excuses  it,  or  which  debars  the  plaintiff  from  recoy- 
ering  because  himself  a  wrongdoer.  Such  is  the  view  of  Ix)rd  Justice  Bowen  in 
Thomas  v.  Quartermaine  (18  Q.  B.  D.  685)."  And  in  a  note  he  continues  as  fol- 
lows :  "  Knowlton,  J.,  in  Fitzgerald  v.  Conn.  R.  Paper  Co.,  155  Mass.  155,  while 
expressing  concurrence  with  this  view,  shows  a  confused  leaning  to  other  concep- 
tions. At  p.  159  he  says :  '  The  plaintiff's  conduct  in  voluntarily  exposing  himself 
is  an  act  which  as  between  the  parties  makes  the  defendant's  act  no  longer  the 
proximate  cause  of  the  injury.'  Now  legal  proximity  may  be  important  in  two 
ways :  it  may  determine  the  defendant's  duty  to  refrain  from  some  particular  act, 
or  the  extent  of  his  liability  for  the  consequences  of  an  admitted  wrong.  See  40 
Am.  L.  Reg.,  N.  S.,  79  and  148.  If  the  defendant  could  not  foresee  that  the  plaintiff 
would  probably  expose  himself  to  the  danger,  the  defendant  as  to  him  is  guilty  of 
no  wrong  in  creating  it ;  if,  though  his  act  was  wrongful,  the  plaintiff's  exposure 
was  not  the  natural  consequence  of  it,  the  defendant  Is  not  liable  for  the  ensuing 
Injury.  Now,  while  no  one  is  legally  bound  to  anticipate  that  others  will  oflSciously 
intermeddle  or  act  wrongfully  or  recklessly,  and  so  Is  not  responsible  for  what 
they  may  do  with  opportunities  or  under  temptations  of  the  defendant's  creation, 
where  such  other  has  the  right  or  is  bound  by  a  legal  or  social  duty  to  act  as  he 
does,  or  if  he  acts  under  the  defendant's  orders  and  for  his  benefit  and  Just  as  he 
Intended  (the  actor's  sole  freedom  of  volition  being  a  legal  right  to  refuse  ol)edlence 
and  leave  an  employment  in  the  course  of  which  he  Is  bound  to  obey),  such  action  is 
more  than  natural  and  probable,  it  is  actually  induced  and  intended.  Again,  to  say 
that  an  act  is  the  proximate  cause  of  an  injury  only  as  between  the  parties  is  to 
add  a  new  element  of  confusion  to  a  subject  already  difficult.  If  the  act  and  the 
consequences  are  the  same,  the  legal  proximity  of  the  one  to  the  other,  depending 
as  it  does  on  the  foresight  of  the  normal  man  or  on  the  course  of  nature,  cannot  be 


776  FITZGERALD  V.   CONN.   E.   PAPER   CO.  [CHAP.   XXV. 

fle  to  preclude  the  plaintiff  from  recovering  on  the  ground  of  the  de- 
fendant's negligence.  Certainly  it  would  be  inconsistent  to  hold  that 
a  defendant's  act  is  negligent  in  reference  to  the  danger  of  injuring 
the  plaintiff,  and  that  the  plaintiff  is  not  negligent  in  voluntarily 
exposing  himself  when  he  understands  the  danger.  It  is  to  be  remem- 
bered that,  in  determining  whether  a  defendant  is  negligent  in  a 
given  case,  his  duty  to  the  plaintiff  at  the  time  is  to  be  considered, 
and  not  his  general  duty,  or  his  duty  to  others.  Therefore,  when 
it  appears  that  a  plaintiff  has  knowingly  and  voluntarily  assumed 
the  risk  of  an  accident,  the  jury  should  be  instructed  that  he  cannot 
recover,  and  should  not  be  permitted  to  consider  the  conduct  of  the 
defendant  by  itself,  and  find  that  it  was  negligent,  and  then  con- 
sider the  plaintiff's  conduct  by  itself,  and  find  that  it  was  reasonably 
careful. 

But  this  principle  applies  only  when  the  plaintiff  has  voluntarily 
assumed  the  risk.  As  is  said  by  Bowen,  L.  J.,  in  Thomas  v.  Quarter- 
maine,  supra,  the  maxim  is  not  scienti  non  fit  injuria,  but  volenti 
non  fit  injuria.  The  chief  practical  difficulty  in  applying  it  is  in 
determining  when  the  risk  is  assumed  voluntarily.  In  the  first  place, 
one  does  not  voluntarily  assume  a  risk  who  merely  knows  that  there 
is  some  danger,  without  appreciating  the  danger.  On  the  other  hand, 
he  does  not  necessarily  fail  to  appreciate  the  risk  because  he  hopes 
and  expects  to  encounter  it  without  injury.  If  he  comprehends  the 
nature  and  the  degree  of  the  danger,  and  voluntarily  takes  his  chance, 
he  must  abide  the  consequences,  whether  he  is  fortunate  or  unfor- 
tunate in  the  result  of  his  venture.  Sometimes  the  circumstances 
may  show  as  matter  of  law  that  the  risk  is  understood  and  appre- 
ciated, and  often  they  may  present  in  that  particular  a  question  of 
fact  for  the  jury. 

What  constraint,  exigency,  or-  excuse  will  deprive  an  act  of  its 
voluntary  character  when  one  intentionally  exposes  himself  to  a 
known  risk  is  a  question  about  which  learned  judges  differ  in  opinion. 
It  has  been  held  by  some  that  where  a  man  is  not  physically  con- 
strained, where  he  can  take  his  option  to  do  a  thing  or  not  to  do  it, 
and  does  it,  he  must  be  held  to  do  it  voluntarily.  See  opinion  of 
Lord  Bramwell  in  Membery  v.  Eailway  Co.,  L.  E.  14  App.  Cas. 
179,  and  the  dissenting  opinion  in  Eckert  v.  Eailroad  Co.,  43  N.  Y. 
503.  But  by  the  authorities  generally,  one  who  in  an  exigency  re- 
luctantly determines  to  take  a  risk  is  not  held  so  strictly.  There 
has  been  much  difference  among  the  English  judges  in  regard  to  the 

affected  by  the  personality  of  the  plaintiff,  who,  It  Is  true,  may  for  other  reasons 
be  barred  by  It.  It  is  a  confusing  misuse  of  the  word  to  say  that  if  a  servant 
Toluntarlly  driving  a  known  skittish  horse  Is  Injured  together  with  a  stranger 
in  the  ensuing  runaway,  the  master's  act  in  supplying  the  horse  Is  a  proximate 
cause  of  the  stranger's  Injuries,  but  not  of  the  servant's.  The  same  confusion  of 
thought  beclouds  the  subject  of  contributory  negligence.  See  Bowen,  L.  J.,  In 
Thomas  v.  Quartermaine,  18  Q.  B.  D.  685.  See  an  admirable  treatise  on  Contriba- 
tory  Negligence  by  Charles  H.  Burr,  Esq.,  of  the  Philadelphia  bar." 


CHAP.   XXV.]  ASSUMPTION   OF   RISK.  777 

question  whether  a  servant  who  discovers  a  defect  in  machinery,  not 
existing  when  he  entered  the  service,  which  the  master  is  bound  to 
repair,  and  who  works  on,  understanding  the  danger,  rather  than 
to  lose  his  place  by  complaining  of  it  or  refusing  to  work  until  it 
is  repaired,  shall  be  held  to  have  voluntarily  assumed  the  risk.  In 
Membery  v.  Railway  Co.,  supra,  Lord  Bramwell  expresses  the 
opinion  that  the  plaintiff  cannot  recover  in  such  a  case,  while  the 
Lord  Chancellor  and  Lord  Herschell,  without  expressing  an 
opinion,  prefer  to  keep  the  question  open  for  future  consideration. 
In  Thrussell  v.  Handyside,  20  Q.  B.  Div.  359,  the  court  of  Queen's 
Bench  held  that  a  workman,  by  continuing  to  work  under  such 
circumstances,  does  not  voluntarily  assume  the  risk ;  and  in  Yarmoutli 
V.  France,  19  Q.  B.  Div.  647,  a  majority  of  the  court  of  appeals  are 
of  the  same  opinion. 

In  Sullivan  v.  Manufacturing  Co.,  113  Mass.  396,  is  the  following 
language :  "  Though  it  is  a  part  of  the  implied  contract  between 
master  and  servant  (where  there  is  only  an  implied  contract)  that 
the  master  shall  provide  suitable  instruments  for  the  servant  with 
which  to  do  his  work,  and  a  suitable  place  where,  when  exercising 
due  care  himself,  he  may  perform  it  with  safety,  or  subject  only 
to  such  hazards  as  are  necessarily  incident  to  the  business,  yet  it  is 
in  the  power  of  the  servant  to  dispense  with  this  obligation.  "\Mien 
he  assents,  therefore,  to  occupy  the  place  prepared  for  him,  and 
incur  the  dangers  to  which  he  will  be  exposed  thereby,  having  suffi- 
cient intelligence  and  knowledge  to  enable  him  to  comprehend  them, 
it  is  not  a  question  whether  such  a  place  might  with  reasonable  care, 
and  by  a  reasonable  expense,  have  been  made  safe.  His  assent  has 
dispensed  with  the  performance  on  the  part  of  the  master  of  the 
duty  to  make  it  so.  Having  consented  to  serve  in  the  way  and  manner 
in  which  the  business  was  being  conducted,  he  has  no  proper  ground 
of  complaint,  even  if  reasonable  precautions  have  been  neglected."  In 
Goodnow  V.  Mills,  146  Mass.  261,  it  is  said  that  "  there  was  no  danger 
which,  in  view  of  the  plaintiff's  knowledge  and  capacity,  must  not 
have  been  well  understood  by  and  apparent  to  him,  and  there  was 
therefore  no  negligence  on  the  part  of  the  defendant  in  exposing  him 
to  it."  In  Leary  v.  Eailroad  Co.,  139  Mass.  580,  Mr.  Justice  Devexs 
uses  these  words :  "  But  the  servant  assumes  the  dangers  of  the  em- 
ployment to  which  he  voluntarily  and  intelligently  consents,  and 
while  ordinarily  he  is  to  be  subjected  only  to  hazards  necessarily 
incident  to  his  employment,  if  he  knows  that  proper  precautions  have 
been  neglected,  and  still  knowingly  consents  to  incur  the  risk  to 
which  he  will  be  exposed  thereby,  his  assent  dispenses  with  the  duty 
of  the  master  to  take  such  precautions." 

In  this  commonwealth,  as  well  as  elsewhere,  plaintiffs  have  been 
precluded  from  recovering,  alike  where  their  assumption  of  the  risk 
grew  out  of  an  implied  contract  in  reference  to  the  condition  of  things 


778  FITZGERALD  V.   CONN.   E.   PAPER  CO.  [CHAP.   XIV. 

at  the  time  of  entering  the  defendant's  service,  and  where  they  volun- 
tarily assumed  a  risk  which  came  into  existence  afterwards.  Moulton 
V.  Gage,  138  Mass.  390;  Taylor  v.  Manufacturing  Co.,  140  Mass. 
150;  Wood  V.  Locke,  147  Mass.  604;  Murphy  v.  Greeley,  146 
Mass.  196;  Huddleston  v.  Machine-Shop,  106  Mass.  282;  Pingree 
V.  Leyland,  135  Mass.  398 ;  Gilbert  v.  Guild,  144  Mass.  601 ;  Lothrop 
V.  Eailroad  Co.,  150  Mass.  423;  Mellor  v.  Manufacturing  Co.,  150 
Mass.  362 ;  Minor  v.  Eailroad  Co.,  153  Mass.  398 ;  Lewis  v.  Railroad 
Co.,  153  Mass.  73. 

This  court  has  recognized  the  doctrine  that  mere  knowledge  of 
a  danger  will  not  preclude  a  plaintiff  from  recovering  unless  he 
appreciates  the  risk.  Scanlon  v.  Eailroad  Co.,  147  Mass.  484 ;  Linne- 
han  V.  Sampson,  126  Mass.  506;  Ferren  v.  Eailroad  Co.,  143  Mass. 
197;  Taylor  v.  Manufacturing  Co.,  140  Mass.  150;  Williams  v. 
Churchill,  137  Mass.  243;  Lawless  v.  Eailroad  Co.,  136  Mass.  1. 
See,  also,  Thomas  v.  Quartermaine  and  Yarmouth  v.  France,  supra. 
Many  other  cases  in  which  the  plaintiff  has  not  been  precluded  from 
recovering  may  be  referred  to  this  principle,  and  some  of  them  more 
properly  rest  on  the  ground  that  there  were  such  considerations  of 
duty  or  exigency  affecting  him  as  to  present  a  question  whether  the 
assumption  of  the  risk  was  voluntary  or  under  an  exigency  which 
justified  his  action,  and  induced  him  unwillingly  to  encounter  a 
danger  to  which  he  was  wrongfully  exposed.  Pomeroy  v.  Westfield, 
154  Mass.  462;  Mahoney  v.  Eailroad,  104  Mass.  73;  Lyman  v. 
Amherst,  107  Mass.  339;  Thomas  v.  Telegraph  Co.,  100  Mass.  156; 
Dewire  v.  Bailey,  131  Mass.  169;  Looney  v.  McLean,  129  Mass.  33; 
Gilbert  v.  Boston,  139  Mass.  313 ;  Eckert  v.  Eailroad  Co.,  43  N.  Y. 
502.  Whether  the  fear  of  losing  one's  situation  would  constitute  such 
an  exigency,  where  the  place  had  become  dangerous  by  reason  of  the 
negligence  of  the  employer  to  repair  it,  especially  if  notice  of  the  dan- 
ger had  been  given  by  the  servant,  and  there  had  been  a  promise 
speedily  to  repair  it,  we  need  not  decide  in  this  case.  See  Leary  v. 
Eailroad,  139  Mass.  580;  Haley  v.  Case,  142  Mass.  316;  Westcott 
V.  Eailroad  Co.,  153  Mass.  460. 

We  are  of  opinion  that  it  cannot  be  said  as  a  matter  of  law  that 
the  plaintiff  in  the  present  case,  in  attempting  to  go  down  the  steps, 
voluntarily  assumed  a  risk  which  she  understood  and  appreciated, 
and  which  resulted  in  the  accident.  She  knew  that  the  steps  were 
icy,  and  that  there  was  some  danger  in  passing  over  them.  But  the 
evidence  tended  to  show  that  their  condition  in  regard  to  slipperiness 
was  constantly  changing  in  different  states  of  the  weather,  with  the 
spray  falling  daily  from  steam-pipes  and  freezing  upon  them.  Com- 
mon experience  tells  us  that  the  degree  of  slipperiness  of  ice  is  not 
always  determinable  from  an  occular  inspection  of  it.  If  it  were 
certain  that  the  extent  of  the  danger  was  obvious  to  one  who  saw  the 
surface  of  the  steps,  the  case  would  be  different. 


CHAP.   XXV.]  ASSUMPTION   OF  RISK.  779 

Besides,  there  was  evidence  tending  to  show  that  she  had  no  way 
of  leaving  the  defendant's  mill  except  by  going  down  the  steps,  and 
that  was  important  to  be  considered  in  deciding  whether  she  took 
the  risk  voluntarily. 

Osborne  v.  Kailroad  Co.,  21  Q.  B.  Div.  220,  a  case  in  which  the 
plaintiff  sued  to  recover  for  an  injury  received  in  going  down  some 
icy  stone  steps,  is  precisely  in  point.  It  is  said  in  the  opinion,  refer- 
ring to  the  language  of  the  justices  in  Yarmouth  v.  France,  and 
Thomas  v.  Quartermaine,  supra:  "Those  observations  go  far  to 
make  it  hard  for  a  defendant  to  succeed  on  such  a  defence  as  that 
relied  on  here;  for  it  is  probable  that  juries  would  often  find  for 
plaintiffs  on  the  ground  that  they  had  not  full  knowledge  of  the 
nature  and  extent  of  the  risk.  But  that  cannot  be  helped.  .  .  .  These 
judgments  introduce  an  important  qualification  of  the  maxim,  volenti 
non  fit  injuria.  In  the  present  case  the  plaintiff  may  well  have  mis- 
apprehended the  extent  of  the  difficulty  and  danger  which  he  would 
encounter  in  descending  the  steps;  for  instance,  he  might  easily  be 
deceived  as  to  the  condition  of  the  snow." 

We  are  of  opinion  that  the  case  should  have  been  submitted  to  the 
jury.  Exceptions  sustained} 

GUNNING   SYSTEM   v.   LAPOINTE. 

212  111.  274.     1904. 

Ricks,  C.  J.  This  action  is  brought  to  recover  damages  for  in- 
juries sustained  by  appellee  through  appellant's  alleged  negligence. 
On  the  trial  in  the  Circuit  Court  of  Cook  county  the  jury  returned 
a  verdict  in  favor  of  the  plaintiff  (appellee  here)  for  "the  sum  of 
$13,250.  The  trial  court,  on  motion  for  a  new  trial,  directed  a 
remittitur  of  $3,250,  and  judgment  was  entered  for  $10,000,  which 
was  affirmed  by  the  Appellate  Court  for  the  First  District,  and  a  fur- 
ther appeal  is  prosecuted  to  this  court 

»  "In  a  very  recent  case  In  England  (Smith  v.  Baker  [18911,  A.  C.  325),  It  has 
lieen  decided  by  the  House  of  Lords  Aat  a  servant  who  continues  to  work  where 
he  is  exposed  to  a  danger  which  he  understands  and  appreciates,  and  which  results 
from  his  employer's  negligence,  and  which  he  did  not  assume  by  his  implied  con- 
tract when  he  entered  the  service,  does  not,  as  matter  of  law,  voluntarily  assume 
it  by  merely  remaining  In  a  place  which  Is  rendered  unsafe  by  his  master's  fault. 
We  are  not  aware  of  any  adjudications  in  this  commonwealth  which  are  necessarily 
Inconsistent  with  this  just  and  reasonable  doctrine,  although  different  opinions  have 
been  expressed  on  this  point  by  eminent  Judges  both  here  and  in  England.  Most 
of  the  cases  in  this  state  which  relate  to  a  servant's  assumption  of  a  risk  refer  to 
risks  assumed  on  entering  the  service.  Leary  v.  Boston  &  Albany  Railroad,  139 
Mass.  580.  See  Scanlon  v.  Boston  &  Albany  Railroad,  147  Mass.  484 ;  Fitzgerald 
V.  Connecticut  River  Paper  Co.,  155  Mass.  155,  and  cases  there  cited.  The  tendency 
of  recent  decisions  is  to  hold  that,  in  regard  to  dangers  growing  out  of  the  master's 
negligence,  which  are  not  covered  by  the  implied  contract  between  the  master  and 
servant  when  the  service  was  undertaken.  It  is  a  question  of  fact  whether  a  servant 
who  works  on  appreciating  the  risk  assumes  it  voluntarily,  or  endures  It  because 
he  feels  constrained  to.  Fitzgerald  v.  Connecticut  River  Paper  Co.,  ubi  aupra." 
Mahoney  v.  Dore,  155  Mass.  513,  at  p.  519. 


780  GUNNING  SYSTEM  V.   LAPOINTE.  [CHAP.   liV. 

The  facts  as  shown  by  the  record  are,  briefly,  as  follows:  On 
February  23,  1901,  Charles  Lapointe  (appellee)  was  working  for  the 
Gunning  System  (appellant)  in  Milwaukee,  Wis.,  his  business  being 
that  of  a  sign  painter.  The  company  had  recently  erected  a  bulletin 
board  in  Milwaukee,  and  appellee  had'  been  sent  there  from  Chicago 
to  assist  a  man  by  the  name  of  Fromm  in  painting  this  board. 
Fromm  had  for  10  years  been  a  foreman  for  the  Gunning  System  and 
its  predecessor.  Appellee  had  worked  for  the  company  between  two 
and  three  years,  and  had  worked  as  sign  painter  for  about  10  months. 
A  few  days  before  the  appellee  was  injured  he  was  directed  by  Mr. 
Eeich,  who  was  general  foreman  for  the  Gunning  System,  to  go  to 
Milwaukee  and  report  there  to  Fromm,  and  was  told  that  he  would 
receive  all  his  instructions  from  Fromm,  who  was  to  be  his  immediate 
foreman.  Appellee  and  Fromm  arrived  in  Milwaukee  on  Sunday, 
the  17th  day  of  February,  and  on  the  following  day  they  called  at 
the  office  of  one  Fitzgerald,  who  was  superintendent  and  manager  for 
appellant  in  Milwaukee,  and  were  by  him  directed  to  the  place  and 
informed  as  to  the  manner  in  which  they  should  do  their  work.  They 
went  to  the  bulletin  board  on  that  day,  and  did  some  work,  and  dis- 
covered that  the  bulletin  board  was  incomplete.  On  Tuesday  they 
did  some  additional  work,  and  oh  Tuesday  evening  went  to  Fitz- 
gerald and  made  complaint  about  the  weakness  of  the  board.  It 
appears  from  the  evidence  that  the  bulletin  board  was  built  with 
tongued  and  grooved  planks  one  inch  thick,  set  perpendicular,  the 
upright  boards  being  nailed  onto  two  crosspieces  about  one  inch  thick 
and  three  inches  wide,  the  upper  crosspiece  being  about  2^  feet  from 
the  top,  and  the  lower  one  about  the  same  distance  from  the  bottom 
of  the  boards.  Braces  extended  from  the  crosspieces  back  of  the 
boards  to  the  ground.  There  was  no  crosspiece  over  the  front  of  the 
billboard,  nor  was  there  a  strip  or  board  running  across  the  top  of 
the  bulletin  board,  as  is  generally  used  in  the  construction  of  such 
boards.  Fitzgerald  directed  them  to  return  the  following  morning, 
which  they  did,  and  then  Fromm,  in  the  presence  of  appellee,  told 
Fitzgerald  that  the  bulletin  board  needed  fixing;  that  it  was  shaky 
and  weak,  and  that  he  did  not  think  it  was  safe.  He  also  stated  it 
was  not  properly  braced,  and  there  was  no  board  along  on  top  of  the 
signboard  to  protect  the  hook.  Fitzgerald  then  said,  "  You  are 
always  kicking,  an}'way,  every  time  you  come  up  here,  and  you  better 
go  back  and  work."  Fromm  replied,  "  I  will  not  till  you  fix  that 
sign."  Fitzgerald  then  said,  "if  that  is  all  you  want,  go  back  to 
work  and  I  will  have  that  band  put  on  for  you."  Then  Fromm  said 
to  Lapointe,  "  We  will  go  back  to  work."  The  two  did  return  to  work, 
and  worked  Wednesday  and  Thursday.  Friday  being  a  holiday,  they 
did  not  work,  and  on  Saturday  Fromm  returned  to  Chicago.  Ap- 
pellee remained  at  work,  and  in  the  afternoon,  while  he  was  upon  the 
scaffold,  one  of  the  large  hooks  which  were  thrown  over  the  top  of 


CHAP.    XXV.]  ASSUMPTION   OF   RISK.  781 

the  boards  to  hold  up  the  scaffold  upon  which  he  stood  pulled  through 
the  top  of  the  bulletin  board,  owing  to  the  top  band  not  having  been 
put  in  place,  allowing  one  end  of  the  scaffold  to  fall,  throwing 
Lapointe  from  the  scaffold  to  the  ground  and  severely  injuring  him. 

Upon  this  state  of  facts  plaintiff  contends  that  the  assumption  of 
risk  which  would  ordinarily  bar  his  right  of  action  was  suspended 
during  the  running  of  the  promise  to  repair,  and  for  a  reasonable 
time  after  the  period  when  it  could  have  been  fulfilled.  The  de- 
fendant meets  this  argument  with  the  assertion  that  such  a  promise, 
if  made,  would  not  suspend  the  risk  assumed  by  the  employee,  because 
it  was  a  promise  that  could  have  been  fulfilled  in  an  hour  and  a  half's 
time,  as  shown  by  the  evidence,  and  he,  having  continued  in  the  work 
for  three  days  after  the  promise  to  remedy  the  defect,  thereby  assumed 
the  risk.  .  .  . 

The  narrow  and  concrete  question  presented  by  these  conflicting 
claims  is  whether  such  a  promise  as  here  made  at  once  absolves  the 
employee  from  the  risk  which  he  had  theretofore  voluntarily  assumed, 
or  whether  the  risk  is  continued  until  the  time  when  the  master's 
promise  to  repair  is  fulfilled,  and  what  would  constitute  a  reasonable 
time  for  the  fulfillment  of  the  promise  to  repair.  We  find  that  the 
authorities  in  this  state  all  practically  agree.  While,  as  a  broad, 
general  proposition,  the  master  is  required  to  furnish  the  servant  a 
reasonably  safe  place  in  which  to  work,  it  is  also  true  that  if  the  de- 
fect is  so  open  and  obvious  that  the  servant  does  see  and  know  of  the 
existence  of  the  defect,  and  the  danger  arising  therefrom  is  apparent 
and  known  to  him,  or  within  the  observation  of  a  reasonably  prudent 
man  in  his  situation,  and  the  servant  enters  upon  and  continues. the 
work,  he  is  held  to  assume  the  risks  and  hazards  of  the  employment 
due  to  such  conditions.  The  servant  may,  however,  in  some  cases, 
suspend  the  operation  or  force  of  the  rule  of  assumed  risk  as  to'such 
defects  and  dangers  by  complaining  to  or  informing  the  master 
thereof  and  obtaining  from  him  the  promise  to  repair  the  defects  and 
obviate  the  danger.  It  is  not  in  all  cases  that  the  servant  may  relieve 
himself  from  the  assumption  of  the  risk  incident  to  defects  and  dan- 
gers of  which  he  has  full  knowledge  by  exacting  from  the  master  a 
promise  to  repair.  The  cases  where  the  rule  of  assumed  risk  is 
suspended,  and  the  servant  exempted  from  its  application  under  a 
promise  from  the  master  to  repair  or  cure  the  defect  complained  of, 
are  those  in  which  particular  skill  and  experience  are  necessary  to 
know  and  appreciate  the  defect  and  the  danger  incident  thereto,  or 
where  machinery  and  materials  are  used  of  which  the  servant  can  have 
little  knowledge,  and  not  those  cases  where  the  servant  is  engaged  in 
ordinary  labor,  or  the  tools  used  are  only  those  of  simple  construction, 
with  which  the  servant  is  as  familiar  and  as  fully  understands  as 
the  master.  Webster  Manf.  Co.  v.  Nisbett,  205  111.  273;  Illinois 
Steel  Co.  V.  Mann,  170  111.  200;  Meador  v.  Lake  Shore  &  Michigan 


782  GUNNING   SYSTEM   V.   LAPOINTE.  [CHAP.    XXV. 

Southern  Railway  Co.,  138  Ind.  290 ;  Marsh  v.  Chickering,  101  N.  Y. 
396;  Power  Co.  v.  Murphy,  115  Ind.  570;  St.  Louis,  Arkansas  & 
Texas  Eailway  Co.  v.  Kelton  (Ark.),  18  S.  W.  933;  Bailey  on  Master 
and  Servant,  §  3103;  Barrows  on  Negligence,  pp.  121,  122.  If  it 
be  held  that  the  case  at  bar  is  one  that  falls  within  the  exception,  and, 
pending  the  time  for  promised  repairs,  exempts  the  servant  from  the 
assumption  of  the  risk,  then  it  is  proper  to  consider  and  determine 
the  meaning  and  terms  of  the  rule  itself. 

From  a  careful  review  of  the  authorities,  we  are  disposed  to  the 
view  that  where  the  servant  finds  that  the  machinery  with  which  he 
is  to  work  is  out  of  repair  and  dangerous  to  work  with,  or  that  the 
place  in  which  he  is  to  work  is  dangerous,  he  may  complain  to  the 
master  and  exact  from  him  a  promise  to  repair,  and,  if  the  defect 
is  not  such  that  it  so  endangers  the  person  of  the  servant  that  a 
reasonably  prudent  man  would  not  continue  to  work  with  the  ma- 
chinery or  in  the  place  assigned,  the  servant  may  continue  the  work, 
under  the  promise  to  repair,  without  being  held,  as  a  matter  of  law, 
to  have  assumed  the  risk.  If  the  promise  is  to  repair  by  a  fixed  time, 
then,  after  the  expiration  of  the  time  fixed,  the  servant  assumes  the 
risk  from  the  defects  complained  of.  If  the  promise  to  repair  is 
without  fixing  the  time  within  which  the  repairs  shall  be  made,  the 
servant  may  continue  the  work  for  a  reasonable  time,  taking  the 
character  of  the  defects  into  consideration,  within  which  the  repairs 
could  or  ought  to  be  made,  and  at  and  after  the  expiration  of  such 
reasonable  time  within  which  to  make  the  repairs,  if  they  are  not 
made,  and  if  the  defects  are  open  and  known  to  the  servant,  and  no 
new  promise  to  repair  is  made,  and  the  servant  continues  the  work, 
he  assumes  the  risks  incident  to  the  defects  of  which  he  complained. 
In  Illinois  Steel  Co.  v.  Mann,  170  111.  200,  we  said  (page  210,  170 
111. )  :  "  WTiile  it  is  true  some  cases  hold  the  rule  to  be  that  the  ser- 
vant, after  having  informed  the  master  of  any  defects  in  machinery, 
tools,  appliances,  or  surroundings  of  his  work,  and  the  master  having 
promised  to  repair  and  make  safe  such  defects,  has  the  right  to  rely 
upon  such  promise  and  continue  in  the  employ  of  the  master,  expect- 
ing such  promise  to  be  fulfilled,  yet  the  rule  in  this  state,  and  also 
in  most  other  states,  holds  that  such  expectation  on  the  part  of  the 
servant  may  continue  only  for  a  time  reasonable  for  such  repairs  to 
be  made  or  defects  remedied,  and,  if  not  so  made  within  a  reasonable 
time,  the  servant,  having  full  knowledge  of  such  defects,  will  be  con- 
sidered to  have  waived  the  same,  and  subject  himself  to  all  the 
dangers  incident  thereto"  —  citing,  also.  Swift  v.  Madden,  165  111. 
41 ;  Counsell  v.  Hall,  145  Mass.  468 ;  Missouri  Furnace  Co.  v.  Abend, 
107  111.  44;  Stephenson  v.  Duncan,  73  Wis.  404;  Gowan  v.  Hardy, 
56  Fed.  974;  Corcoran  v.  Milwaukee  Gaslight  Co.,  81  Wis.  191. 

After  the  servant  has  discovered  the  defect  and  shown  his  appre- 
ciation of  the  danger  by  exacting  from  the  master  the  promise  to 


CHAP.   XXV.]  ASSUMPTION   OF   RISK.  Y83 

repair,  and  continues  in  the  employment  after  the  expiration  of  the 
reasonable  time  for  making  the  repairs  without  the  same  having  been 
made,  and  without  exacting  or  receiving  a  further  promise  to  repair, 
it  is  neither  unjust  nor  a  hardship  to  the  servant  to  hold  that  he 
f  ssumes  the  risk,  and  the  question  of  negligence  is  no  longer  in  the 
case.  In  the  case  at  bar  the  evidence  discloses  that  there  was  no  time 
fixed  by  the  master  in  which  to  make  the  repairs  complained  of,  and 
it  is  conceded,  and  the  undisputed  evidence  shpws,  that  to  have  made 
the  repairs  would  not  require  to  exceed  two  or  three  hours'  time. 
Appellee  not  only  continued  to  work  a  few  hours,  but  continued  to 
work  for  two  days,  took  a  holiday  the  third  day,  and  resumed  work 
the  fourth  day,  and  worked  until  after  4  o'clock  of  that  day,  when 
his  injury  was  incurred  —  all  after  he  had  complained  to  the  master, 
and  the  master  had  promised  to  repair  the  defect  which  caused  the 
injury.  The  offering  of  the  peremptory  instruction,  therefore,  raises 
the  question  whether  or  not,  as  a  matter  of  law,  appellee  assumed  the 
risk  by  continuing  at  the  work  for  a  longer  period  than  was  necessary 
for  the  master  to  have  made  the  repairs.  Upon  that  question,  and 
under  the  undisputed  evidence  appearing  in  this  record,  and  under 
the  view  of  the  law  as  hereinabove  expressed,  we  feel  constrained  tO' 
hold  that  the  appellee,  by  continuing  the  work  after  the  reasonable 
time  within  which  the  repairs  could  and  ought  to  have  been  made, 
with  full  knowledge  of  the  defect  and  thorough  appreciation  of  the 
danger,  must  be  held  to  have  assumed  the  risk  of  the  defect  and 
danger  which  caused  his  injury,  and  that  the  peremptory  instruction 
to  find  for  appellant  should  have  been  given.  .  .  . 

The  Appellate  Court  erred  in  not  reversing  the  judgment  of  the 
Circuit  Court.  The  judgments  of  the  Appellate  Court  and  of  the 
Circuit  Court  are  therefore  reversed,  and  the  cause  remanded  ta 
the  Circuit  Court.  Reversed  and  remanded. 


McFARLAN   CARRIAGE    CO.    v.   POTTER. 

153  Ind.  107.     1899. 

Hadley,  J.  Appellee  brought  this  suit  to  recover  damages  for 
injuries  received  while  operating  a  ripsaw  as  an  employee  of  appel- 
lant. The  complaint  is  in  one  paragraph,  and  in  substance  charges 
that  the  plaintiff,  being  in  the  employ  of  the  defendant,  by  order  of 
defendant  was  operating  a  ripsaw  in  the  defendant's  factory ;  that  the 
table  in  which  said  saw  was  situate,  and  said  saw,  at  the  time  the 
plaintiff  received  his  injuries,  were  defective,  and  out  of  repair,  in 
the  following  particulars:  First.  That  the  top  of  the  table  should 
have  been  level,  but  was  not  level  on  account  of  the  floor  on  which  it 
stood  giving  away,  leaving  the  top  of  the  table  in  a  slanting  position. 


784  McFARLAN    CARRIAGE   CO.   V.    POTTER.  [CHAP.    XXV. 

Second.  The  slot  irons  upon  the  table  should  have  been  smooth,  and 
even  with  the  top  of  the  table,  but  had  become  raised  one-fourth  of 
an  inch  above  the  top  of  the  table.  Third.  That  said  saw  should  have 
stood  perpendicularly ;  that  it  did  in  fact  stand  one-fourth  of  an  inch 
out  of  perpendicular;  that  the  defendant  knew  said  defects  existed 
several  days  before  the  injury;  that  on  account  of  said  defects  the 
hazard  of  operating  said  saw  was  greatly  increased;  that  on  the  12th 
day  of  December,  1895,  while  operating  said  saw  by  order  of  de- 
fendant, and  by  and  on  account  of  said  defects  in  said  saw  and  table, 
a  piece  of  timber  he  was  then  cutting  by  said  saw  was  caught  by  said 
saw  in  such  manner  as  to  turn  it  quickly  over,  and,  being  thus  quickly 
and  unexpectedly  turned,  the  hand  of  the  plaintiff  was  thereby  thrown 
against  the  saw  and  destroyed.  "  Plaintiff  further  avers :  That  the 
defendant,  from  time  to  time,  before  he  received  said  injuries,  prom- 
ised the  plaintiff  that  it  would  cause  said  saw  and  table  to  be  repaired. 
That  the  plaintiff  had  not  been  operating  said  saw  for  several  days 
prior  to  the  happening  of  the  injuries  complained  of.  That  on  the 
morning  of  said  day  the  defendant  promised  the  plaintiff  that  it 
would  repair  said  saw  and  table  as  soon  as  the  job  of  work  that  said 
company  was  then  working  on  was  completed ;  and  that  the  plaintiff, 
relying  upon  said  promise,  by  the  order  of  the  defendant  commenced 
to  operate  said  saw,  and  was  injured  within  two  hours  thereafter,  and 
before  said  job  of  work  was  completed.  That  the  plaintiff,  relying  upon 
said  promise  to  repair  said  saw  and  table,  and  at  the  request  of  the 
defendant,  continued  to  operate  the  same  until  he  received  said  inju- 
ries, believing  that  the  defendant,  in  pursuance  of  its  promises,  would 
repair  said  defects  in  said  saw  and  table.  The  plaintiff  further  avers 
that  at  the  time  he  received  said  injuries  he  was  operating  said  saw 
with  due  care,  and  was  free  from  any  fault  or  negligence  on  his  part ; 
that  said  injury  was  occasioned  wholly  by  said  defects  in  said  saw 
and  table  and  the  negligence  of  the  defendant." 

A  demurrer  to  the  complaint  was  overruled.  Trial  upon  the  com- 
plaint and  general  denial,  and  verdict  and  judgment  for  $3,000. 
Error  is  assigned  upon  the  overruling  of  the  demurrer  to  the  com- 
plaint and  the  overruling  of  appellant's  motion  for  a  new  trial. 

The  point  of  attack  upon  the  complaint  is  found  in  these  words: 
"  That  the  defendant,  from  time  to  time,  before  the  plaintiff  received 
his  injuries,  promised  the  plaintiff  that  it  would  cause  said  saw  and 
table  to  be  repaired;  that  on  the  morning  of  said  day  the  defendant 
promised  the  plaintiff  that  it  would  repair  said  saw  and  table  as  soon 
as  the  job  of  work  that  said  company  was  then  working  on  was 
completed;  and  that  said  plaintiff,  relying  upon  said  promise,  by 
order  of  the  defendant,  commenced  to  operate  said  saw,  and  was 
injured  within  two  hours  thereafter,  and  before  said  job  of  work'  was 
completed." 

Appellant's  learned  counsel,  in  their  brief,  forcibly  urge  that  the 


CHAP.   XXV.]  ASSUMPTION   OF  RISK.  785 

above  averments  make  the  complaint  insufficient  for  three  reasons: 
First,  because  the  promise  to  repair  related  to  patent  defects,  —  that 
is,  such  as  were  open  and  known  equally  to  employer  and  employee; 
second,  because  the  promise  to  repair  was  too  indefinite  and  uncertain 
to  justify  reliance  thereon ;  third,  because  it  is  shown  that  the  injury 
was  received  before  the  time  fixed  for  performance  of  the  promise  to 
repair.    Appellee  with  equal  vigor  combats  each  proposition. 

1.  There  are  certain  underlying  principles  about  which  courts  and 
lawyers  are  agreed.  Among  them  are :  First.  That  in  establishing 
the  relation  of  employer  and  employee  certain  reciprocal  duties  are 
implied,  namely:  On  the  part  of  the  employer,  that  he  will  furnish 
to ,  the  employee  reasonably  safe  instrumentalities  and  place  with 
which  and  in  which  to  work ;  and,  on  the  part  of  the  employee,  that 
he  will  render  suitable  service  and  obey  the  reasonable  commands  of 
his  employer.  Second.  That  the  employee  assumes  all  the  known  and 
usual  dangers  incident  to  the  place  and  instrumentalities  with  which 
he  works.  Whether  these  mutual  obligations  are  contractual,  or 
spring  from  public  policy,  is  not  well  settled,  but  that  each  is  held 
to  a  strict  accountability  with  respect  to  these  requirements  is  a  rule 
of  universal  application.  Third.  Another  familiar  rule  is  that  during 
the  employment,  if  the  instrumentalities  used  get  out  of  repair,  either 
from  natural  wear,  displacement,  or  breakage,  thereby  increasing  the 
danger,  and  the  employee  knows  of  the  defect,  or  by  the  exercise  of 
reasonable  caution  might  have  known  it,  and  he  goes  on  without 
complaint  or  notice  to  his  employer,  he  will  be  held  to  have  assumed 
the  augmented  peril.  This  latter  rule  rests  upon  the  principle  that, 
while  it  is  the  duty  of  the  employer  to  furnish  reasonably  safe  ma- 
chiner3%  and  to  make  reasonable  inspections  for  the  discovery  of 
defects,  yet  it  is  equally  the  duty  of  the  employee  to  be  vigilant  for 
his  own  safety;  and  if  he  carelessly  overlooks  or  silently  acquiesces 
in  a  dangerous  situation  that  results  in  his  injury  the  fault  is  laid 
at  his  door,  and  he  cannot  recover  therefor. 

Upon  the  general  rule  of  assumption  of  risk  by  an  employee  who, 
with  notice,  continues  in  the  service,  the  courts  have  humanely  and 
justly  ingrafted  an  exception  that  is  now  as  well  established  as  the 
rule  itself.  The  exception  arises  when,  in  the  course  of  the  employ- 
ment, the  employee  discovers  that  the  machine  or  implement  with 
which  he  is  required  to  work  has  become  defective  and  more  dan- 
gerous, and  upon  his  notice  to  the  employer  the  latter  promises  to 
make  needed  repairs.  The  exception  is  nowhere  denied,,  but  in  its 
application  there  is  some  divergence.  The  doctrine  of  one  class  of 
instances  is  stated  by  Wharton  as  follows:  "The  only  ground  on 
which  the  exception  before  us  can  be  justified  is  that  in  the  ordinary 
course  of  events  the  employee,  supposing  the  employer  has  righted 
matters,  goes  on  with  his  work  without  noticing  the  continuance  of 
the  defect.    But  this  reasoning  does  not  apply,  as  we  have  seen,  to 

60 


786  MCFARLAN   CARRIAGE   CO.    V.   POTTER.  [CHAP.    XXV. 

cases  where  the  employee  sees  that  the  defect  has  not  been  remedied, 
and  yet  intelligently  and  deliberately  continues  to  expose  himself  to 
it.''  Whart.  Neg.  (2d  ed.)  §  220.  Or,  in  other  words,  that  the 
exception  prevails  in  cases  where  the  defect  promised  to  be  repaired 
is  latent,  and  does  not  prevail  where  it  is  patent. 

Appellant  earnestly  insists  that  the  ground  here  stated  is  the  only 
rational  and  defensible  basis  for  the  exception,  and  that  the  complaint 
is  bad  for  disclosing  that  the  defects  in  the  saw  and  table  were  clearly 
obvious;  and  the  resumption  of  work  by  appellee,  being  an  adult, 
and  familiar  with  the  saw,  and  the  dangers  likely  to  result  from  the 
situation,  even  after  the  promise  of  repairs  when  the  job  was  com- 
pleted, constituted  contributary  negligence.  We  are  not  able  to 
yield  our  assent  to  the  limitation  of  the  exception  thus  contended  for, 
nor  do  we  believe  that  this  limitation  supplies  the  only  rational  and 
defensible  ground  for  the  exception.  As  we  have  seen,  in  a  general 
employment  the  implied  undertaking  on  the  part  of  the  employer 
is  that  he  will  furnish  the  employee  with  a  reasonably  safe  place  and 
appliances  with  which  to  work,  and  on  the  part  of  the  employee  that 
he  will  assume  the  risk  of  all  ordinary  and  usual  dangers  incident 
to  the  use  of  such  instrumentalities  as  are  furnished  him  by  his 
employer.  Springing  from  the  relation  is  also  the  equally  incumbent 
duty  on  the  part  of  the  employer  to  be  vigilant  for  the  safety  of  his 
employee,  and  to  make  reasonable  inspection  for  the  discovery  of 
defects  in  the  machinery  used.  Within  the  chosen  sphere  of  mutual 
duty  during  the  progress  of  the  employment,  both  employer  and  em- 
ployee must  be  diligent,  and  co-operate  to  secure  the  employee  against 
personal  injury,  —  the  employee  to  protect  himself  against  all  known 
and  obvious  dangers,  and  the  employer  to  see  to  it  that  the  instru- 
mentalities furnished  by  him  are  reasonably  safe,  and  free  from 
lurking  and  unexpected  peril.  The  failure  to  perform  this  reciprocal 
duty  is  negligence.  Another  kindred  rule,  promotive  of  safety  to 
the  employee,  requires  the  employer,  upon  learning  of  any  latent  peril- 
or  defect  in  the  place  or  appliances,  to  promptly  notify  the  employee, 
that  he  may  be  on  his  special  guard  to  avoid  it.  It  is  likewise  the 
duty  of  the  employee,  upon  learning  of  any  such  defect,  promptly  to 
notify  his  employer,  that  the  latter  may  right  himself  by  restoring 
the  impaired  machinery  to  the  standard  of  his  duty.  And  it  is 
immaterial  whether  the  defect  of  which  the  employee  complains  be 
latent  or  obvious,  for  after  discovery  the  latent  defect  is  as  fully 
known  to  him  as  is  the  open  one.  If  the  employee  has  knowledge 
of  the  impairment  of  the  place  or  machinery,  so  that  danger  is  there- 
by increased,  and  he  goes  on  without  complaint  or  notice  to  his  em- 
ployer, he  will,  from  his  silence  and  want  of  diligence,  be  held  to  have 
assumed  the  augmented  peril,  however  great,  and,  if  injured  thereby, 
is  entitled  to  no  relief.  In  such  case  the  employee  is  the  party  at 
fault,  and  must  take  the  consequences.     When,  however,  the  em- 


CHAP.   XXV.]  ASSUMPTION    OF   RISK.  787 

ployee,  in  the  line  of  duty,  conveys  to  the  employer  notice  that  an 
impairment  of  the  instrumentalities  furnished  him  to  work  with  has 
passed  the  stage  of  reasonable  safety,  and  has  increased  the  hazards 
of  the  employment  beyond  the  limit  of  the  risk  assumed,  and  the 
employer,  recognizing  his  default,  to  avoid  an  immediate  suspension 
of  work,  requests  and  induces  the  employee  to  go  on  by  a  promise 
to  repair,  then  the  law  charges  the  former  with  an  assumption  of  the 
extraordinary  risk  pending  his  promise  to  repair.  At  this  point  the 
parties  are  no  longer  upon  equal  footing.  The  servant  is  without 
fault,  and  pursues  the  work  with  greater  peril  to  himself  than  the 
relation  requires;  while  the  master,  who  is  in  default,  requests  and 
induces  a  temporary  suspension  of  his  duty,  —  a  transient  indulgence 
of  his  negligence,  for  his  own  pleasure  or  beneficial  purpose. 

A  promise  to  repair  is  confession  to  a  breacli  of  duty;  and  when 
a  master  to  right  himself  requests  and  induces  a  postponement,  either 
for  convenience  or  profit,  no  principle  of  justice  will  lay  the  burden 
of  delay  upon  the  unoffending  servant.  The  whole  question  is  bot- 
tomed upon  the  wrong  of  the  master,  and  it  is  sophistry  to  argue 
that  the  servant,  by  confiding  in  the  master's  promise  for  a  reasonable 
time  in  which  to  cure  the  defects,  clearly  obvious  though  they  be, 
should  be  chargeable  with  having  waived  the  master's  duty  to  him, 
and  assumed  the  additional  risk  himself.  To  this  statement,  however, 
it  should  be  added  that  the  employer's  assumption  of  liability  for 
injuries  resulting  from  the  increased  risk  does  not  extend  to  promises 
to  repair  or  replace  such  simple  implements  as  ladders,  hoes,  hand- 
saws, and  the  like.    Meador  v.  Railway  Co.,  138  Ind.  290. 

8.  It  is  insisted  that  the  complaint  is  bad  for  disclosing  that  the 
promise  to  repair  was  too  uncertain  and  indefinite  as  to  time  of  per- 
formance to  warrant  a  reliance  upon  it.  The  allegation  is  that  "  the 
defendant  promised  the  plaintiff  that  it  would  repair  said  saw  and 
table  as  soon  as  the  job  of  work  that  said  company  was  then  working 
on  was  completed."  It  is  true,  we  are  not  informed  whetfter  com- 
pletion would  "  take  a  day,  thirty  days,  or  six  months,"  but  we  must 
confine  ourselves  to  a  reasonable  view,  and  presume  that  both  parties 
knew  the  time  necessary,  and  that  the  promise  was  made  and  acted 
upon  with  special  reference  to  the  time  required.  At  any  rate,  the 
promise  to  repair  is  distinctly  averred,  and,  if  the  time  of  perform- 
ance was  not  satisfactorily  shown,  the  defendant  had  its  remedy  by 
motion.    It  is  sufficient  to  withstand  a  demurrer. 

3.  It  is  also  insisted  that  the  complaint  is  bad  because  it  shows 
that  the  plaintiff's  injury  was  received  before  the  job  was  completed, 
and  before  the  time  for  execution  of  the  promise  had  arrived;  the 
insistence  being  that  the  promise  to  repair,  as  made,  did  not  begin 
to  operate  until  the  job  was  completed,  and  that  the  shielding  period 
was  the  reasonable  time  the  plaintiff  might  rely  upon  the  performance 
of  the  promise  after  the  completion  of  the  job.    We  cannot  approve 


788  MCFAELAN   CABEIAGE   CO.   V.   POTTEE.  [CHAP.   XXV. 

this  view.  We  perceive  no  sound  reason,  and  none  has  been  suggested, 
for  holding  that  such  a  promise  has  no  force  till  the  time  arrives  for 
its  execution,  and  that  it  does  not  become  effective  until  after  it  is 
broken.  It  is  clear,  and  the  view  has  the  support  of  an  overwhelm- 
ing weight  of  authority,  that  a  promise  to  repair  is  at  its  best  the 
moment  it  is  made  and  acted  upon. 

The  law  governing  the  foregoing  points  made  on  the  suflBciency 
of  the  complaint  is  for  most  part  clearly  and  succinctly  stated  in  the 
following  approved  language :  "  A  servant  who  learns  of  defects  in 
machinery  about  which  he  is  employed,  and  gives  notice  thereof,  but 
is  induced  to  remain  in  the  service  by  a  promise  of  the  master  to 
remedy  the  defect,  may  recover  for  an  injury  caused  thereby,  where 
it  occurs  within  such  time  after  the  promise  as  would  be  reasonably 
allowed  for  its  performance,  and  where  it  is  not  so  imminently  dan- 
gerous that  a  man  of  ordinary  prudence  would  refuse  to  work  about 
it,"  As  sustaining  these  views  in  several  jurisdictions,  see  Greene 
V.  Eailway  Co.,  31  Minn.  248 ;  Eureka  Co.  v.  Bass,  81  Ala.  200 ;  Koux 
V.  Lumber  Co.,  85  Mich.  519 ;  Patterson  v.  Eailroad  Co.,  76  Pa.  St. 
389;  Graham  v.  Co\e  Co.,  38  W.  Va.  273;  Foundry  Co.  v.  Van 
Dam;  149  111.  337;  Hough  v.  Eailroad  Co.,  100  U.  S.  213;  Shear. 
&  E.  Neg.  §  215;  Cooley,  Torts,  §  559;  Laning  v.  Eailroad  Co., 
49  N.  Y.  521. 

In  the  first  case  above  cited  the  court  says :  "  Neither  is  there  any 
warrant  for  the  suggestion  that  the  doctrine  of  these  cases  only 
applies  where  the  servant,  in  reliance  upon  the  promise,  continues 
in  the  service,  supposing  that  the  defects  had  been  already  remedied. 
The  statement  to  that  effect  in  Whart.  Neg.  (2d  ed.)  §  221,  finds 
no  support  whatever  in  the  authorities."  Further  on  in  the  same 
opinion  the  court  adds :  "  But  it  is  now  almost  equally  well  settled 
that  if  a  servant,  who  has  knowledge  of  defects  in  the  instrumentali- 
ties furnished  for  his  use,  gives  notice  thereof  to  his  employer,  who 
thereupon  promises  they  shall  be  remedied,  the  servant  may  recover 
for  an  injury  caused  thereby,  at  least  when  the  master  requested  him 
to  continue  in  the  service,  and  the  injury  occurred  within  the  time 
at  which  the  defects  were  promised  to  be  remedied." 

In  Eureka  Co.  v.  Bass,  supra,  it  is  said :  "  We  have  said  that  the 
carrying  of  the  risk  by  the  employer  will  be  implied  to  continue  only 
for  a  reasonable  time  after  the  making  of  the  promise  by  him  to 
remove  the  danger  producing  it.  The  injury,  in  other  words,  must 
have  occurred  within  the  time  at  which  the  defects  were  promised 
to  be  removed." 

We  therefore  hold  that  the  complaint  states  a  good  cause  of  action, 
and  appellant's  demurrer  thereto  was  properly  overruled. 

The  case  of  Oil  Co.  v.  Helmick,  148  tnd.  458,  is  urged  upon  our 
consideration  as  holding  a  contrary  view.  It  should  be  noted  that 
the  question  in  that  case  related  to  the  use  of  an  ordinary  crank. 


CHAP.   XXV.]  RISK  AS  AFFECTED  BY   STATUTE.  .789 

applied  in  the  usual  way  to  a  square  shank  on  the  end  of  a  shaft 
which  revolved  a  machine  in  the  occasional  discharge  of  candles. 
The  defect  complained  of  was  the  worn  condition  of  the  shank, 
which  had  been  brought  about  gradually  by  friction  in  the  use  of  the 
crank.  The  plaintiff  put  on  the  crank,  and,  while  engaged  in  turning 
the  machine,  the  crank  slipped  off,  and  precipitated  him  against  a 
platform,  whereby  he  was  injured.  The  court  assigned  the  Helmick 
Case  to  that  class  to  which  Meador  v.  Railway  Co.,  supra,  Power  Co. 
V.  Murphy,  115  Ind.  566,  and  Marsh  v.  Chickering,  101  N.  Y.  396, 
belong,  which  hold  that  in  the  use  of  simple  implements  and  devices 
a  promise  to  repair  is  not  available  as  a  defence.  What  was  there 
said  contrary  to  the  view  herein  expressed  was  unnecessary  to  a 
decision  of  the  case,  and  cannot  be  accepted  as  authority  in  the  case 
at  bar.  Some  expressions  in  Burns  v.  Manufacturing  Co.,  146  Ind. 
261,  and  probably  other  of  our  cases,  may  appear  in  conflict,  but  we 
are  satisfied  that  the  better  reasons,  and  a  decided  weight  of  authority, 
support  the  law  as  above  stated.  .  .  . 

Appellant  also  complains  of  instructions  Nos.  10  and  11  given  by 
the  court.  The  substance  of  each  is  to  the  effect  that,  if  the  plaintiff 
was  induced  to  continue  in  the  use  of  the  saw  by  the  promise  of  the 
defendant  to  repair  the  same,  the  plaintiff  was  excused  if  he  used 
care  reasonably  commensurate  with  the  increased  danger,  and,  if 
injured  without  any  fault  on  his  part,  and  within  the  limits  of  the 
promise  to  repair,  he  is  entitled  to  recover,  provided  the  danger  was 
not  so  great  that  a  reasonably  prudent  man  would  not  have  encoun- 
tered it.  We  think  the  instructions  were  proper  under  the  law  as 
we  have  found  it  to  be.  .  .  . 

We  find  no  error  in  the  record.  Judgment  affirmed. 


3.  Assumption  of  Risk  as  affected  by  Statute. 

NAERAMORE   v.    CLEVELAND,  C,  C.    &    ST.    L.   EY.    CO. 
96  Fed.   (C.  C.  A.,  6th  Ct.)   298.     1899. 

In  Error  to  the  Circuit  Court  of  the  United  States  for  the  Western 
Division  of  the  Southern  District  of  Ohio. 

This  writ  is  brought  to  review  a  judgment  for  the  defendant  in 
a  suit  to  recover  damages  for  personal  injuries  sustained  by  plain- 
tiff while  in  defendant's  employ  as  a  yard  switchman  in  its  railroad 
yards  at  Cincinnati,  Ohio.  While  plaintiff  was  attempting  to  couple 
two  freight  cars,  his  foot  was  caught  in  an  unblocked  guard  rail,  and 
in  his  effort  to  extricate  the  foot  his  right  hand  was  crushed  between 
the  drawheads  of  the  cars,  and  injured  so  badly  as  to  require  ampu- 


790  NARRAMORE  V.    CLEVELAND,   ETC.,   RY.    CO.       [CHAP.    XXV. 

tation.  Plaintiff  had  been  in  defendant's  employ  seven  months. 
About  one-third  of  that  time  he  was  engaged  during  the  daytime, 
and  two-thirds  during  the  night.  He  had  had  nine  years'  experience 
as  a  railroad  man.  A  railroad  man  of  experience  can  see  at  a  glance 
whether  a  guard  rail  or  switch  is  blocked  or  not.  There  were  a  great 
many  guard  rails  and  switches  in  the  yards  where  plaintiff  worked. 
AVith  the  exception  of  a  few,  where  experimental  blocks  were  used, 
the  defendant  did  not  use  blocks  in  either  its  guard  rails  or  switches. 
Plaintiff  said  he  did  not  know  that  the  guard  rail  in  which  his  foot 
was  caught  was  not  blocked,  and  that  he  had  not  noticed  whether  the 
guard  rails  and  switches  of  defendant  generally  were  blocked  or  not. 
The  plaintiff  relied  on  the  following  statute  of  Ohio,  passed  March 
23,  1888  (85  Ohio  Laws,  p.  105) :  "  Every  railroad  corporation 
operating  a  railroad  or  part  of  a  railroad  in  this  state  shall,  before 
the  first  day  of  October,  in  the  year  one  thousand  eight  hundred  and 
eighty-eight,  adjust,  fill  or  block  the  frogs,  switches,  and  guard  rails 
on  its  tracks,  with  the  exception  of  guard  rails  on  bridges,  so  as  to 
prevent  the  feet  of  its  employees  from  being  caught  therein.  The 
work  shall  be  done  to  the  satisfaction  of  the  railroad  commissioner. 
Any  railroad  corporation  failing  to  comply  with  the  provisions  of  this 
act,  shall  be  punished  by  a  fine  of  not  less  than  one  hundred  dollars, 
nor  more  than  one  thousand  dollars."  It  appeared  from  the  evidence 
that  the  defendant  company  was  operating  this  railroad  at  the  time 
of  the  passage  of  the  act,  and  has  operated  it  ever  since.  At  the  close 
of  the  evidence  the  trial  court  directed  the  jury  to  return  a  verdict 
for  the  defendant  on  the  ground  that  defendants  failure  to  block  its 
rails  and  switches  was  obvious,  and  the  plaintiff  must  be  held,  not- 
withstanding the  statute,  to  have  assumed  the  risk  of  injury  there- 
from, and  upon  such  verdict  entered  judgment  for  the  defendant. 

Before  Taft  and  Lurton,  C.  J.,  and  Thompson,  D.  J. 

Taft,  C.  J.  (after  stating  the  facts  as  above).  In  the  absence 
of  the  statute,  and  upon  common-law  principles,  we  have  no 
doubt  that  in  this  case  the  plaintiff  would  be  held  to  have  assumed 
the  risk  of  the  absence  of  blocks  in  the  guard  rails  and  switches 
of  the  defendant.  His  denial  of  knowledge  of  the  fact  that  the 
particular  guard  rail  causing  the  injury  was  unblocked  is  entirely 
immaterial.  Nor  is  his  vague  statement  that  he  was  so  busy  as  not 
to  notice  whether  the  rails  and  switches  of  plaintiff  generally  were 
unblocked  in  a  yard  where  there  were  hundreds  of  guard  rails  and 
switches,  and  in  which  he  was  constantly  at  work  for  seven  months, 
of  more  significance  or  weight.  His  evidence  upon  this  point  is  not 
creditable  to  him.  He  could  only  have  been  ignorant  of  the  admitted 
policy  of  the  defendant  in  respect  to  blocks  through  the  grossest 
failure  of  duty  on  his  part  in  a  matter  that  much  concerned  his  per- 
sonal safety  and  the  proper  operation  of  the  road.  In  such  a  case 
the  authorities  leave  no  doubt  that  the  servant  assumes  the  risk  of 


CHAP.  XXV.]      BISK  AS  AFFECTED  BY  STATUTE.  791 

the  absence  of  the  blocks,  and  the  employer  cannot  be  charged  with 
actionable  negligence  towards  him.  Railway  Co.  v.  Seley,  152  U.  S. 
145;  Appel  v.  Railway  Co.,  Ill  N.  Y.  550;  Railway  Co.  v.  Risdon's 
Adm'r,  87  Va.  335,  339;  Wood  v.  Locke,  147  Mass.  604;  Railway 
Co.  V.  McCormick,  74  Ind.  440;  Railway  Co.  v.  Ray  (Ind.  Sup.), 
51  N.  E.  920;  Rush  v.  Railway  Co.,  36  Kan.  129;  Mayes  v.  Railway 
Co.,  63  Iowa,  562 ;  Wilson  v.  Railroad  Co.,  37  Minn.  326 ;  Railway 
Co.  V.  Baxter,  42  Neb.  793 ;  Railway  Co.  v.  Davis,  54  Ark.  389. 

The  sole  question  in  the  case  is  whether  the  statute  requiring 
defendant  railway,  on  penalty  of  a  fine,  to  block  its  guard  rails  and 
frogs,  changes  the  rule  of  liability  of  the  defendant,  and  relieves 
the  plaintiff  from  the  effect  of  the  assumption  of  risk  which  would 
otherwise  be  implied  against  him.  We  have  already  had  occasion 
to  consider  in  a  more  or  less  direct  way  the  effect  of  the  statute. 
Railway  Co.  v.  Van  Home,  16  C.  C.  A.  182,  69  Fed.  139 ;  Railway 
Co.  V.  Craig,  19  C.  C.  A.  631,  73  Fed.  642.  In  these  cases  we  held 
that  the  failure  on  the  part  of  a  railway  company  to  comply  with  the 
statute  was  negligence  per  se.  A  further  consideration  of  the  stat- 
ute confirms  our  view.  The  intention  of  the  Legislature  of  Ohio  was 
to  protect  the  employees  of  railways  from  injury  from  a  very  fre- 
quent source  of  danger  by  compelling  the  railway  companies  to  adopt 
a  well-known  safety  device.  It  was  passed  in  pursuance  of  the  police 
power  of  the  state,  and  it  expressly  provided,  as  one  mode  of  enforc- 
ing it,  for  a  criminal  prosecution  of  the  delinquent  companies.  The 
expression  of  one  mode  of  enforcing  it  did  not  exclude  the  operation 
of  another,  and  in  many  respects  more  efficacious,  means  of  com- 
pelling compliance  with  its  terms,  to  wit,  the  right  of  civil  action 
against  a  delinquent  railway  company  by  one  of  the  class  sought  to 
be  protected  by  the  statute  for  injury  caused  by  a  failure  to  comply 
with  its  requirements.  Unless  it  is  to  be  inferred  from  the  whole 
purview  of  the  act  that  it  was  the  legislative  intention  that  the  only 
remedy  for  breach  of  the  statutory  duty  imposed  should  be  the  pro- 
ceeding by  fine,  it  follows  that  upon  proof  of  a  breach  of  that  duty 
by  tKe  railway  company,  and  injury  thereby  occasioned  to  the  em- 
ployee, a  cause  of  action  is  established.  Groves  v.  Lord  Wimbome, 
;[1898]  2  Q.  B.  402,  407;  Atkinson  v.  Waterworks  Co.,  2  Exch.  Div. 
441 ;  Gorris  v.  Scott,  L.  R.  9  Exch.  125.  In  this  case  there  can  be  no 
doubt  that  the  act  was  passed  to  secure  protection  and  a  newly- 
defined  right  to  the  employee.  To  confine  the  remedy  to  a  criminal 
proceeding  in  which  the  fine  to  be  imposed  on  conviction  was  not 
even  payable  to  the  injured  employee  or  to  one  complaining,  would 
make  the  law  not  much  more  than  a  dead  letter.  The  case  of  Groves 
V.  Lord  Wimborne  involved  the  construction  of  a  statute  quite  like 
the  one  at  bar,  and  a  right  of  action  was  held  to  be  given  thereby  to 
the  injured  servant  in  addition  to  the  criminal  prosecution.  The 
courts  of  Ohio  have  given  the  statute  under  discussion  the  same 


792  NAEEAMOEE  V.   CLEVELAND^   ETC.,   EY.    CO.       [CHAP.   XZ7. 

construction.  Eailroad  Co.  v.  Lambright,  5  Ohio  Cir.  Ct.  E.  433, 
aflBrmed  by  the  Supreme  Court  of  Ohio  without  opinion,  29  "Wkly. 
Law  Bui.  359. 

Do  a  knowledge  on  the  part  of  the  employee  that  the  company 
is  violating  the  statute,  and  his  continuance  in  the  service  there- 
after without  complaint,  constitute  such  an  assumption  of  the  risk 
as  to  prevent  recovery?  The  answer  to  this  question  is  to  be  found 
in  a  consideration  of  the  principles  upon  which  the  doctrine  of  the 
assumption  of  risk  rests.  If  one  employs  his  servant  to  mend  and 
strengthen  a  defective  staircase  in  a  church  steeple,  and  in  the  course 
of  the  employment  part  of  the  staircase  gives  way,  and  the  servant 
is  injured  or  killed,  it  would  hardly  be  claimed  that  the  master  was 
wanting  in  care  towards  the  servant  in  not  haviug  the  staircase 
which  fell  in  a  safe  condition.  Why  not  ?  Because,  even  if  no  ex- 
press communication  is  had  upon  the  subject,  the  servant  must 
know,  and  the  master  must  intend,  that  the  dangers  necessarily  in- 
cident to  the  employment  are  to  be  at  the  risk  of  the  servant,  who 
may  be  presumed  to  receive  greater  compensation  for  the  work  on 
account  of  the  risk.  The  foregoing  is  an  extreme  case,  perhaps,  but 
it  fairly  illustrates  the  principle  of  assumption  of  risk  in  the  rela- 
tion of  master  and  servant.  Assumption  of  risk  is  a  term  of  the 
contract  of  employment,  express  or  implied  from  the  circumstances 
of  the  employment,  by  which  the  servant  agrees  that  dangers  of 
injury  obviously  incident  to  the  discharge  of  the  servant's  duty  shall 
be  at  the  servant's  risk.  In  such  cases  the  acquiescence  of  the  ser- 
vant in  the  conduct  of  the  master  does  not  defeat  a  right  of  action 
on  the  ground  that  the  servant  causes  or  contributes  to  cause  the 
injury  to  himself;  but  the  correct  statement  is  that  no  right  of  ac- 
tion arises  in  favor  of  the  servant  at  all,  for,  under  the  terms  of  the 
emplojment,  the  master  violates- no  legal  duty  to  the  servant  in  fail- 
ing to  protect  him  from  dangers  the  risk  of  which  he  agreed  ex- 
pressly or  impliedly  to  assume.  The  master  is  not,  therefore,  guilty 
of  actionable  negligence  towards  the  servant.  This  is  the  most  rea- 
sonable explanation  of  the  doctrine  of  assumption  of  risk,  and  is 
well  supported  by  the  judgments  of  Lord  Justices  Bowen  and  Fry 
in  the  case  of  Thomas  v.  Quartermaine,  18  Q.  B.  Div.  685,  69fi.  See, 
also,  language  of  Lord  Watson  in  Smith  v.  Baker,  (1891)  App.  Cas. 
325,  and  O'Maley  v.  Gaslight  Co.,  158  Mass.  135.  It  makes 
logical  that  most  frequent  exception  to  the  application  of  doctrine 
by  which  the  employee  who  notifies  his  master  of  a  defect  in  the 
machinery  or  place  of  work,  and  remains  in  the  service  on  a  promise 
of  repair,  has  a  right  of  action  if  injury  results  from  the  defect 
while  he  is  waiting  for  the  repair  of  the  defect,  and  has  reasonable 
ground  to  expect  it.  Hough  v.  Eailway  Co.,  100  U.  S.  213;  Eail- 
road Co.  V.  Babcock,  154  U.  S.  190;  Snow  v.  Eailway  Co.,  8  Allen, 
441 ;  Gardner  v.  Eailroad  Co.,  150  U.  S.  349.    From  the  notice  and 


CHAP.   XiV.]  BISK  AS   AFFECTED  BY  STATUTE.  793 

the  promise  is  properly  implied  the  agreement  by  the  master  that 
he  will  assume  the  risk  of  injury  pending  the  making  of  the  repair. 

If,  then,  the  doctrine  of  the  assumption  of  risk  rests  really  upon 
contract,  the  only  question  remaining  is  whether  the  courts  will 
enforce  or  recognize  as  against  a  servant  an  agreement  express  or 
implied  on  his  part  to  waive  the  performance  of  a  statutory  duty  of 
the  master  imposed  for  the  protection  of  the  servant,  and  in  the  in- 
terest of  the  public,  and  enforceable  by  criminal  prosecution.  We 
do  not  think  they  will.  To  do  so  would  be  to  nullify  the  object  of 
the  statute.  The  only  ground  for  passing  such  a  statute  is  found  in 
the  inequality  of  terms  upon  which  the  railway  company  and  its 
servants  deal  in  regard  to  the  dangers  of  their  emplo}Tnent.  The 
manifest  legislative  purpose  was  to  protect  the  servant  by  positive 
law,  because  he  had  not  previously  shown  himself  capable  of  pro- 
tecting himself  by  contract;  and  it  would  entirely  defeat  this  pur- 
pose thus  to  permit  the  servant  "  to  contract  the  master  out "  of  the 
statute.  It  would  certainly  be  novel  for  a  court  to  recognize  as 
valid  an  agreement  between  two  persons  that  one  should  violate  a 
criminal  statute;  and  yet,  if  the  assumption  of  risk  is  the  term  of 
a  contract,  then  the  application  of  it  in  the  case  at  bar  is  to  do  just 
that.  The  cases  upon  the  subject  are  by  no  means  satisfactory,  and, 
strange  as  it  may  seem,  but  few  are  in  point.  There  is  one  English 
case  which  entirely  supports  our  conclusion,  and  several  dicta  by 
English  judges  of  like  tenor.  Several  American  cases  on  their  facts 
also  sustain  the  principle,  though  it  must  be  confessed  they  do  not 
very  clearly  state  the  true  ground  of  their  conclusion.  There  is  one 
American  case  which  is  directly  to  the  contrary,  and  possibly  one 
other  ought  so  to  be  regarded.  There  are  several  American  cases 
that  are  said  to  be  opposed  to  our  view,  but  an  examination  of  the 
facts  in  each  will  clearly  distinguish  them  from  the  case  at  bar. 

In  the  case  of  Baddeley  v.  Granville,  19  Q.  B.  Div.  423,  the  action 
was  for  the  wrongful  death  of  a  miner,  due  to  his  employer's  viola- 
tion of  a  statute,  and  the  defence  of  assumption  of  risk  was  set  up. 
Section  52  of  the  coal  mines  regulation  act  of  1872  required  a  banks- 
man to  be  constantly  present  while  the  men  were  going  up  or  down 
the  shaft,  but  it  was  the  regular  practice  of  the  defendant,  as  the 
plaintiff's  husband  well  knew,  not  to  have  a  banksman  in  attendance 
during  the  night.  The  plaintiff's  husband  was  killed,  in  coming  out 
of  the  mine  at  night,  by  an  accident  arising  through  the  absence  of 
a  banksman.  It  was  held  that  the  plaintiff's  intestate  did  not,  by 
continued  service  after  he  knew  of  the  violation  of  the  statute,  thereby 
assume  the  risk  of  danger  therefrom.    The  court  say  (p.  426) : 

"  An  obligation  imposed  by  statute  ought  to  be  capable  of  enforce- 
ment with  respect  to  all  future  dealings  between  parties  affected  by 
it.  As  to  the  result  of  past  breaches  of  the  obligation,  people  may 
come  to  what  agreements  they  like,  but  as  to  future  breaches  of  it 


794  NARRAMOBE  V.    CLEVELAND,  ETC.,   BY.    CO.       [CHAP.   XXT. 

there  ought  to  be  no  encouragement  given  to  the  making  of  an  agree- 
ment between  A.  and  B.  that  B.  shall  be  at  liberty  to  break  the  law 
which  has  been  passed  for  the  protection  of  A.  If  the  supposed 
agreement  come  to  this :  that  the  master  employs  the  servant  on  the 
terms  that  the  latter  shall  waive  the  breach  by  the  master  of  an 
obligation  imposed  on  him  for  the  benefit  of  others  as  well  as  of 
himself,  such  an  agreement  would  be  in  violation  of  public  policy, 
and  ought  not  to  be  listened  to." 

The  judges  deciding  the  case  of  Thomas  v.  Quartermaine,  18  Q.  B. 
Div.  685,  696,  703,  had  aflBrmed  the  view  that  assumption  of  risk 
did  not  apply  to  the  neglect  of  a  specific  statutory  duty  imposed  for 
the  benefit  of  a  class,  but  it  was  not  the  case  before  them.  They  said 
that  the  case  of  Clarke  v.  Hohnes,  7  Hurl.  &  N.  937,  6  Hurl.  &  N. 
349,  proceeded  on  this  ground,  though  it  is  difficult  to  find  the 
ground  stated  in  the  opinions.  Durant  v.  Mining  Co.,  97  Mo.  62; 
Grand  v.  Eailroad  Co.,  83  Mich.  564;  Coal  Co.  v.  Taylor,  81  111. 
590;  and  Boyd  v.  Coal  Co.  (Ind.  App.),  50  N.  E.  368,  — were  all 
cases  where  assumption  of  risk  would  have  been  a  complete  defence 
if  applicable  in  case  of  a  failure  by  the  master  to  discharge  a  statu- 
tory duty  to  the  servant,  and  the  latter^s  express  or  implied  acquies- 
cence therein;  and  yet  the  servant  was  given  judgment.  The 
reasons  stated  in  some  of  these  cases  for  the  conclusion  are  not 
entirely  satisfactory,  and  in  the  cases  from  Illinois  and  Indiana  no 
distinction  is  made  between  the  doctrine  of  assumption  of  risk  and 
of  contributory  negligence,  but  they  are  all  authorities  on  their  facts 
for  our  conclusion.  The  case  of  Knisley  v.  Pratt,  148  N.  Y.  382, 
however,  presented  the  precise  question  for  decision,  and  the  court  of 
appeals  held  expressly  that  a  servant,  by  continuing  in  the  employ- 
ment of  a  master  who  is  violating  a  statute  passed  to  protect  the 
servant,  does  assume  the  risk  of  danger  from  such  violation,  and 
cannot  make  it  the  ground  of  recovery.  This  is  followed  by  the 
circuit  court  of  appeals  for  the  Second  Circuit  in  a  New  York 
case.  Carpet  Co.  v.  O'Keefe,  25  C.  C.  A.  220,  79  Fed.  900.  The 
court  of  appeals  of  New  York,  in  Huda  v.  Glucose  Co.,  154  N.  Y. 
474,  482,  does  not  treat  the  question  decided  in  the  Knisley  Case  as 
controlling  the  case  of  servants  acquiescing  in  and  assuming  the 
risk  of  a  violation  of  a  fire-escape  statute  by  their  master,  and  the 
court  declined  to  decide  it.  The  decision  in  the  Knisley  Case  is 
largely  based  on  the  decision  of  O'Maley  v.  Gaslight  Co.,  158  Mass. 
135,  and  Goodridge  v.  Washington  Mills  Co.,  160  Mass.  234.  We 
think  the  learned  court  of  appeals  of  New  York  failed  to  observe 
that  the  O'Maley  and  Goodridge  cases  were  not  suits  under  a  statute 
defining  and  enjoining  a  specific  duty  of  a  master  for  the  protection 
of  servants,  but  were  suits  under  an  employer's  liability  act,  which 
relieved  the  servant  from  the  burden  of  certain  defences  by  the  master 
in  suits  for  injury  sustained  by  him  while  in  his  master's  employ. 


CHAP.    XXV,]  RISK   AS   AFFECTED   BY   STATUTE.  795 

but  did  not  attempt  to  change  the  master's  duty  to  the  servant,  or 
to  change  the  standard  of  negligence  between  them  as  that  was  fixed 
at  common  law.  Hence  it  was  held  by  the  Supreme  Judicial  Court 
of  Massachusetts  that  the  doctrine  of  assumption  of  risk  applied  to 
suits  under  the  statute  as  at  common  law,  and  Thomas  v.  Quarter- 
maine,  18  Q.  B.  Div.  685,  which  was  also  a  suit  under  an  employer's 
liability  act,  was  much  relied  on.  And  yet  in  Thomas  v.  Quarter- 
maine,  as  we  have  seen,  the  two  lord  justices,  forming  the  majority 
deciding  the  case,  expressly  pointed  out  that  in  a  suit  under  a  statute 
positively  fixing  a  standard  of  duty  the  doctrine  of  assumption  of 
risk  could  not  be  applied.  The  distinction  between  the  employer's 
liability  act  and  acts  for  the  protection  of  servants  in  the  nature  of 
police  legislation,  like  the  act  under  consideration,  is  clearly  shown 
in  Griffiths  v.  Earl  of  Dudley,  9  Q.  B.  Div.  357,  where,  though  the 
court  held  that  a  servant  might  "contract  the  employer  out**  of 
liability  under  the  former  act,  it  was  said  that  this  could  not  be  done 
in  respect  of  a  liability  arising  under  a  statute  like  the  one  at  bar, 
passed  for  the  protection  of  servants.  The  Knisley  Case,  which,  in 
our  judgment,  was  wrongly  decided,  and  many  others  in  which  a  right 
conclusion  was  reached,  seem  to  us  to  confuse  an  agreement  to  assume 
the  risk  of  an  employment,  as  it  is  known  to  be  to  the  servant,  and 
his  contributory  negligence.  That,  under  certain  circumstances,  the 
one  sometimes  comes  very  near  the  other,  and  cannot  easily  be  dis- 
tinguished from  the  other,  may  be  conceded ;  but  in  most  cases  there 
is  a  broad  line  of  distinction,  and  it  is  so  in  this  case.  For  years 
employees  worked  in  railroad  yards  in  which  blocks  were  not  used, 
and  yet  no  one  would  charge  them  with  negligence  in  so  doing.  The 
switches  and  rails  were  mere  perils  of  the  employment.  Assumption 
of  risk  is  in  such  cases  the  acquiescence  of  an  ordinarily  prudent  man 
in  a  known  danger,  the  risk  of  which  he  assumes  by  contract.  Con- 
tributory negligence  in  such  cases  is  that  action  or  nonaction  in  dis- 
regard of  personal  safety  by  one  who,  treating  the  known  danger  as 
a  condition,  acts  with  respect  to  it  without  due  care  of  its  conse- 
quences. The  distinction  has  been  recognized  by  the  supreme  court 
of  the  United  States.  In  Railway  Co.  v.  O'Brien,  161  U.  S.  451,  the 
court  said : 

"  The  second  instruction  was  properly  refused  because  it  confused 
two  propositions,  —  that  relating  to  the  risks  assumed  by  an  employee 
in  entering  a  given  service,  and  that  relating  to  the  amount  of  vigi- 
lance that  should  be  exercised  under  given  circumstances." 

In  Hesse  v.  Railroad  Co.,  58  Ohio  St.  167,  169,  Judge  Shauck, 
speaking  for  the  supreme  court  of  Ohio,  said: 

"  Acquiescence  with  knowledge  is  not  synonymous  with  contribu- 
tory negligence.  One  having  full  knowledge  of  defects  in  machinery 
with  which  he  is  employed  may  yet  use  the  utmost  care  to  avert  the 
dangers  which  they  threaten.** 


796  NAREAMORE  V.   CLEVEL-iND,   ETC.,   EY.    CO.       [CHAP.    XiV. 

The  distinction  is  exceedingly  well  brought  out  in  Railway  Co.  v. 
Baker,  33  C.  C.  A.  468,  91  Fed.  224,  by  Judge  Woods,  speaking  for 
the  circuit  court  of  appeals  for  the  Seventh  Circuit.  There  the  action 
was  for  damages  against  a  railroad  company  for  injury  sustained  by 
reason  of  a  breach  of  a  federal  statute  requiring  the  company  to  fur- 
nish grab  irons.  The  statute,  out  of  abundant  caution,  expressly 
provides  that  the  continued  service  of  the  employee  with  knowledge 
of  the  breach  of  statutory  duty  by  the  company  should  not  be  regarded 
as  an  assumption  of  the  risk.  The  court  held  that  this  proviso  did 
not  prevent  the  company  from  successfully  maintaining  the  defence 
of  contributory  negligence.  Assumption  of  risk  and  contributory 
negligence  approximate  where  the  danger  is  so  obvious  and  imminent 
that  no  ordinarily  prudent  man  would  assume  the  risk  of  injury  there- 
from. But  where  the  danger,  though  present  and  appreciated,  is  one 
which  many  men  are  in  the  habit  of  assuming,  and  which  prudent 
men  who  must  earn  a  living  are  willing  to  assume  for  extra  compen- 
sation, one  who  assumes  the  risk  cannot  be  said  to  be  guilty  of  con- 
tributory negligence  if,  having  in  view  the  risk  of  danger  assumed, 
he  uses  care  reasonably  commensurate  with  the  risk  to  avoid  injurious 
consequences.  One  who  does  not  use  such  care,  and  who,  by  reason 
thereof,  suffers  injury,  is  guilty  of  contributory  negligence,  and  can- 
not recover,  because  he,  and  not  the  master,  causes  the  injury,  or 
because  they  jointly  cause  it.  Many  authorities  hold  that  contrib- 
utory negligence  is  a  defence  to  an  action  founded  on  a  violation  of 
statutory  duty,  and  this  undoubtedly  is  the  proper  view.  Such  is  the 
case  of  Krause  v.  Morgan,  53  Ohio  St,  26,  where  the  employee,  in 
spite  of  a  warning  from  his  superior,  and  in  the  face  of  the  most 
palpable  danger,  exposed  himself  to  certain  injury,  and  then  sought 
to  hold  his  employer  liable  because  he  had  not  employed  the  statutory 
methods  of  protecting  him  from  the  danger.  In  Railway  Co.  v.  Craig, 
19  C.  C.  A.  631,  73  Fed.  642,  we  held  that  the  Krause  Case  was  one 
jf  contributor}'  negligence,  and  followed  it  as  such.  The  syllabus 
confuses  the  difference  between  assumption  of  risk  and  contributory 
negligence,  but  the  syllabus  and  opinion  are,  of  course,  to  be  restrained 
to  the  facts.  The  following  cases,  relied  on  by  counsel  for  the  railway 
company,  were  also  cases  of  contributory  negligence  in  suits  for  vio- 
lation of  specific  statutory  duty :  Coal  Co.  v.  Estievenard,  53  Ohio  St. 
43 ;  Coal  Co.  v.  Muir,  20  Colo.  320 ;  Holum  v.  Railway  Co.,  80  Wis. 
299;  Grand  v.  Railroad  Co.,  83  Mich.  564;  and  Taylor  v.  Manu- 
facturing Co.,  143  Mass.  470.  In  the  last  two  cases  the  distinction 
between  contributory  negligence  and  assumption  of  risk  is  clearly 
referred  to. 

For  the  reasons  given,  we  think  the  court  below  was  in  error  in 
holding  that  the  plaintiff  assumed  the  risk  of  injury  from  the  failure 
of  the  defendant  to  comply  with  the  statute  passed  for  his  protection, 
and  that  the  case  should  have  been  submitted  to  the  jury  on  the  issue 


CHAP.  XXV.]      RISK  AS  AFFECTED  BY  STATUTE.  797 

whether,  assuming  the  unblocked  guard  rails  and  frogs  as  a  condition 
of  the  situation,  he  used  due  care  to  avoid  injury  therefrom.  Judg- 
ment reversed,  at  costs  of  the  defendant,  with  directions  to  order  a 
new  trial 


KILPATEICK   V.    GRAND   TRUNK   EY.    CO. 

74  Vt.  288.     1902. 

Action  by  Cornelius  Kilpatrick  against  the  Grand  Trunk  Railway 
Company.  From  a  judgment  in  favor  of  the  plaintiff,  the  defendant 
brings  exceptions. 

Stafford,  J.  The  plaintiff  is  seeking  to  recover  for  injuries  sus- 
tained by  him,  as  an  employee  of  the  defendant,  in  consequence  of 
the  latter's  running  a  car  of  its  own,  equipped  with  a  side  ladder  in- 
stead of  a  ladder  upon  the  end  or  inside,  in  contravention  of  the 
statute,  and  having  a  post  dangerously  near  its  track;  whereby  the 
plaintiff,  using  the  ladder  to  mount  the  car  while  in  motion,  was 
knocked  off  by  the  post,  and  his  foot  run  over  by  the  wheels. 

Statement  of  Facts  and  History  of  the  Case.  The  Grand  Trunk 
Railway  runs  through  the  village  of  Island  Pond,  where  it  has  a  large 
yard,  fourteen  or  fifteen  tracks  wide.  The  tracks  extend  east  and 
west.  On  the  south  side  are  freight  sheds,  —  a  long  line  of  buildings. 
On  the  north  side  is  a  hotel.  Connecting  the  sides  is  an  overhead 
bridge,  built  by  the  railway  company,  some  twenty  feet  above  the 
tracks,  and  supported  by  eight  or  ten  standards  about  twenty  feet 
apart,  each  standard  consisting  of  two  posts  strengthened  by  a  brace, 
and  framed  at  the  bottom  into  a  timber  resting  upon  the  ground. 
The  passenger  station  is  near  the  middle  of  the  yard,  dividing  it  into 
what  are  called  the  east  end  and  the  west  end.  The  bridge  is  twenty- 
five  or  thirty  feet  west  of  the  station.  All  but  two  of  the  tracks  are  on 
the  north  side  of  the  station;  those  two  are  on  the  south  side,  and 
are,  first  from  the  station,  the  main  line,  and,  second,  the  freight- 
shed  track.  A  platform  extends  around  the  station  and  under  the 
bridge.  The  freight-shed  track  is  fifty  or  sixty  rods  long,  and  at  each 
end  joins  the  main  line,  having  probably  two-thirds  of  its  length  west 
of  the  bridge ;  and  it  runs  so  near  one  of  the  standards  that  the  north 
rail  is  only  forty-one  inches  from  it;  so  that,  when  a  freight  car  is 
on  the  track  opposite  the  standard,  the  distance  between  the  car  and 
the  post  is  only  twenty  inches. 

The  accident  occurred  on  the  14th  of  October,  1898,  and  the  fore- 
going description  is  to  be  understood  as  of  that  date.  The  location 
of  the  standards  had  not  been  changed  since  the  bridge  was  built,  in 
1889,  but  the  location  of  the  freight-shed  track  had  been  changed, 
bringing  it  thus  near  the  post,  instead  of,  as  before,  at  some  consid- 


798  KILPATRICK   V.   GRAND   TRUNK   RY.    CO.        [CHAP.   XXV. 

erable  distance  from  it.  This  change  had  been  made  about  a  year 
before  the  accident.  No  other  standard  or  post  in  the  yard  stood 
80  near  the  track  by  six  inches,  and  most  of  them  were  still  farther 
away. 

Kilpatrick  had  worked  for  the  company  in  this  yard  nearly  all  the 
time  for  eighteen  years.  From  May  until  the  September  before  his 
accident  in  October,  he  had  been  yard  master.  Now  he  was  acting 
as  switchman,  and  it  was  his  duty  to  assist  in  shunting  cars,  making 
up  trains,  and  letting  them  in  and  out  of  the  yard  under  direction  of 
the  foreman. 

The  defendant  introduced  no  testimony,  and  the  only  witnesses, 
aside  from  the  physician,,  were  the  engineer  of  the  train  upon  which 
the  plaintiff  was  riding  when  the  accident  occurred  and  the  plaintiff 
himself.  The  engineer  did  not  see  what  happened,  so  that  the  case 
rested  substantially  upon  the  plaintiff's  own  story.  There  had  been 
a  previous  trial  resulting  in  a  verdict  and  judgment  for  the  plaintiff, 
which  this  court  reversed  on  the  ground  that  the  plaintiff  was  guilty 
of  contributory  negligence  as  matter  of  law.  Kilpatrick  v.  Railway 
Co.,  72  Vt.  263.  Upon  the  second  trial,  the  evidence  was  so  far 
varied  that  the  question  was  submitted  to  the  jury. 

The  plaintiff's  story  was  that  about  one  o'clock  in  the  morning  he 
started  from  a  point  near  the  west  end  of  the  yard,  where  he  had  been 
at  work,  and  came  to  the  passenger  station  on  his  way  to  do  other 
work  at  the  east  end.  As  he  came  upon  the  platform,  he  saw  ap- 
proaching from  the  east,  on  the  freight-shed  track,  a  train  of  four 
box  cars  and  one  empty  coal  car,  pushed  by  a  backing  engine  attached 
to  the  east  end.  He  knew  that  there  were  cars  already  standing  on 
this  same  track  farther  west,  beyond  the  bridge,  and  considering  it 
his  duty  to  be  there  when  the  train  should  come  up  to  them,  and 
thinking  there  was  not  time  for  him  to  walk  or  run  ahead  in  the 
dark,  and  in  order  to  be  where  he  might  the  better  signal  to  the  en- 
gineer with  the  lantern  he  was  carrying,  and  where  he  might  put  on 
the  brake  if  necessary  to  prevent  a  too  violent  collision  which  might 
break  the  drawbars,  or  even  throw  the  standing  cars  foul  upon  the 
main  line,  where  they  would  be  in  the  way  of  trains  soon  to  be  let 
in,  he  made  up  his  mind  to  mount  the  first  car.  This  was  a  Grand 
Trunk  box  car,  and  was  equipped  with  a  side  ladder  at  the  west  end 
on  the  north  side,  the  side  towards  him,  and  had  no  ladder  on  the 
end.  So,  having  his  left  arm  through  the  bail  of  the  lantern  and 
both  hands  free,  he  caught  hold  of  a  round  of  the  ladder  with  his 
right  hand,  and  stepped  with  his  left  foot  upon  the  truck  box  under 
the  car,  the  box  that  covers  the  end  of  the  axle.  His  foot  slipped 
from  the  box  to  the  ground,  and,  running  along  a  few  steps  beside  the 
car,  he  tried  again  in  the  same  way,  and  succeeded,  drawing  himself 
up  so  far  on  the  ladder  that  his  feet  were  on  the  bottom  round  and 
his  head  at  the  top  of  the  car,  when  he  struck  against  the  post  of  the 


I 


CHAP.    XXV.]  RISK   AS   AFFECTED  BY   STATUTE.  799 

standard,  and  was  knocked  off;  and  the  wheels  passed  over  his  foot, 
inflicting  the  injury  for  which  he  claimed  to  recover.  As  to  the  speed 
of  the  train  he  had  said  on  the  first  trial  that  he  could  not  tell  accu- 
rately, but,  upon  being  pressed  for  an  opinion,  had  estimated  it  at 
eight  or  nine  miles  an  hour.  Upon  this  trial  he  reduced  his  estimate 
to  three  or  four  miles,  the  rate  at  which  the  engineer,  also,  testified 
the  train  was  running. 

The  Statutes  Eelied  Upon.  V.  S.  §§  3886,  3887,  declare  that  no 
railroad  corporation  shall  run  a  car  of  its  own  with  a  ladder  or  steps 
to  the  top  of  the  same  on  the  side,  but  that  the  same  shall  be  on  the 
end  or  inside  of  the  car ;  and  that  it  shall  forfeit  $50  for  each  day's 
neglect  to  comply  with  this  requirement,  and  be  liable  for  damages 
and  injuries  to  passengers  and  employees  resulting  from  such  neglect. 
This  car  was  one  of  the  defendant's  own,  and  was  being  run  in  viola- 
tion of  the  statute.  The  trial  court  correctly  held  that  its  action  in 
that  respect  was  negligence  in  law.  Such  was  the  holding  of  this 
court  when  this  case  was  here  the  first  time.     (72  Vt.  263.) 

The  Questions  Eaised  Below.  At  the  close  of  the  plaintiff's  testi- 
mony, the  defendant  moved  for  a  verdict  on  two  grounds :  ( 1 )  That 
the  plaintiff  was  guilty  of  contributory  negligence;  (2)  that  he  had 
assumed  the  risk.  The  court  said  it  would  hold  pro  forma  that  he 
did  not  assume  the  risk ;  that  the  defendant  was  guilty  of  negligence 
as  matter  of  law ;  that  it  thought  the  only  question,  aside  from  dam- 
ages, was  that  of  contributory  negligence,  —  which  it  thought  should 
be  submitted  to  the  jury.  To  the  ruling  that  the  defendant  was  negli- 
gent as  matter  of  law,  and  the  ruling  that  the  plaintiff  did  not  assume 
the  risk,  the  defendant  excepted,  and  requested  the  court  to  hold,  as 
matter  of  law,  that  the  side  ladder  was  not  the  proximate  cause  of 
the  injury.  It  did  not  ask  to  have  it  left  to  the  jury  as  a  question  of 
fact,  and  evidently  did  not  desire  that;  for,  although  it  excepted  to 
the  refusal  of  the  court  to  hold  that  the  side  ladder  was  not  the  proxi- 
mate cause,  it  did  not  except  to  its  omission  to  submit  the  question  to 
the  jury,  nor  to  the  charge  itself,  wherein  it  was  assumed  that  the 
injury  resulted  from  the  presence  of  the  side  ladder.  In  view  of  the 
attitude  taken,  the  court  had  a  right  to  understand  that  the  defendant 
stood  upon  its  point  of  law  alone.  So  we  think  it  is  not  open  to  it 
now  to  argue  that  the  question  was  one  of  fact,  and  ought  to  have 
been  submitted  to  the  jury. 

Proximate  Cause.  In  refusing  to  hold,  as  matter  of  law,  that  the 
side  ladder  was  not  the  proximate  cause,  there  was  no  error.  That 
certainly  could  not  be  ruled  as  matter  of  law.  .  .  .  We  think  the 
court  was  right  in  assuming  that  the  side  ladder  was  the  cause  of  the 
injury,  and  that  the  defendant  was  liable,  unless  the  plaintiff  was 
guilty  of  contributory  negligence,  or  had  assumed  the  risk.  .  .  . 

Assumption  of  Risk.  Did  the  court  err  in  its  pro  forma  ruling 
that  the  plaintiff  did  not  assume  the  risk  ?    The  doctrine  of  assump- 


800  KILPATRICK   V.   GRAND   TRUNK   RY.    CO.        [CHAP,   XXV. 

tion  of  risk  may  be  regarded  as  oiily  ooe  phase  of  the  broader  doctrine 
expressed  by  the  maxim,  volenti  non  fit  injuria.  One  is  not  to  be 
allowed  to  recover  for  an  injury  which  he  has  voluntarily  brought 
upon  himself,  and  he  has  brought  it  upon  himself  voluntarily  if 
it  resulted  from  a  course  of  action  which  he  took  with  full  knowledge 
and  appreciation  of  the  risk. .  Moreover,  one  who  enters  upon  a  regu- 
lar employment  is  presumed  to  know  and  appreciate  the  risks  ordi- 
narily incident  thereto,  and  he  assumes  them.  And  when,  in  the 
course  of  his  employment,  a  special  and  obvious  risk  is  presented  to 
him,  one  not  ordinarily  incident  to  the  business,  he  may,  as  a  rule, 
refuse  to  accept  it,  and  if  he  choose  to  encounter  it  he  assumes  that 
also.  Carbine's  Adm'r  v.  Eailroad  Co.,  61  Vt.  348 ;  Dumas  v.  Stone, 
65  Vt.  442.  The  latter  rule  is  subject  to  some  exceptions,  but  they 
are  not  in  point  here,  and  we  do  not  stop  to  notice  them.  But  some- 
times the  legislature,  in  tenderness  for  a  class  liable  to  abuse  or 
oppression,  railroad  or  factory  hands  for  example,  forbids  the.  use  of 
a  certain  dangerous  appliance,  and  gives  an  action  to  employees  who 
may  be  injured  as  the  result  of  using  it.  Such  is  this  case.  Now,  it 
must  be  apparent  to  every  one  that  the  legislature  understood  per- 
fectly well  that  the  employees  who  might  be  injured  by  using  the 
appliance  would  be  using  it  knowingly  and  voluntarily.  In  the  case 
of  a  side  ladder,  for  instance,  they  could  not  have  expected  that  em- 
ployees would  not  know  they  were  using  a  side  ladder ;  still  they  give 
an  action  for  the  injury. 

So  we  think  the  ordinary  doctrine  of  assumption  of  risk  does  not 
apply  to  a  case  where  the  negligence  of  the  employer  consists  in  the 
disregard  of  a  statutory  duty  imposed  upon  him  for  the  protection  of 
his  emplo3'ees;  certainly  not  when  an  action  is  expressly  given  for 
the  breach.  And  this  is  exactly  the  difference  between  cases  of  neg- 
ligence arising  from  the  disregard  of  a  statutory  obligation,  like  the 
present,  and  cases  of  negligence  arising  from  the  failure  of  the  em- 
ployer to  fulfill  his  common-law  duty  of  providing  safe  appliances,  — 
that  in  the  latter  case  the  common-law  duty  is  to  be  applied  in  con- 
nection with  the  common-law  rule  of  the  assumption  of  risk,  while  in 
the  former  the  statutory  rule  is  accompanied  by  the  bestowal  of  a 
right  of  action  for  the  breach  of  it,  in  favor  of  those  who  must  neces- 
sarily be  deprived  of  any  action  by  the  application  of  the  common- 
law  rule  of  the  assumption  of  risk ;  and  consequently  the  common-law 
rule  is  inconsistent  with  the  statute,  and  falls  to  the  ground.  Bad- 
deley  v.  Earl  Granville,  19  Q.  B.  Div.  423. 

On  the  other  hand,  the  doctrine  of  assumption  of  risk  may  be 
regarded  as  purely  a  matter  of  contract,  express  or  implied,  between 
master  and  servant;  and,  when  so  regarded,  the  servant's  inability 
to  recover  is  put  on  the  ground  that  he  was  hired  to  do  that  very 
thing,  and  paid  for  taking  that  very  risk.  If  that  theory  should  bo 
adopted  in  this  case,  then  the  first  question  would  be  whether,  i  i 


CHAP.   XXV.]  RISK  AS   AFFECTED   BY   STATUTE.  801 

view  of  the  statute,  the  plaintiff  could  assume  this  risk  as  a  part  of 
his  contract. 

The  statute  is  a  criminal  one  to  the  extent  that  it  imposes  a  pen- 
alty of  $50  for  each  day's  disobedience;  and  it  also  gives,  as  a  still 
more  efficient  means  of  securing  its  observance,  a  private  action  in 
favor  of  the  person  injured.  How  plain  it  is  that  the  act  is  an  exer- 
cise of  the  police  power  of  the  state  for  the  protection  of  life  and 
limb  among  a  large  class  of  its  people ;  and  how  easy  it  would  be  to 
thwart  the  whole  purpose  of  the  legislature  by  holding,  as  we  are 
asked  to  do,  that  the  class  thus  sought  to  be  protected  not  only  might 
formally  contract  away  their  protection,  and  relieve  the  road  of  its 
public  duty  thus  imposed,  but  that  the  very  fact  of  their  using  the 
ladder,  seeing  and  knowing  it  was  on  the  side  of  the  car,  constituted 
in  law  such  a  contract.  We  cannot  adopt  so  bold  a  conception  of 
judicial  duty. 

If  the  doctrine  of  assumption  of  risk  is  to  be  regarded  as  contrac- 
tual, then  we  hold  that  the  statutory  protection  cannot  be  bought  and 
sold,  but  that  the  policy  of  the  law  forbids  it  in  the  interest  of  public 
welfare.  This  very  question  was  thus  decided  in  Narramore  v.  Rail- 
road Co.,  96  Fed.  298,  where  the  judgment  is  laid  down  by  Taft,  J., 
with  a  breadth  of  view  and  vigor  of  reasoning  that  leaves  little  need 
or  excuse  for  treating  the  subject  further.  There,  too,  the  authorities 
on  both  sides  are  cited,  criticised,  and  distinguished. 

If  it  be  objected  that  the  statute  when  thus  read  deprives  the 
laborer  of  his  right  to  make  his  own  contracts,  the  answer  is  to  be 
found  in  the  principle  that  the  state  has  a  right  to  protect  its  poor 
and  helpless,  even  to  that  extent,  if  need  be.  Iron  Co.  v.  Harbison, 
183  U.  S.  13.  Such  is  the  basis  of  the  decisions  that  uphold  the  Utah 
labor  law  restricting  the  hours  of  mining  work  to  eight  per  day 
(Short  V.  Mining  Co.,  20  Utah,  20;  Holden  v.  Hardy,  169  U.  S.  366), 
statutes  that  forbid  the  employment  of  children  in  certain  callings, 
the  store-order  acts,  and  the  long-standing  statutes  against  usury,  in 
defence  of  one  of  the  last  named  of  which  this  court  held,  some  twenty 
years  ago,  that  even  a  release  under  seal,  given  by  the  borrower  at  the 
time  of  the  loan,  did  not  bar  his  right  to  recover  the  unlawful  rate, 
declaring  that  "  the  statute  was  intended  for  the  protection  of  the 
weak  against  the  strong,  and  public  policy  requires  that  it  should  not 
be  evaded  nor  its  force  abated."  Rowell,  J.,  in  Herrick  v.  Dean,  54 
Vt.  568. 

Everybody  knows  that  there  are  large  classes  who  get  their  living 
from  day  to  day,  in  such  service  as  that  in  which  the  plaintiff  was 
engaged,  who  must  work  where  they  are  working,  and  keep  their  job 
at  all  hazards,  if  they  would  not  bring  themselves  and  their  families 
to  want.  To  say  to  such  men,  "  If  you  do  not  like  the  conditions,  you 
may  quit,"  is  often  only  a  heartless  mockery.  The  legislature  under- 
stood this;  and  the  act  we  are  considering  was  an  attempt  to  better 

61 


802  KILPATRICK   V.   GRAND   TRUNK   RY.    CO.        [CHAP.    XXV. 

the  condition  of  that  very  class  by  compelling  the  employer  to  yield 
something  of  profit  in  the  interest  of  humanity,  and  to  save  the  lives 
and  limbs  of  his  workmen  by  adopting  safer  instruments  of  labor. 
It  seems  to  us  a  court  should  be  very  slow  to  construe  the  beneficial 
purpose  out  of  such  a  law,  or  make  it  of  no  effect.  On  broad  lines 
of  public  good  and  social  progress,  it  is  plain  that  such  legislation 
must  be  largely  looked  to  if  government  is  to  remain  firm  and  secure 
in  the  respect  and  affection  of  the  people. 

Contributory  Negligence.  Yet  it  does  not  follow  that  an  employee 
who  is  injured,  by  reason  of  the  neglect  of  his  employer  to  comply 
with  the  statute,  can  recover  under  all  circumstances.  By  the  lan- 
guage of  the  statute,  the  right  to  recover  is  limited  to  injuries  "  re- 
sulting from  such  neglect";  and,  as  this  court  has  once  decided  in 
this  very  case,  that  means  resulting  from  such  neglect  alone;  and 
the  plaintiff  must,  as  in  other  actions  of  this  character,  show  that  his 
own  negligence  did  not  contribute  to  the  injury.  But  the  doctrine 
of  contributory  negligence  is  entirely  separate  and  distinct  in  theory 
from  the  doctrine  of  assumption  of  risk,  although,  as  a  practical 
matter,  the  fact  that  the  employee  knew  and  appreciated  the  risk  he 
was  running  may,  in  the  circumstances,  justify  or  even  require  a 
finding  that  he  was  guilty  of  contributory  negligence;  or  the  negli- 
gence may  consist  entirely  in  the  manner  in  which  the  risk  is  met. 

To  speak  concretely,  take  this  very  case,  —  the  use  of  a  side  ladder. 
They  had  been  used  by  employees  for  years,  and  doubtless  by  such 
use  the  risk  had  been  assumed.  Now,  by  reason  of  the  statute,  the 
risk  is  not,  and  cannot  be,  assumed.  Yet  the  use  of  it,  under  the 
given  circumstances,  may  be  negligence,  and  may  even  be  so  gross  as 
to  be  negligence  as  matter  of  law. 

The  defendant  here  claimed  that  the  plaintiff  was  guilty  of  con- 
tributory negligence  as  matter  of  law,  and  based  the  claim  mainly 
upon  the  ground  that  the  plaintiff  knew  the  location  of  the  post  and 
the  track,  their  nearness  to  each  other,  and  the  consequent  danger  to 
one  riding  by  the  post  on  a  side  ladder.  The  plaintiff  admitted  that 
he  knew  the  location  of  the  post  and  the  rail  in  a  general  way,  but 
denied  that  he  knew  the  distance  between  the  two,  and  testified  that 
before  the  accident  he  did  not  know  of  any  reason  why  one  could  not 
ride  safely  by  the  post  on  a  side  ladder;  that  he  had  never  tried  it 
or  seen  it  tried,  although  he  had  ridden  safely  past  other  posts  in  the 
Bame  yard.  At  the  first  trial  he  had  testified  as  follows,  referring  to 
the  post  against  which  he  struck :  "  Q.  You  knew  the  location  of  it ; 
you  had  seen  it  there  every  day  for  years  ?  A.  Yes,  sir.  Q.  But  you 
forgot  at  that  moment?  You  did  n't  think  about  it  at  that  moment? 
A.  I  did  n't  think  about  it  at  that  moment.  Q.  Ever  think  about  that 
question  of  getting  injured  as  you  were  riding  along  through  on  those 
cars  anywhere,  —  about  hitting  those  posts  along  there  an3rwhere? 
A.  No,  sir.     Q.  Never  thought  of  it?    A.  No,  sir.     Q.  You  knew 


CHAP.   XXV.]  RISK  AS   AFFECTED   BY   STATUTE.  803 

the  danger  if  you  did  get  hit?  A.  Yes,  sir.  Q.  You  knew,  with 
respect  to  this  one,  that  you  were  liable  to  get  hit,  if  you  had  thought 
of  it?    A.  Yes,  if  I  had  thought  of  it." 

Upon  this  testimony,  we  are  asked  to  say  as  matter  of  law  that  the 
plaintiff  was  guilty  of  contributory  negligence.  We  think  it  was  a 
question  for  the  jury.  Taking  the  plaintiff's  testimony  in  the  light 
most  favorable  to  him,  as  we  are  bound  to  do,  it  means  that,  even  if 
he  had  taken  thought,  he  would  not  have  known  that  he  would  be 
hit  in  the  position  in  which  he  then  was,  but  only  that  he  might  be, 
that  he  was  "  liable  "  to  be ;  and  that  such  thought,  if  it  had  occurred 
to  him,  would  not  have  been  the  recollection  of  some  danger  which 
he  had  thought  of  before,  for  he  says  he  had  never  thought  of  it,  but 
would  have  been  his  opinion  concerning  the  danger  if  it  had  occurred 
to  him  to  form  an  opinion  at  that  time.  The  fact  that  he  did  not  do 
this  at  that  time  is  not  of  itself  negligence  in  law.  It  is  a  fact  to  be 
considered  by  the  jury,  with  all  the  other  facts.  The  law  required 
of  him  the  prudence  of  a  prudent  man.  The  prudent  man  is  not  the 
man  who  never  forgets  anything,  who  is  never  guilty  of  any  inatten- 
tion, who  never  fails  to  think  of  any  possible  danger  to  which  he  is 
exposed.  That  is  the  perfect,  the  infallible  man.  Circumstances 
may  excuse  ignorance,  forgetfulness,  inattention,  whenever  the  jury 
may  reasonably  say  that  a  man  so  placed  might  be  so  ignorant,  or 
forgetful,  or  inattentive,  without  losing  his  right  to  be  called  a  pru- 
dent man  in  the  circumstances.  And  here  the  circumstances  must  be 
attended  to.  The  plaintiff  is  attempting  to  mount  the  car  to  perform 
his  duty.  In  his  first  attempt  his  foot  slips  from  the  box,  and  he  finds 
himself  in  a  position  of  danger.  In  the  moment's  struggle,  his  mind 
intent  upon  its  object,  he  does  not  think  of  the  post  at  all.  Consid- 
ering his  situation  at  the  instant,  can  it  be  said  as  matter  of  law  that 
his  failure  to  think  of  the  post  and  of  his  liability  to  be  struck  by  it 
was  negligence?  There  may  have  been  ample  time  for  him  to  have 
reached  a  place  of  safety  if  his  foot  had  not  slipped.  In  his  second 
attempt,  we  cannot  expect  of  him  quite  the  same  calmness  and  de- 
liberation as  in  his  first.  It  is  the  miscarriage  of  the  first  attempt 
that  has  placed  him  in  an  unexpected  and  dangerous  position,  where 
he  must  decide  and  act  quickly.  .  .  . 

In  view  of  all  the  surroundings  here,  the  duty  of  the  plaintiff  as 
the  defendant's  servant,  the  need,  if  need  there  was,  to  mount  the  car 
to  set  the  brake  or  give  the  signals  or  be  at  the  place  of  collision,  the 
speed  of  the  train,  the  darkness,  the  mischance  of  the  plaintiff  in  his 
first  attempt  to  get  on,  his  knowledge  of  the  post  and  track,  his  ex- 
perience or  want  of  experience  in  passing  there,  his  position  upon  the 
ladder,  the  exigency,  and  his  failure  to  think  at  that  time  of  his 
liability  to  be  struck,  —  in  view  of  all  this,  we  think  it  was  fairly 
within  the  province  of  the  jury  to  determine  whether  the  conduct 
of  the  plaintiff  deserved  to  be  called  negligent.    The  facts  are  not. 


804  DAVIS   COAL   COMPANY  V.   POLLAND.  [CHAP.   XX7. 

in  our  opinion,  sufficiently  decisive  to  make  the  question  one  of 
law. 

The  court  submitted  to  the  jury  the  question  whether  the  plaintiflE 
had  been  guilty  of  contributory  negligence ;  and  to  its  charge  as  given 
upon  this  subject  no  exception  was  taken.  .  .  . 

Judgment  affirmed. 


DAVIS    COAL    COMPANY   v.    POLLAND. 
158  Ind.  607.     1901. 

Plaintiff  was  working  for  the  defendant  as  a  miner  in  the  de- 
fendant's coal  mine.  He  brings  an  action  against  the  defendant 
to  recover  damages  for  personal  injuries  resulting  from  the  caving 
in  of  a  part  of  the  roof  of  the  mine.  Plaintiff  claims  that  the 
accident  was  due  to  the  negligence  of  the  defendant  in  failing  to 
comply  with  certain  statutory  provisions  referred  to  in  the  opinion. 

From  a  judgment  for  plaintiff,  defendant  appeals. 

Baker,  J.  .  .  .  The  parts  of  the  statutes  on  mines  that  are  perti- 
nent provide :  "  Miners'  bosses  shall  visit  their  miners  in  their  work- 
ing places  at  least  once  every  day  where  any  number  not  less  than 
ten  nor  more  than  fifty  miners  are  employed,  and  as  often  as  once 
every  two  days  when  more  than  fifty  miners  are  employed."  Section 
7447,  Burns'  Rev.  St.  1901  (section  5472  a,  Horner's  Rev.  St.  1901). 
"  The  owner,  operator,  agent,  or  lessee  of  any  coal  mine  in  this  state 
shall  keep  a  sufficient  supply  of  timber  at  the  mine,  and  the  owner, 
operator,  agent,  or  lessee  shall  deliver  all  props,  caps,  and  timbers 
(of  proper  length)  to  the  rooms  of  the  workmen  when  needed  and 
required,  so  that  the  workmen  may  at  all  times  be  able  to  properly 
secure  the  workings,  from  caving  in."  Section  7466,  Burns'  Rev.  St. 
1901  (section  5480  g,  Horner's  Rev.  St.  1901).  "The  mining  boss 
shall  visit  and  examine  every  working  place  in  the  mine  at  least 
every  alternate  day  while  the  miners  of  such  place  are  or  should  be  at 
work,  and  shall  examine  and  see  that  each  and  every  working  place  is 
properly  secured  by  props  and  timber  and  that  safety  of  the  mine  is 
assured.  He  shall  see  that  a  sufficient  supply  of  props  and  timber  are 
always  on  hand  at  the  miners'  working  places."  Section  7472,  Burns' 
Rev.  St.  1901  (section  5480m,  Horner's  Rev.  St.  1901).  "For  any 
injury  to  persons  or  property  occasioned  by  any  violation  of  this  act, 
or  any  wilful  failure  to  comply  with  any  of  its  provisions,  a  right  of 
action  against  the  owner,  operator,  agent,  or  lessee  shall  accrue  to  the 
party  injured  for  the  direct  injury  sustained  thereby."  Section  7473, 
Bums'  Rev.  St.  1901  (section  5480  n.  Homer's  Rev.  St.  1901). 

Two  questions  arise  on  the  complaint,  —  assumption  of  risk,  and 
contributory  negligence. 


CHAP.  XXV.]      RISK  AS  AFFECTED  BY  STATUTE.  805 

First.  The  complaint  does  not  negative  the  employee's  knowledge 
of  the  employer's  negligent  failure  to  perform  the  duties  imposed  by 
statute,  and  of.  the  dangers  resulting  therefrom. 

If  the  cause  of  action  in  this  case  were  based  upon  the  employer's 
neglect  to  perform  a  common-law  duty,  or  if  there  were  no  valid  dis- 
tinction between  neglect  of  a  common-law  duty  and  neglect  of  a  spe- 
cific statutory  duty,  the  complaint  would  be  fatally  defective.  Ames 
V.  Railway  Co.,  135  Ind.  363 ;  Railroad  Co.  v.  Kemper,  147  Ind.  561 ; 
Whitcomb  v.  Oil  Co.,  153  Ind.  513. 

By  the  common  law  an  employer  is  required  to  exercise  that  degree 
of  care  in  providing  his  employee  a  safe  working  place  and  tools  and 
appliances  which  a  reasonably  prudent  person  would  exercise  under 
like  circumstances.  The  rule  is  general.  There  is  no  fixed  quantum 
of  care  that  must  be  exercised  invariably  in  all  cases.  In  each  case 
the  quantum  of  care  required  by  the  common-law  rule  is  dependent 
largely  upon  the  circumstances  of  that  case,  and,  to  quite  an  extent, 
upon  what  the  jury  and  court  may  think  a  reasonably  prudent  per- 
son would  have  done  under  those  circumstances.  The  manner  of 
constructing  the  working  place,  and  the  selection  of  tools  and  appli- 
ances, and  the  keeping  of  them  in  proper  repair,  therefore,  are  left 
to  the  employer's  judgment  and  discretion  without  limitation  except 
this :  that  he  must  do  what  a  reasonably  prudent  nerson  would  do  in 
his  place.  Now,  if  the  employer  does  what  he  thinks  comes  up  to  this 
general  standard,  and  if  the  employee  examines  the  place  and  appli- 
ances, adds  his  judgment  to  that  of  the  employer,  and  agrees,  as  one 
of  the  terms  of  his  contract  of  employment,  that  the  employer  has 
done  all  that  a  reasonably  prudent  person  should  do  under  the  cir- 
cumstances, and  that  he  will  notify  the  employer  of  after-occurring 
defects,  the  employee  expressly  assumes  the  risks  that  are  known  to 
him  or  might  have  become  known  by  the  exercise  of  ordinary  care,  of 
which  he  has  made  no  complaint  to  the  employer.  So,  also,  the  condi- 
tions being  the  same,  except  that  the  assumption  of  risk  is  not  ex- 
pressly included  in  the  contract  of  employment,  the  law  reads  into 
the  contract,  from  the  employee's  knowledge  and  silence,  his  agree- 
ment to  assume  all  known  and  obvious  risks.  Whether  express  or 
implied,  assumption  of  risk  is  a  matter  of  contract.  In  either  case 
the  employee  whose  injury  is  due  to  a  known  or  an  obvious  defect  in 
place  or  appliances,  which  he  has  suffered  to  continue  without 
objection,  cannot  hold  the  employer  liable,  —  not  because  the  em- 
ployer was  not  in  fact  negligent,  for  he  may  not  have  exercised  ordi- 
nary care;  not  because  the  employee  was  contributorily  negligent, 
for  at  the  time  and  under  the  circumstances  of  the  accident  he  may 
have  used  due  care  to  avoid  injury;  but  because  the  employee  has 
agreed  for  a  sufficient  consideration  to  absolve  the  employer,  and  to 
assume  for  himself  the  risk  of  such  injury. 

If  a  statute  is  a  mere  affirmation  of  the  common-law  duty  of  the 


806  DAVIS   COAL   COMPANY   V.   POLLAND.  [CHAP.   XXV. 

employer  with  respect  to  providing  safe  working  places  and  tools,  the 
rule  as  to  assumption  of  risk  remains  in  force.  The  standard  of  care 
continues  to  be  the  conduct  of  the  reasonably  prudent  person  under 
like  circumstances,  and  the  means  of  measuring  up  to  it  may  still  be 
the  subject  for  the  joint  judgment  and  agreement  of  the  employer 
and  the  employee. 

If,  however,  the  statute,  as  in  this  case,  sets  up  a  definite  standard, 
and  requires  specific  measures  to  be  taken  by  the  employer  in  pro- 
viding safe  working  places  and  appliances,  other  considerations  come 
into  view.  The  very  fact  of  such  legislation  indicates  that  the  law- 
makers believed  that  the  operation  of  the  common-law  rules  did  not 
afford  the  employee  sufficient  protection;  that,  under  the  develop- 
ment of  the  modem  industrial  system,  tending  to  centralization  of 
capital  and  impersonal  management,  the  employee  did  not  stand 
upon  a  footing  of  equality  with  the  employer  in  contracting  for  his 
safety;  and  that  the  necessity  of  earning  the  daily  wage  frequently 
constrained  the  employee  to  put  up  with  defective  place  and  tools 
without  complaint,  by  reason  of  his  fear  of  the  consequences  of  com- 
plaining. From  these  conditions  grew  the  necessity,  or  at  least  the 
propriety,  of  requiring  certain  specific  measures  to  be  taken  for  the 
protection  of  employees.  The  manner  of  constructing  and  maintain- 
ing the  working  places  and  appliances  so  as  to  measure  up  to  the  gen- 
eral standard  of  the  reasonably  prudent  person  was  no  longer  left  to 
the  judgment  of  the  employer.  A  definite  standard  was  fixed  by  the 
legislature.  It  is  the  duty  of  the  employer  to  use  the  very  means 
named  in  the  statute.  He  is  not  at  liberty  to  adopt  others,  though,  in 
his  opinion,  they  are  more  efficacious  than  those  prescribed  by  the 
lawmakers.  How,  then,  can  there  be  any  lawful  basis  for  an  agree- 
ment, implied  or  express,  that  the  employer  shall  violate  the  law,  and 
that  the  employee  shall  be  remediless  ? 

The  doctrine  of  assumed  risk,  in  its  essential  nature,  constitutes  a 
defence.  The  employee  brings  his  action  for  damages  for  personal 
injury.  It  is  based  upon  the  employer's  negligent  failure  to  dis- 
charge a  duty  owing  to  the  employee.  Duties  and  rights  are  cor- 
relative, —  what  is  the  duty  of  the  employer  to  do  for  his  employee, 
is  the  right  of  the  employee  to  require  of  his  employer.  The  em- 
ployer says,  "  You  have  no  right  of  action  against  me,  because  you 
contracted  with  me  long  before  the  accident  happened  that  you  would 
assume  the  very  risk  you  are  now  complaining  of."  Such  a  contract, 
when  the  duty  of  the  employer  and  the  right  of  the  employee  are 
measured  by  the  indefinite  standard  of  care  that  a  reasonably  prudent 
person  would  have  exercised  under  like  circumstances,  is  enforceable. 
And  so  the  heart  of  the  present  case  is  this :  Is  a  contract  enforceable 
by  which  the  employee  waives  in  advance  his  right  of  having,  and 
relieves  his  employer  of  the  duty  of  providing,  the  specific  safeguards 
lequired  by  the  statute? 


CHAP.   XXV.]  RISK   AS   AFFECTED   BY   STATUTE.  807 

The  statute  does  not,  in  terms,  forbid  the  making  of  such  a  con- 
tract ;  and  it  is  said  that  the  court  should  not  hold  it  to  be  impliedly 
forbidden,  because,  for  one  thing,  the  statute  provides  a  punishment 
by  fine  for  the  employer's  violations,  and  a  second  punishment  for 
the  same  offence  is  not  permissible.  The  action  of  the  employee  is 
solely  to  recover  compensation  for  actual  damages.  The  payment  of 
compensative  damages  is  not  punishment.  The  right  of  the  state  to 
recover  a  penalty  and  the  right  of  an  aggrieved  party  to  recover  com- 
pensation are  not  inconsistent.  Indeed,  the  right  to  the  penalty  (in 
the  form  of  punitive  damages)  as  well  as  to  compensation  might  have 
been  given  to  the  aggrieved  party,  —  as  in  the  telegraph  cases.  Tel- 
egraph Co.  V.  Henley,  157  Ind.  90.  Since  the  two  rights  (or  sanc- 
tions for  enforcing  observance)  are  independent  of  each  other,  the 
presence  of  the  penal  provision  in  the  statute  makes  neither  for  nor 
against  the  right  to  compensation  free  from  the  defence  of  assumed 
risk.  The  case  stands  as  if  the  employer's  failure  to  comply  with  the 
requirements  of  the  act  had  not  been  made  a  misdemeanor. 

It  is  true,  as  propounded  by  counsel,  that  the  state  cannot  compel 
an  injured  employee  to  bring  an  action  for  damages,  nor  prevent  his 
settling  or  dismissing  it  if  begun.  But  the  legislature  may  well  have 
believed  that  the  natural  desire  of  employees  to  recover  compensation 
for  injuries  would  lead  employers  to  fulfil  the  law.  At  any  rate, 
those  employers  who  are  brought  into  court  to  defend  have  nothing 
to  complain  of  on  this  score.  The  employee's  right  to  control  his  law- 
suit, however,  does  not  touch  the  question  of  his  right  to  bind  him- 
self in  advance  to  absolve  the  employer  from  the  perfonnance  of 
specific  statutory  duties. 

Freedom  of  contract  should  not  be  lightly  interfered  with.  As  a 
general  rule,  the  right  of  contracting  as  one  sees  fit  stands  untram- 
melled. But  the  state  has  power  to  restrict  this  right  in  the  interest 
of  public  health,  morals,  and  the  like.  When,  in  the  present  case,  it 
is  pointed  out  that  the  legislature  has  failed  in  terms  to  deny  the 
employee's  right  to  assume  the  risks  from  his  employer's  disregard 
of  the  statute,  the  question  is  not  ended.  If  the  legislature  has 
clearly  expressed  the  public  policy  of  the  state  on  a  matter  within  its 
right  to  speak  upon  authoritatively,  and  if  that  public  policy  would 
be  subverted  by  allowing  the  employee  to  waive  in  advance  his  statu- 
tory protection,  the  contract  is  void  as  unmistakably  as  if  the  statute 
in  direct  words  forbade  the  making  of  it.  If  mines  and  factories  and 
stores  and  railroads  were  to  stand  vacant,  were  not  to  be  operated  by 
citizens  in  whose  lives  and  limbs  the  state  has  an  interest,  it  is  incon- 
ceivable that  the  legislature  would  have  spoken  as  it  has,  even  if  it  had 
authority  to  do  so.  To  promote  safety  to  life  and  limb,  as  indisput- 
ably as  to  advance  public  health,  education,  and  morals,  to  prohibit 
usury,  to  provide  for  exemption  and  stay  of  execution,  the  legislature 
has  the  right  to  act.  .  .  . 


808  ,  DAVIS   COAL.COMPANY   V.   POLLAND.  [CIIAP.   XXV. 

The  purpose  of  this  statute  to  promote  the  safety  of  miners  being 
clear,  and  the  right  of  the  legislature  to  pass  it  being  unquestionable, 
the  court  should  not  declare  it  a  dead  letter.  If  the  employer  may 
avail  himself  of  the  defence  that  the  employee  agreed  in  advance  that 
the  statutes  should  be  disregarded,  the  court  would  be  measuring  the 
rights  of  the  persons  whom  the  lawmakers  intended  to  protect  by  the 
common-law  standard  of  the  reasonably  prudent  person,  and  not  by 
the  definite  standard  set  up  by  the  legislature.  This  would  be  prac- 
tically a  judicial  repeal  of  the  act.  It  is  no  hardship  to  the  employer 
to  disallow  him  a  defence  based  on  an  agreement  that  he  should  vio- 
late a  specific  statutory  duty.  His  sure  protection  lies  in  obedience 
to  the  law.  The  risks  that  still  inhere  in  the  business  after  this  is 
done  may  be  assumed  by  the  employee.  This  is  not  the  only  instance 
in  which  the  court  has  found  a  legislative  limitation  upon  the  right 
of  contract,  though  not  declared  in  terms.  A  contract  by  which  a 
debtor  undertakes  in  advance  of  judgment  not  to  take  a  stay  of  execu- 
tion or  to  claim  exemption  is  held  to  be  void,  although  the  statute 
does  not  expressly  forbid  the  making  of  such  a  contract.  Maloney  v. 
Newton,  85  Ind.  565.  The  lawmakers,  in  effect,  said  that  it  is  con- 
trary to  public  policy  to  allow  a  debtor  to  be  stripped  to  nakedness. 
The  state  in  many  ways  is  interested  in  the  debtor's  being  a  self- 
respecting  and  self-sustaining  citizen.  Therefore  the  debtor  is  not 
permitted  to  barter  away  the  state's  interest  in  him.  And  though 
after  judgment  he  is  not  compelled  to  take  a  stay  or  claim  his  exemp- 
tion, the  legislature  deemed  that  the  public  policy  would  be  amply 
enforced  by  his  privilege  to  do  so.  Other  examples  of  this  kind  might 
be  cited. 

The  conclusion  that  the  employer  may  not  put  upon  the  employee 
the  risks  that  arise  from  the  employer's  disregard  of  specific  statutory 
requirements  is  supported  by  the  following  authorities :  Narramore 
V.  Railroad  Co.,  96  Fed.  298;-  Durant  v.  Mining  Co.,  97  Mo.- 62; 
Greenlee  v.  Eailway  Co.,  122  N".  C.  977;  Baddeley  v.  Earl  Gran- 
ville, 19  Q.  B.  Div.  423;  Groves  v.  Wimborne,  [1898]  2  Q.  B.  402; 
Curran  v.  Eailway  Co.,  25  Ont.  App.  407. 

Second.  As  to  contributory  negligence :  The  complaint  alleged  that 
appellee  used  due  care  and  caution  to  avoid  injury.  This  is  enough, 
unless  the  specific  averments  show  this  general  allegation  to  be  untrue. 
It  sufficiently  appears  that  appellee  was  an  experienced  miner,  knew 
that  appellant  had  failed  to  provide  supports  as  required  by  statute, 
and  with  this  knowledge  continued  at  his  work  until  injured.  Appel- 
lant claims  that  this  constituted  such  negligence  as  to  preclude  a 
recovery.  Counsel  are  confusing  the  doctrines  of  contributory  negli- 
gence and  assumption  of  risk.  Assumption  of  risk  is  a  matter  of 
contract.  Contributory  negligence  is  a  question  of  conduct.  If 
appellee  were  to  be  defeated  by  the  rule  of  assumed  risk,  it  would  be 
btcause  he  agreed,  long  before  the  accident  happened,  that  he  would 


CHAP.  XXV.]      RISK  AS  AFFECTED  BY  STATUTE.  809 

assume  the  very  risk  from  which  his  injury  arose.  If  appellee  were 
to  be  defeated  by  the  rule  of  contributory  negligence,  it  would  be 
because  his  conduct,  at  the  time  of  the  accident  and  under  all  of 
the  attendant  circumstances,  fell  short  of  ordinary  care.  If  the 
one  circumstance  of  the  employee's  knowledge  of  the  employer's  fail- 
ure to  provide  the  statutory  safeguards  were  held,  as  a  matter  of  law, 
always  to  overcome  the  other  circumstances  characterizing  the  em- 
ployee's conduct  at  the  time  of  the  accident,  assumption  of  risk  would 
be  successfully  masquerading  in  the  guise  of  contributory  negligence. 
If  assumption  of  risk  is  the  issue,  knowledge  of  defective  conditions 
and  acquiescence  therein  are  fatal.  If  contributory  negligence  is  the 
issue,  knowledge  of  defective  conditions  and  acquiescence  therein  may 
be  fatal,  may  be  not ;  depending  upon  whether  a  person  of  ordinary 
prudence,  under  all  the  circumstances,  would  have  done  what  the 
injured  person  did.  If  the  risk  is  so  great  and  immediately  threaten- 
ing that  a  person  of  ordinary  prudence,  under  all  the  circumstances, 
would  not  take  it,  contributory  negligence  is  established.  If  the  risk 
is  not  so  great  and  immediately  threatening  but  that  a  person  of  ordi- 
nary prudence,  under  all  the  circumstances,  would  take  it,  contrib- 
utory negligence  is  not  established.  Appellee  alleges  that  there  was 
nothing  in  the  appearance  of  the  mine's  roof  to  indicate  immediate 
danger,  that  he  was  unable  to  find  any  defect  therein  by  the  usual 
tests,  and  that  he  could  and  would  have  propped  up  the  slate  securely 
if  appellant  had  not  been  derelict  in  supplying  timbers.  The  specific 
averments  do  not  overcome  the  general  allegation  of  freedom  from 
fault.  .  .  .  Judgment  affirmed. 


MAETIN"   V.   CHICAGO,   R.    I.   &   P.    R.    CO. 

lis  Iowa,  148.     1902. 

Action  for  damages.  Judgment  on  directed  verdict.  The  plain- 
tiff appeals. 

Ladd,  C.  J.  The  freight  train,  composed  of  thirteen  loaded  cars, 
twenty-six  empties,  and  the  caboose,  was  made  up  at  Rock  Island, 
from  which  place  it  departed  at  five  o'clock  in  the  morning.  WTien  it 
reached  Perry  Street,  in  Davenport,  a  second  engine  or  "  helper  "  was 
attached,  and  together  the  two  pulled  the  train  west  to  Farnam,  where 
the  absence  of  the  head  brakeman  was  first  discovered.  Evidently  he 
had  fallen  from  the  top  of  the  train  about  fifteen  or  twenty  feet  west 
of  Fillmore  Street,  in  Davenport.  .  .  .  Opinions  as  to  the  speed  of 
the  train  differ  widely,  but  the  jury  might  have  found  it  anywhere 
between  twelve  and  twenty-five  or  thirty  miles  per  hour.  All  agree 
that  it  exceeded  six  miles  an  hour,  the  limit  fixed  by  the  ordinance  of 
the  city  of  Davenport.    The  defendant,  then,  was  negligent  in  violat- 


810  MARTIN   V.   CHICAGO,   R.   I.    &   P.    E.    CO.  [CHAP.   XXV. 

ing  the  ordinance,  and  the  three  grounds  of  the  motion  on  which  the 
jury  were  directed  to  return  a  verdict  raise  the  questions:  (1)  Did 
such  negligence  occasion  the  injury  to  deceased?  (2)  Did  deceased, 
by  any  fault  on  his  part,  contribute  to  his  injury?  And  (3)  had  he 
assumed  the  risk  of  the  high  rate  of  speed  at  which  the  train  was 
moving  ? 

1.  The  ordinance  of  the  tity  of  Davenport  prohibited  trains  from 
moving  within  the  corporate  limits  at  a  speed  exceeding  six  miles  an 
hour.  The  evidence  showed  that  it  was  customary  on  defendant's  line 
for  trains  such  as  that  in  question  to  leave  for  the  west  at  a  much 
higher  speed,  in  order  to  make  the  grade ;  and,  as  deceased  had  been 
engaged  in  work  as  brakeman  something  like  seven  months  in  all,  he 
must  have  known  of  this  practice.  Of  course,  the  mere  fact  that  de- 
fendant habitually  violated  the  ordinance  does  not  relieve  it  from  the 
imputation  of  negligence.  Hamilton  v.  Eailroad  Co.,  36  Iowa,  31; 
Beard  v.  Eailway  Co.,  79  Iowa,  522;  Weber  v.  City  of  Creston,  75 
Iowa,  16 ;  Conners  v.  Eailway  Co.,  74  Iowa,  383.  'Not  can  it  be  said 
that  ordinances  of  this  character  have  for  their  sole  object  the  protec- 
tion of  those  having  occasion  to  go  on  or  across  the  tracks.  They  are 
not  thus  limited  in  their  terms.  Their  benefit  may  be  claimed  by  any 
person  coming  within  their  protection.  Eailroad  Co.  v.  Gilbert,  157 
111.  354;  Eailway  Co.  v.  Eggman,  170  111.  538;  Eailroad  Co.  v. 
Moore,  152  Ind.  345;  Bluedorn  v.  Eailway  Co.,  108  Mo.  439.  Never- 
theless, the  evident  purpose  in  their  enactment  is  to  guard  against  in- 
jury to  those  using  the  streets  rather  than  the  employees  of  the  rail- 
road engaged  in  operating  the  trains. 

In  undertaking  the  work  of  brakeman  with  knowledge  that  the 
ordinance  was  ignored  by  the  railroad  company,  or  continuing  at  work 
without  complaint  after  ascertaining  the  fact,  did  deceased  assume 
the  risk  of  the  danger  incident  to  its  violation  ?  The  authorities  are 
in  sharp  conflict  on  this  proposition.  Those  holding  that  such  a  risk 
is  never  assumed  go  on  the  theory  that,  as  the  assumption  of  risk  is 
based  on  an  implied  contract,  it  would  be  opposed  to  sound  public 
policy  to  permit  one  to  agree  in  advance  to  a  violation  of  a  statute 
or  city  ordinance.  (After  quoting  from  a  portion  of  the  opinion  of 
Taft,  J.,  in  Narramore  v.  Eailroad  Company,  96  Fed.  298,  ante, 
p.  789,  the  court  continues:)  This  is  perhaps  the  clearest  expression 
of  the  reasons  persuading  some  courts  to  hold  that  in  such  cases  the 
maxim,  volenti  non  fit  injuria,  will  not  apply.  The  point  appears  to 
have  been  touched  upon  in  several  English  cases.  See  Thomas  v. 
Quartermaine,  18  Q.  B.  Div.  685;  Baddeley  v.  Granville,  19  Q.  B. 
Div.  423.  In  the  latter,  a  statute  required  a  banksman  to  be  present 
at  the  mouth  of  a  pit  when  miners  were  going  up  and  down.  During 
the  night  it  was  the  defendant's  practice  to  dispense  with  him,  and  of 
this  the  plaintiff  was  aware.  The  injury  was  in  consequence  of  this 
omission.    The  court  held  that  plaintiff  could  recover;    Wills,  J., 


CHAP.   XXV.]  RISK   AS   AFFECTED  BY   STATUTE.  811 

saying :  "  There  ought  to  be  no  encouragement  given  to  the  making 
of  an  agreement  between  A.  and  B.  that  B.  shall  be  at  liberty  to  break 
the  law  which  has  been  passed  for  the  protection  of  A.  Such  an 
agreement  might  be  illegal.  .  .  .  But  it  seems  to  me  that  if  the  sup- 
posed agreement  between  the  deceased  and  defendant,  in  consequence 
of  which  the  principle  of  volenti  non  fit  injuria  is  sought  to  be  ap- 
plied, comes  to  this:  that  the  master  employs  the  servant  on  the 
terms  that  the  latter  shall  waive  the  breach  by  the  master  of  an  obli- 
gation imposed  on  him  by  statute,  and  shall  connive  at  his  disregard 
of  the  statutory  obligation  imposed  on  him  for  the  benefit  of  others, 
as  well  as  of  himself,  —  such  an  agreement  would  be  in  violation  of 
public  policy,  and  ought  not  to  be  listened  to."  A  careful  reading  of 
the  opinions  in  Durant  i'.  Mining  Co.,  97  Mo.  62 ;  Grand  v.  Railroad 
Co.,  83  Mich.  564;  Coal  Co.  v.  Taylor,  81  111.  590,  and  Boyd  v.  Coal 
Co.  (Ind.  App.),  50  N.  E.  368,  cited  in  the  Xarramore  Case,  dis- 
closes that,  although  the  question  might  have  been  raised,  it  was  not 
in  any  of  them.  We  think  the  learned  judge,  in  writing  that  opinion, 
assumed  too  much  in  treating  the  assumption  of  risk  as  purely  a 
matter  of  contract.  True,  the  books  speak  of  it  as  resting  on  an  im- 
plied agreement  between  the  employer  and  employee.  It  is  more 
accurate  to  say  that  the  services  of  the  one  are  engaged  by  the  other, 
and  from  the  relationship  the  law  implies  certain  duties,  obligations, 
and  disabilities.  No  mention  is  made  of  these,  but  they  pertain  to 
the  relationship  of  the  parties  and  the  status  then  assumed. 

Says  Mr.  Dresser,  in  his  valuable  work  on  Employers'  Liability 
(section  82)  :  "  The  contract  of  hiring  depends  upon  the  same  prin- 
ciples as  other  contracts,  yet  it  has  one  peculiarity,  in  that  it  creates 
a  status  or  relationship  between  the  parties,  to  which  the  policy  of 
the  law  has  affixed  certain  rights,  duties,  and  disabilities  to  be  observed 
by  each,  irrespective  of  any  understanding  or  supposed  agreement 
between  them.  These  duties  and  disabilities  arise  when  the  relation 
is  created,  and  continue  until  it  ends,  and  for  the  most  part  are  de- 
termined by  the  condition  of  affairs  when  the  contract  of  hiring  is 
made.  It  is  usual  and  convenient  to  treat  them  as  terms  of  an  im- 
plied contract,  but  it  is  a  contract  implied  from  the  relationship,  and 
not  from  the  agreement  of  the  parties,  and  has  none  of  the  incidents 
of  a  technical  contract."  The  author  then  points  out  that  no  consid- 
eration is  essential,  as  a  mere  volunteer  may  be  in  the  same  position 
as  though  hired,  and  an  infant  whose  agreements  are  voidable  may 
assume  disabilities  as  an  adult.  See  Barstow  v.  Railroad  Co.,  143 
Mass.  535.  If  based  on  contract  alone,  then  an  action  for  injury  by 
the  servant,  resulting  from  a  breach  of  a  duty  assumed  by  the  master, 
should  be  ex  contractu.  As  said  in  Jag.  Torts,  23 :  "  Such  rights  and 
duties  are  not  properly  contractual,  nor  is  their  breach  a  contract 
wrong.'*  See  Ames  v.  Railroad  Co.,  117  Mass.  541.  The  breach  is 
of  a  duty  which  the  law  implies  from  their  relationship,  and  is,  like 


812  MAETIN   V.   CHICAGO,   B.   I.   A  P.    B.    CO.  [CHAP.   XXV. 

any  other  omission  of  duty  which  the  law  exacts,  negligence.  The 
master's  liability  may  be  tested  either  by  considering  the  employee's 
conduct,  and  answering  whether,  in  view  of  his  undertaking,  he  took 
his  chance  on  the  particular  act  of  which  complaint  is  made,  or  by 
ascertaining  whether  the  employer  owed  the  employee  any  duty  in 
relation  thereto.  While  the  first  may  be  the  more  convenient,  the  last 
is  the  more  logical,  as  it  would  seem  inquiry  should  be  directed  to 
ascertaining  the  existence  of  an  obligation  before  investigating  its 
possible  breach.  The  employee  undertakes  the  performance  of  duties 
and  services  for  compensation,  and  in  doing  so  takes  upon  himself 
the  natural  and  ordinary  risks  and  perils  incident  to  the  performance 
of  such  services,  and,  in  legal  assumption,  the  compensation  is  ad- 
justed accordingly.  Farwell  v.  Corporation,  4  Mete.  (Mass.)  49,  55. 
That  is,  he  engages  to  perform  work  under  certain  conditions.  If 
these  are  not  changed,  no  duty  on  the  part  of  the  master  has  been 
omitted.  For  instance,  if  he  undertakes  to  operate  defective  machin- 
ery, the  master  owes  him  no  duty  to  repair.  In  such  a  case  there  is 
no  waiver  of  liability,  because  none  has  arisen.  But  if  he  knew  noth- 
ing of  the  defects,  and  they  were  not  obvious,  the  law  implies  the 
obligation  of  the  master  to  put  it  in  safe  condition  for  use.  As  said 
in  O'Maley  v.  Gaslight  Co.,  158  Mass.  135  :  "  The  doctrine  of  assump- 
tion of  risk  of  his  emplojTnent  by  an  employee  has  usually  been  con- 
sidered from  the  point  of  view  of  a  contract,  express  or  implied ;  but, 
as  applied  to  actions  of  tort  for  negligence  against  an  employer,  it 
leads  up  to  the  broader  principle  expressed  by  the  maxim,  volenti  fit 
non  injuria.  One  who,  knowing  and  appreciating  a  danger,  volun- 
tarily assumes  the  risk  of  it,  has  no  just  cause  of  complaint  against 
another  who  is  primarily  responsible  for  the  existence  of  the  danger. 
As  between  the  two,  his  voluntary  assumption  of  the  risk  absolves  the 
other  from  any  particular  duty  to  him  in  that  respect,  and  leaves  each 
to  take  such  chances  as  exist  in  the  situation,  without  right  to  claim 
anything  from  the  other.  In  such  a  case  there  is  no  actionable  negli- 
gence on  the  part  of  him  who  is  primarily  responsible  for  the  danger. 
If  there  is  a  failure  to  do  his  duty  according  to  a  high  standard  of 
ethics,  there  is,  as  between  the  parties,  no  neglect  of  legal  duty." 

Nor  can  we  approve  of  the  distinction  attempted  to  be  drawn  be- 
tween employment  under  conditions  condemned  as  dangerous  at  the 
common  law,  and  those  prohibited  by  a  city  ordinance.  In  the  absence 
of  an  assumption  of  the  risk,  an  omission  of  a  duty  implied  by  law  is 
precisely  as  effective  in  fixing  liability  as  though  enjoined  by  statute. 
The  obligation  of  the  employer  to  the  servant  is  no  greater  in  the 
one  case  than  in  the  other,  and  we  can  discover  no  sound  reason  for 
the  discrimination  which  declares  the  danger  in  the  one  case  may  be 
assumed,  and  in  the  other  may  not.  That  advanced  in  two  cited  cases, 
to  the  effect  that  permitting  the  employee  to  waive  the  protection  of 
a  statute  would  be  in  contravention  of  sound  public  policy,  we  regard 


CHAP.   XXV.]  RISK   AS   AFFECTED   BY   STATUTE.  813 

as  untenable.  The  law  implied  is  quite  as  much  for  his  benefit,  as 
that  enacted  by  the  city  council.  If  he  knows  and  appreciates  the 
danger,  and  understands  his  rights  under  the  statute,  there  is  no 
more  reason  for  putting  him  under  guardianship,  and  prohibiting 
him  from  waiving  lapses  in  duty  of  obedience  to  a  rule  established 
by  an  ordinance  or  statute,  than  to  one  which  the  principles  of  justice 
and  public  policy  raise,  independent  of  legislation,  for  his  protection. 
Beyond  the  right  of  action  accruing  for  the  violation  of  the  master's 
obligation,  regardless  of  its  source,  is  the  punishment  the  state  inflicts 
for  the  violation  of  the  penal  ordinance.  The  remedies  are  distinct, 
and  the  failure  of  the  servant  to  demand  his  private  remedy  does  not 
interfere  with  the  exaction  of  a  penalty  by  the  state;  nor,  on  the 
other  hand,  will  the  omission  of  the  state  to  prosecute  furnish  the 
slightest  obstacle  to  the  maintenance  of  an  action  by  the  injured 
party.  As  said  in  the  work  from  which  we  have  already  quoted :  "  It 
is  diflBcult  to  see  why,  if  the  servant  is  given  an  action,  he  cannot 
barter  it  away  before  the  cause  of  action  accrues,  as  well  as  fail  to 
bring  it  when  he  suffers  injury.  In  neither  case  is  the  master's  lia- 
bility to  the  state  affected,  and  the  state  ought  not  to  call  in  the  aid 
of  an  individual  to  enforce  a  policy  it  is  competent  itself  to  protect. 
For  many  reasons,  the  servant  may  prefer  to  forego  the  protection; 
and  as  this  does  not  change  the  master's  obligation  under  the  statute, 
or  affect  the  welfare  of  the  state,  it  should  be  permitted.  The  means 
of  protection,  through  information  to  the  proper  authorities,  are  at 
hand,  if  the  servant  or  another  chooses  to  avail  himself  of  them ;  and, 
if  he  is  content  to  work  without  safeguards  which  he  has  a  right  to 
expect,  the  loss  should  be  his.  ...  If  the  decisions  quoted  are  to  be 
followed,  the  odd  state  of  affairs  will  exist,  —  of  a  man  who  is  merely 
careless  being  barred,  but  one  deliberately  undertaking  a  dangerous 
work  recovering." 

Some  stress  is  laid  on  the  impolicy  of  allowing  persons  to  waive 
obedience  of  an  ordinance  or  statute.  It  would  seem  quite  as  inimical 
to  the  public  good  to  permit  a  workman  to  take  advantage  of  the 
master's  failure  to  obey  the  law  to  which  he  has  consented,  as  to  per- 
mit the  master  to  avoid  liability  because  the  servant  connived  with 
him  in  such  disobedience,  by  agreeing  to  work  with  the  conditions  as 
they  existed,  and  according  to  the  method  mutually  adopted.  In 
other  words,  it  is  quite  as  obnoxious  to  public  policy,  independent  of 
the  penalty  imposed,  for  the  employee  to  aid  and  encourage  the  em- 
ployer in  his  disregard  of  an  ordinance,  as  for  the  employer  to  violate 
it.  Our  study  of  the  subject  has  led  to  the  conclusion  that,  in  the 
matter  of  assumption  of  risks,  it  is  immaterial  whether  they  arise 
from  the  violation  of  a  common-law  duty,  or  an  obligation  imposed 
by  statute.  As  directly  in  point,  see  Knisley  v.  Pratt,  148  N.  Y.  372 ; 
Carpet  Co.  v.  O'Keefe,  79  Fed.  900;  Keenan  v.  Illuminating  Co., 
159  Mass.  379;  Dresser,  Employers'  Liab.  §  116.    Also  see  13  Law 


814  MARTIN  V.   CHICAGO,  E.   I.   &   P.   B.   CO.  [CHAP.  XXV. 

Mag.  &  Eev.  19;  3  ElUott,  K.  E.  §  1345;  Electric  Co.  v.  Allen  (Ala.), 
13  South.  8,  20  L.  B.  A.  457;  Ford  v.  Eailway  Co.,  106  Iowa,  86. 

In  the  first  of  the  above  cases,  the  court,  speaking  through  Bart- 
lett,  J.,  in  referring  to  the  claim  that  public  policy  required  the  rigid 
enforcement  of  a  particular  statute,  and  that  this  would  be  contra- 
vened by  permitting  an  employee  by  contract  to  waive  its  protection, 
said :  "  We  think  this  proposition  essentially  unsound,  and  proceeds 
upon  theories  that  cannot  be  maintained.  It  is  difficult  to  perceive 
any  difference  in  the  quality  and  character  of  a  cause  of  action, 
whether  it  has  its  origin  in  the  ancient  principles  of  the  common  law, 
in  the  formulated  rules  of  modem  decisions,  or  in  the  declared  will 
of  the  legislature.  Public  policy  in  each  case  requires  its  rigid  en- 
forcement, and  it  was  never  urged  in  the  common-law  action  for 
negligence  that  the  rule  requiring  the  employee  to  assume  the  obvious 
risks  of  the  business  was  in  contravention  of  that  policy.  .  .  .  The 
rule  as  to  risks  of  service  or  ordinary  risks  is  entirely  distinct  from 
the  rule  of  obvious  risks,  and,  if  the  statute  has  added  to  the  duties 
which  the  law  enjoins  upon  the  employer  before  the  servant  can  be 
subjected  to  the  rule  of  ordinary  risks,  then  the  default  of  the  em- 
ployer in  the  discharge  of  this  statutory  duty,  resulting  in  the  injury 
to  the  employee,  would  enable  the  latter  to  sue.  Such  a  construction 
of  the  statute  would  not  in  any  way  limit  the  doctrine  of  obvious 
risks.  .  .  .  "We  are  of  opinion  that  there  is  no  reason,  in  principle 
or  authority,  why  an  employee  should  not  be  allowed  to  assume  the 
obvious  risks  of  his  business,  as  well  under  the  factory  act  as  other- 
wise. There  is  no  rule  of  public  policy  which  prevents  an  employee 
from  deciding  whether,  in  view  of  increased  wages,  the  difficulties  of 
obtaining  employment,  or  other  sufficient  reasons,  it  may  not  be  wise 
and  prudent  to  accept  employment  subject  to  the  rule  of  obvious  risks. 
The  statute,  indeed,  contemplates  the  protection  of  a  certain  class 
of  laborers,  but  it  does  not  deprive  them  of  their  free  agency  and  the 
right  to  manage  their  own  affairs."    148  N.  Y.  372,  377,  378,  379. 

The  appellant  urges  that  as,  under  our  statute,  contracts  exempting 
the  company  from  liability  are  void,  there  can  be  no  assumption  of 
such  a  risk.  The  answer  to  this  is,  as  already  remarked,  that  in  such 
a  case  no  liability  arises,  and  hence  there  is  none  from  which  the  con- 
tract exempts.  Possibly  ordinances  or  statutes  might  be  so  framed 
as  to  prevent  any  assumption  of  risk,  but  certainly  this  is  not  true 
of  an  ordinance  general  in  its  terms,  limiting  the  speed  of  trains  in 
a  particular  locality.  And  it  can  make  no  difference  whether  the 
statute  relates  to  the  condition  of  the  place  where  the  work  is  to  be 
done,  or  the  method  to  be  pursued  in  performing  it.  If  the  employee, 
with  full  knowledge  of  either,  undertakes  to  accomplish  the  task 
assigned  at  the  place  or  in  the  method  proposed,  he  ought  not  to  be 
permitted  to  complain,  when  conditions  and  methods  were  precisely 
as  he  knew  they  would  be,  and  to  which  he  has  assented. 


CHAP.  XXV.]      DISTINCTION  BETWEEN  RISK  AND  NEGLIGENCE.       815 

2.  The  finding  that  deceased  assumed  the  risk  of  injury  from  the 
excessive  rate  of  speed  within  the  corporate  limits  of  the  city  of 
Davenport  leads  inevitably  to  an  approval  of  the  court's  ruling  in 
directing  a  verdict  for  defendant.  .  .  .  The  jury  could  have  found 
that  the  train  was  moving  at  from  twelve  to  thirty  miles  an  hour,  but 
it  is  utterly  impossible  to  say  from  the  evidence  that  going  faster  than 
twelve  miles  an  hour,  with  which  deceased  was  familiar,  caused  him  to 
fall,  and  that  this  would  not  have  happened  if  moving  at  a  less  speed. 
If  the  cars  swayed  in  passing  over  the  blocks  and  switches,  he  knew 
that  fact  better  than  any  one  else,  and  ought  not  to  have  attempted 
to  go  to  the  engine  until  these  were  passed.  Recovery  must  be  had, 
if  at  all,  because  of  negligence  in  the  rate  of  speed.  Compliance 
with  the  ordinance  having  been  waived  by  deceased,  in  not  only  con- 
senting, but  assisting  in  operating  defendant's  trains  at  a  rate  of  from 
eight  to  twelve  miles  an  hour,  there  is  no  liability,  unless  it  can  be  said 
that  the  speed  at  which  this  train  ran,  above  that  mentioned,  was  not 
only  negligence,  but  that  it  was  the  operating  cause  of  the  injury. 
As  the  speed  above  that  mentioned,  the  risks  of  which  he  had  assumed, 
cannot  be  said  to  have  occasioned  his  death,  we  need  not  inquire 
whether  defendant  was  negligent,  independent  of  the  violation  of 
the  city  ordinance. 

The  ruling  of  the  District  Court  is  approved  and  its  judgment 
affirmed. 

Weaver,  J.,  concurs  in  the  result. 


4.    Distinction  between  Assumption  of  BisJc  and  Contributory 

Negligence} 

NAERAMORE   v.   RAILROAD    COMPANY. 

96  Fed.  298.     1898. 
[Reported  herein  at  p.  789.] 


KILPATRICK   V.    GRAND   TRUNK   RY.    CO. 

74   Vt.   288.     1902. 
[Reported  herein  at  p.  797.] 


DAVIS   COAL   COMPANY  v.   POLLAND. 

158  Ind.  607.     1901. 
[Reported  herein  at  p.  804.] 

*  In  addftton  to  the  cases  referred  to  below,  see  Dowd  v.  N.  T.,  O.  &  W.  Ry.  Co, 
170  N.  Y.  459.  and  Dempsey  v.  Sawyer,  95  Me.  295. 


816  OSBORNE  V,  MOEGAN.  [CHAP.  XXVI. 

'^  PART  IV. 

LIABILITY   OF   SEEVANT   FOE   TOETS. 

CHAPTER   XXVI. 
Servant's  Ijiability  foe  Torts.* 

OSBOENE   V.   MOEGAN. 
130  Mass.  102.     1881. 

Gray,  C.  J.  The  declaration  is  in  tort,  and  the  material  allega- 
tions of  fact,  which  are  admitted  by  the  demurrer,  are  that  while  the 
plaintijff  was  at  work  as  a  carpenter  in  the  establishment  of  a  manu- 
faetuTing  corporation,  putting  up  by  direction  of  the  corporation 
certain  partitions  in  a  room  in  which  the  corporation  was  conducting 
the  business  of  making  wire,  the  defendants,  one  the  superintendent 
and  the  others  agents  and  servants  of  the  corporation,  being  employed 
in  that  business,  negligently  and  without  regard  to  the  safety  of 
persons  rightfully  in  the  room,  placed  a  tackle-block  and  chains  upon 
an  iron  rail  suspended  from  the  ceiling  of  the  room,  and  suffered  them 
to  remain  there  in  such  a  manner,  and  so  unprotected  from  falling, 
that  by  reason  thereof  they  fell  and  injured  the  plaintiff.  Upon  these 
facts  the  plaintiff  was  a  fellow  servant  of  the  defendants.  Farwell  v. 
Boston  &  Worcester  Eailroad,  4  Met.  49 ;  Albro  v.  Agawam  Canal, 
6  Cush.  75 ;  Gilman  v.  Eastern  Eailroad,  10  Allen,  333,  and  13  Allen, 
433 ;  Holden  v.  Fitchburg  Eailroad,  129  Mass.  268 ;  Morgan  v.  Vale 
of  Neath  Eailway,  5  B.  &  S.  570,  736,  and  L.  E.  1  Q.  B.  149. 

The  ruling  sustaining  the  demurrer  was  based  upon  the  judgment 
of  this  court,  delivered  by  Mr.  Justice  Meerick,  in  Albro  v.  Jaquith, 
4  Gray,  99,  in  which  it  was  held  that  a  person  employed  in  the  mill 
of  a  manufacturing  corporation,  who  sustained  injuries  from  the 
escape  of  inflammable  gas,  occasioned  by  the  negligence  and  unskil- 
fulness  of  the  superintendent  of  the  mill  in  the  management  of  the 
apparatus  and  fixtures  used  for  the  purpose  of  generating,  containing, 
conducting,  and  burning  the  gas  for  the  lighting  of  the  mill,  could 
not  maintain  an  action  against  the  superintendent.  But,  upon  con- 
sideration, we  are  all  of  opinion  that  that  judgment  is  supported 
by  no  satisfactory  reasons,  and  must  be  overruled. 

The  principal  reason  assigned  was,  that  no  misfeasance  or  positive 
act  of  wrong  was  charged,  and  that  for  non-feasance,  which  was 

*  See  cases  In  Chapter  XVI. 


CHAP.   XXVI.]  servant's   LIABILITY   FOR  TORTS.  817 

merely  negligence  in  the  performance  of  a  duty  arising  from  some 
express  or  implied  contract  with  his  principal  or  employer,  an  agent 
or  servant  was  responsible  to  him  only,  and  not  to  any  third  person. 
It  is  often  said  in  the  books  that  an  agent  is  responsible  to  third 
persons  for  misfeasance  only,  and  not  for  non-feasance.  And  it  is 
doubtless  true  that  if  an  agent  never  does  anything  toward  carrying 
out  his  contract  with  his  principal,  but  wholly  omits  and  neglects 
to  do  so,  the  principal  is  the  only  person  who  can  maintain  an  action 
against  him  for  the  non-feasance.  But  if  the  agent  once  actually 
undertakes  and  enters  upon  the  execution  of  a  particular  work,  it 
is  his  duty  to  use  reasonable  care  in  the  manner  of  executing  it, 
so  as  not  to  cause  any  injury  to  third  persons  which  may  be  the 
natural  consequence  of  his  acts;  and  he  cannot,  by  abandoning  its 
execution  midway  and  leaving  things  in  a  dangerous  condition, 
exempt  himself  from  liability  to  any  person  who  suffers  injury  by 
reason  of  his  having  so  left  them  without  proper  safeguards.  This 
is  not  non-feasance,  or  doing  nothing;  but  it  is  misfeasance,  doing 
improperly.  Ulpian,  in  Dig.  9,  2,  27,  9;  Parsons  v.  Winchell,  5 
Cush.  592 ;  Bell  v.  Josselyn,  3  Gray,  309 ;  Nowell  v.  Wright,  3  Allen, 
166 ;  Homer  v.  Lawrence,  8  Vroom,  46.  Negligence  and  unskilful- 
ness  in  the  management  of  inflammable  gas,  by  reason  of  which  it 
escapes  and  causes  injury,  can  no  more  be  considered  as  mere  non- 
feasance, within  the  meaning  of  the  rule  relied  on,  than  negligence 
in  the  control  of  fire,  as  in  the  case  in  the  Pandects;  or  of  water,  as 
in  Bell  v.  Josselyn;  or  of  a  drawbridge,  as  in  Nowell  v.  Wright;  or 
of  domestic  animals,  as  in  Parsons  v.  Winchell,  and  in  the  case  in 
New  Jersey. 

In  the  case  at  bar,  the  negligent  hanging  and  keeping  by  the 
defendants  of  the  block  and  chains  in  such  a  place  and  manner  as 
to  be  in  danger  of  falling  upon  persons  underneath,  was  a  misfeas- 
ance or  improper  dealing  with  instruments  in  the  defendants'  actual 
use  or  control,  for  which  they  are  responsible  to  any  person  lawfully 
in  the  room  and  injured  by  the  fall,  and  who  is  not  prevented  by  his 
relation  to  the  defendants  from  maintaining  the  action.  Both  the 
ground  of  action  and  the  measure  of  damages  of  the  plaintiff  are 
different  from  those  of  the  master.  The  master's  right  of  action 
against  the  defendants  would  be  founded  upon  his  contract  with  them, 
and  his  damages  would  be  from  the  injury  to  his  property,  and  could 
not  include  the  injury  to  the  person  of  this  plaintiff,  because  the 
master  could  not  be  made  liable  to  him  for  such  an  injury  resulting 
from  the  fault  of  fellow  servants,  unless  the  master  had  himself  been 
guilty  of  negligence  in  selecting  or  employing  them.  The  plaintiff's 
action  is  not  founded  on  any  contract,  but  is  an  action  of  tort  for 
injuries  which,  according  to  the  common  experience  of  mankind, 
were  a  natural  consequence  of  the  defendants'  negligence.  The  fact 
that  a  wrongful  act  is  a  breach  of  a  contract  between  the  wrongdoer 

62 


318  OSBORNE  V.   MORGAN.  [CHAP.   XXVI. 

and  one  person  does  not  exempt  him  from  the  responsibility  for  it  as 
a  tort  to  a  third  person  injured  thereby.  Hawkesworth  v.  Thompson, 
98  Mass.  77 ;  Norton  v.  Sewall,  106  Mass.  143 ;  May  v.  Western  Union 
Telegraph,  112  Mass.  90;  Grinnell  v.  Western  Union  Telegraph, 
113  Mass.  299,  305;  Ames  v.  Union  Eailway,  117  Mass.  541;  Mulchey 
V.  Methodist  Eeligious  Society,  125  Mass.  487;  Rapson  v.  Cubitt, 
9  M.  &  W.  710;  George  v.  Skivington,  L.  R.  5  Ex.  1;  Parry  v. 
Smith,  4  C.  P.  D.  325 ;  Foulkes  v.  Metropolitan  Railway,  4  C.  P.  D. 
267,  and  5  C.  P.  D.  157.  This  case  does  not  require  us  to  consider 
whether  a  contractor  or  a  servant,  who  has  completed  a  vehicle, 
engine,  or  fixture,  and  has  delivered  it  to  his  employer,  can  be  held 
responsible  for  an  injury  afterwards  suffered  by  a  third  person 
from  a  defect  in  its  original  construction.  See  Winterbottom  v. 
Wright,  10  M.  &  W.  109;  CoUis  v.  Selden,  L.  R.  3  C.  P.  495; 
Albany  v.  Cunliff,  2  Comst.  165;  Thomas  v.  Winchester,  2  Selden, 
397,  408;  Coughtry  v.  Globe  Woollen  Co.,  56  N.  Y.  124,  127. 

It  was  further  suggested  in  Albro  v.  Jaquith  that  many  of  the 
considerations  of  justice  and  policy,  which  led  to  the  adoption  of 
the  rule  that  a  master  is  not  responsible  to  one  of  his  servants  for 
the  injurious  consequences  of  negligence  of  the  others,  were  equally 
applicable  to  actions  brought  for  like  causes  by  one  servant  against 
another.  The  only  such  considerations  specified  were  that  the 
servant,  in  either  case,  is  presumed  to  understand  and  appreciate  the 
ordinary  risk  and  peril  incident  to  the  service,  and  to  predicate  his 
compensation  in  some  measure  upon  the  extent  of  the  hazard  he 
assumes ;  and  that  "  the  knowledge,  that  no  legal  redress  is  afforded 
for  damages  occasioned  by  the  inattention  or  unfaithfulness  of  other 
laborers  engaged  in  the  same  common  work,  will  naturally  induce 
each  one  to  be  not  only  a  strict  observer  of  the  conduct  of  others,  but 
to  be  more  prudent  and  careful  himself,  and  thus  by  increased 
vigilance  to  promote  the  welfare  and  safety  of  all."  The  cases 
cited  in  support  of  these  suggestions  were  Farwell  v.  Boston  &  Wor- 
cester Railroad,  4  Met.  49,  and  King  v.  Boston  &  Worcester  Rail- 
road, 9  Gush.  112,  each  of  which  was  an  action  by  a  servant  against 
the  master;  and  it  is  hard  to  see  the  force  of  the  suggestions  as 
applied  to  an  action  by  one  servant  against  another  servant. 

Even  the  master  is  not  exempt  from  liability  to  his  servants  for 
his  own  negligence;  and  the  servants  make  no  contract  with,  and 
receive  no  compensation  from,  each  other.  It  may  well  be  doubted 
whether  a  knowledge  on  the  part  of  the  servants  that  they  were  in 
no  event  to  be  responsible  in  damages  to  one  another  would  tend  to 
make  each  more  careful  and  prudent  himself.  And  the  mention  by 
Chief  Justice  Shaw,  in  Farwell  v.  Boston  &  Worcester  Railroad,  of 
the  opportunity  of  servants,  when  employed  together,  to  observe  the 
conduct  of  each  other,  and  to  give  notice  to  their  common  employer 
of  any  misconduct,  incapacity,  or  neglect  of  duty,  was  accompanied 


CHAP.  XXVI.]  servant's  LIABILITY   FOB  T0BT8.  819 

by  a  cautious  withholding  of  all  opinion  upon  the  question  whether 
the  plaintiff  had  a  remedy  against  tiie  person  actually  in  default;  and 
was  followed  by  the  statement  (upon  which  the  decision  of  that  case 
turned,  and  which  has  been  aflBrmed  in  subsequent  cases,  some  of 
which  have  been  cited  at  the  beginning  of  this  opinion)  that  the  rule 
exempting  the  master  from  liability  to  one  servant  for  the  fault  of 
a  fellow  servant  did  not  depend  upon  the  existence  of  any  such  oppor- 
tunity, but  extended  to  cases  in  which  the  two  servants  were  employed 
in  different  departments  of  duty,  and  at  a  distance  from  each  other. 
4  Met.  59-61. 

So  far  as  we  are  informed  there  is  nothing  in  any  other  reported 
case,  in  England  or  in  this  country,  which  countenances  the  de- 
fendants' position,  except  in  Southcote  v.  Stanley,  1  H.  &  N.  247; 
s.  c,  25  L.  J.  (N.  S.)  Ex.  339;  decided  in  the  Court  of  Exchequer 
in  1856,  in  which  the  action  was  against  the  master,  and  Chief  Baron 
Pollock  and  Barons  Alderson  and  Bramwell  severally  delivered 
oral  opinions  at  the  close  of  the  argument.  According  to  one  report, 
Chief  Baron  Pollock  uttered  this  dictum :  "  Neither  can  one  ser- 
vant maintain  an  action  against  another  for  negligence  while  engaged 
in  their  common  employment."  1  H.  &  N.  250.  But  the  other 
report  contains  no  such  dictum,  and  represents  Baron  Alderson  as 
remarking  that  he  was  "  not  prepared  to  say  that  the  person  actually 
causing  the  negligence"  (evidently  meaning  "causing  the  injury," 
or  "guilty  of  the  negligence"),  "whether  the  master  or  servant, 
would  not  be  liable."  25  L.  J.  (N.  S.)  Ex.  340.  The  responsibility 
of  one  servant  for  an  injury  caused  by  his  own  negligence  to  a  fellow 
servant  was  admitted  in  two  considered  judgments  of  the  same  court, 
the  one  delivered  by  Baron  Alderson  four  months  before  the  decision 
in  Southcote  v.  Stanley,  and  the  other  by  Baron  Bramwell  eight 
months  afterwards.  Wiggett  v.  Fox,  11  Exch.  832,  839.  Degg  v. 
Midland  Railway,  1  H.  &  N.  773,  781.  It  has  since  been  clearly 
asserted  by  Barons  Pollock  and  Huddleston.  Swainson  v.  North- 
eastern Railway,  3  Ex.  D.  341,  343.  And  it  has  been  affirmed  by 
direct  adjudication  in  Scotland,  in  Indiana,  and  in  Minnesota. 
Wright  V.  Roxburgh,  2  Ct.  of  Sess.  Cas.  (3d  series),  748;  Hinds  v. 
Harbou,  58  Ind.  121;  Hinds  v.  Overacker,  66  Ind.  547;  Griffiths 
V.  Wolfram,  22  Minn.  185.  Exceptions  sustained. 


GBEENBERG  v.   WHITCOMB   LUMBER  CO.   et  al. 

90  Wis.  225.     1895. 

Action  by  August  Greenberg  against  the  Whitcomb  Lumber  Com- 
pany and  Parian  Semple  for  personal  injuries.  Plaintiff  appeals 
from  an  order  sustaining  the  demurrer  of  Parian  Semple  to  his  com- 


820         GEEENBERQ   V.   WHITCOMB   LUMBER   CO.    ET   AL.     [CHAP.   XXVT. 

plaint.     Defendant  Whitcomb  Lumber  Company  appeals  from  an 
order  overruling  its  demurrer  to  plaintiff's  complaint. 

Newman,  J.  The  complaint  states,  in  substance,  that  the  de- 
fendant the  Whitcomb  Lumber  Company  is  a  corporation;  that  the 
defendant  Parian  Semple  was  one  of  its  officers  and  its  general 
managing  agent;  that  its  business  was  the  manufacturing  of  timber 
into  firewood;  that  it  operated,  in  this  work,  a  machine  which  was 
defective  and  dangerous;  that  it  knew  the  machine  to  be  defective 
and  dangerous ;  that  the  defect  which  rendered  it  dangerous  was  that 
the  saw  was  defectively  and  insecurely  fastened  to  its  shaft;  that  the 
plaintiff  was  employed  to  work  upon  or  with  this  machine;  that  he 
was  inexperienced  in  such  work  and  as  to  such  machine,  and  did  not 
know  of  the  defect  of  the  machine ;  that  the  defendants  knew  that  he 
was  so  inexperienced  and  ignorant ;  that  plaintiff  received  no  instruc- 
tions ;  that  he  was  injured,  without  his  fault,  by  reason  of  the  defect 
of  the  machine.  Fairly  construed,  this  is  the  substance  of  the  com- 
plaint. It  was  the  duty  of  the  defendant  the  Whitcomb  Lumber 
Company  to  furnish  the  plaintiff  a  safe  machine  to  work  with,  and, 
knowing  the  defect  of  the  machine  and  that  he  was  inexperienced, 
to  instruct  him  of  the  dangers  of  the  employment.  Not  to  do  this 
was  negligence.  The  complaint  states  a  cause  of  action  against  the 
defendant  the  Whitcomb  Lumber  Company. 

Whether  the  complaint  states  a  cause  of  action  against  the  de- 
fendant Parian  Semple  is  more  complex.  He  was  the  agent  or  ser- 
vant of  the  Whitcomb  Lumber  Company,  charged  with  the  oversight 
and  management  of  its  operations,  and  with  the  duty  of  providing 
a  safe  machine  for  the  work  in  which  the  plaintiff  was  engaged.  The 
principle  is  well  settled  that  the  agent  or  servant  is  responsible  to 
third  persons  only  for  injuries  which  are  occasioned  by  his  misfeas- 
ance, and  not  for  those  occasioned  by  his  mere  non-feasance.  Some 
confusion  has  arisen  in  the  cases,  from  a  failure  to  observe  clearly 
the  distinction  between  non-feasance  and  misfeasance.  These  terms 
are  very  accurately  defined,  and  their  application  to  questions  of  negli- 
gence pointed  out,  by  Judge  Metcalf  in  Bell  v.  Josselyn,  3  Gray 
(Mass.),  309.  "Non-feasance,"  says  the  learned  judge,  "is  the 
omission  of  an  act  which  a  person  ought  to  do ;  misfeasance  is  the 
improper  doing  of  an  act  which  a  person  might  lawfully  do;  mal- 
feasance is  the  doing  of  an  act  which  a  person  ought  not  to  do  at 
all."  The  application  of  these  definitions  to  the  case  at  bar  is  not 
difficult.  It  was  Semple's  duty  to  have  had  this  machine  safe.  His 
neglect  to  do  so  was  non-feasance.  But  that  alone  would  not  have 
harmed  the  plaintiff,  if  he  had  not  set  him  to  work  upon  it.  To  set 
him  to  work  upon  this  defective  and  dangerous  machine,  knowing 
it  to  be  dangerous,  was  doing  improperly  an  act  which  one  might 
lawfully  do  in  a  proper  manner.  It  was  misfeasance.  Both  elements, 
non-feasance  and  misfeasance,  entered  into  the  act,  or  fact,  which 


CHAP.  XXVI.]  servant's  LIABILITY  FOB  TORTS.  81&1- 

caused  the  plaintiff's  damages.  But  the  non-feasance  alone  could  not 
have  produced  it.  The  misfeasance  was  the  efficient  cause.  For  this 
the  defendant  Semple  is  responsible  to  the  plaintiff.  Mechem,  Ag. 
§  569  et  seq.j  14  Am.  &  Eng.  Enc.  Law,  873,  and  cases  cited  in  note 
4;  Wood,  Mast.  &  Serv.  (2d  ed.)  667;  Osbom  v.  Morgan,  130 
Mass.  102.  ... 

The  order  appealed  from  by  the  Whitcomb  Lumber  Company  is 
affirmed,  and  the  order  appealed  from  by  the  plaintiff  is  reversed. 


VAN   ANTWERP   v.   LINTON. 

89  Hun    (N.  Y.)    417.     1895. 

Appeal  by  the  plaintiff,  Edwin  Van  Antwerp,  from  a  judgment 
of  the  Supreme  Court  in  favor  of  the  defendants  upon  the  dismissal 
of  the  complaint  directed  by  the  court  after  a  trial  at  the  New  York 
Circuit  before  the  court  and  a  jury. 

Parker,  J.  This  appeal  brings  up  a  judgment  entered  on  the  dis- 
missal of  the  complaint,  after  the  opening  address  to  the  jury  by 
plaintiff's  counsel,  which  was  taken  down.  From  the  complaint  and 
opening  it  appears  that  the  plaintiff  was  injured  by  the  fall  of  the 
grand  stand  at  the  Yale-Princeton  football  game  on  Thanksgiving 
Day,  1890,  on  grounds  in  possession  of  "  The  Brooklyns,  Limited," 
a  corporation  organized  under  the  laws  of  the  state  of  New  York. 

The  action  was  brought  against  "  The  Brooklyns,  Limited,"  and 
Messrs.  Linton,  Chauncey  and  Wallace,  who  were  appointed  a  com- 
mittee of  the  board  of  directors  of  "  The  Brooklyns,  Limited,"  to 
put  the  grounds  in  condition  for  the  exhibition  of  the  game. 

"The  Brooklyns,  Limited,"  made  default,  and  the  question  pre- 
sented to  the  trial  court,  upon  the  motion  to  dismiss  the  complaint, 
was  whether,  from  the  complaint  and  opening,  a  cause  of  action 
against  the  individual  defendants  was  stated  ?  It  was  conceded  that 
the  individual  defendants  did  not  have  any  lease  from  "  The  Brook- 
lyns, Limited,"  nor  any  one  else,  running  to  them,  and  the  sole 
ground  upon  which  the  plaintiff  sought  to  charge  them  with  liability 
was,  that  they  were  appointed  a  committee  by  the  directors  of  the 
corporation  to  erect  a  stand  and  otherwise  provide  for  the  reception 
and  convenience  of  the  public,  and  that  by  reason  of  their  negligent 
omission  of  duty  there  was  a  defective  construction  of  the  stand, 
which  led  to  its  falling,  resulting  in  injury  to  the  plaintiff.  As  it 
was  conceded  that  "  The  Brooklyns,  Limited,"  was  a  domestic  corpo- 
ration duly  organized  under  the  laws  of  this  state,  and  in  possession 
of  the  premises  when  the  stand  was  erected,  and  also  at  the  time  of 
the  accident,  liability  against  the  individual  defendants  could  not  be 


822  VAN  ANTWERP  V.   LINTON.  [CHAP.  XXVT. 

predicated  upon  their  being  directors,  officers,  or  stockholders  in 
such  corporation.    (Demarest  v.  Flack,  128  N.  Y.  205.) 

That  they  were  the  agents  of  the  corporation  in  directing  and 
superintending  the  erection  of  the  stand  was  assumed  by  the  learned 
trial  judge,  as  he  was  bound  to  do,  uppn  the  complaint  and  opening, 
and  he  reached  the  conclusion  that  the  acts  with  which  they  were 
charged  constituted  non-feasance,  and  not  misfeasance.  If  he  was 
right  in  such  respect  it  is  conceded  that  the  complaint  was  properly 
dismissed,  for  whatever  may  be  the  rule  in  other  jurisdictions,  it  is 
conceded  that  in  this  state  an  agent  or  servant  is  not  liable  to  third 
persons  for  non-feasance.^  As  between  himself  and  his  master  he  is 
bound  to  serve  him  with  fidelity,  and  for  a  breach  of  his  duty  he 
becomes  liable  to  the  master,  who  in  turn  may  be  charged  in  damages 
for  injuries  to  third  persons  occasioned  by  the  non-feasance  of  the 
servant.  For  misfeasance  the  agent  is  generally  liable  to  third 
parties  suffering  thereby.  The  distinction  between  non-feasance  and 
misfeasance  has  been  expressed  by  the  courts  of  this  state  as  follows : 
"  If  the  duty  omitted  by  the  agent  or  servant  devolved  upon  him 
purely  from  his  agency  or  employment,  his  omission  is  only  of  a 
duty  he  owes  his  principal  or  master,  and  the  master  alone  is  liable. 
While  if  the  duty  rests  upon  him  in  his  individual  character,  and  was 
one  that  the  law  imposed  upon  him  independently  of  his  agency  or 
employment,  then  he  is  liable."    (Bums  v.  Pethcal,  75  Hun,  443.) 

Appellant  urges  that  although  these  individual  defendants  were 
charged  by  the  corporation  with  the  duty  of  erecting  this  stand,  and 
the  acts  complained  of  consisted  in  omitting  to  provide  for  a  con- 
struction of  sufficient  strength  to  withstand  the  strain  to  which  it 
was  subjected,  nevertheless  they  were  guilty  of  misfeasance  rather 
than  non-feasance. 

With  commendable  diligence  he  has  brought  to  our  attention 
authorities  in  other  jurisdictions  tending  to  support  his  contention, 
but  we  refrain  from  their  consideration,  because  it  is  our  under- 
standing that  the  courts  of  this  state  have  determined  otherwise. 

In  Murray  v.  Usher  (117  N.  Y.  542),  the  plaintiff,  while  employed 
upon  a  platform  in  a  saw-mill  belonging  to  two  of  the  defendants, 
sustained  injuries  by  reason  of  its  falling  which  occasioned  his  death. 
His  administrator  brought  an  action  against  the  owners  of  the  mill 
and  one  Lewis,  who  was  their  superintendent,  having  general  charge 
of  the  business,  and  being  specially  instructed  to  look  after  the 
necessary  repairs,  which  included  the  duty  of  inspecting  the  plat- 
form from  time  to  time,  to  see  that  it  was  kept  in  a  safe  condition. 

Judgment  was  recovered  against  all  of  the  defendants.     In  the 

»  In  Ellis  V.  Southern  Ry.  Co.,  72  S.  C.  465,  Mr.  Justice  Gary,  writing  the  opinion, 
at  page  473,  says  :  "  The  true  rule  deduclble  from  the  authorities  is  that  the  servant 
Is  personally  liable  to  third  persons  when  his  wrongful  act  is  the  direct  and  proxi- 
mate cause  of  the  injury,  whether  such  wrongful  act  be  one  of  non-feasance  or 
misfeasance." 


CHAP.  XXVI.]  servant's  LIABILITY   FOR  TORTS.  823 

Court  of  Appeals  the  question  of  the  superintendent's  liability  was 
considered,  the  court  holding  that  the  omission  of  the  superintend- 
ent to  perform  the  duty  devolving  upon  him  constituted  non-feasance 
for  which  he  was  not  liable  in  a  civil  action,  but  that  his  employers 
were.*  That  case,  it  will  be  observed,  is  directly  in  point  with  the 
one  under  consideration.  Lewis,  the  superintendent,  neglected  to 
perform  the  duty  which  his  employers  intrusted  to  him,  and  such 
neglect  led  to  the  fall  of  the  platform,  which  caused  plaintiff's  injury. 
In  this  case  the  defendants  were  engaged  in  superintending  the  erec- 
tion of  the  stand ;  as  more  than  one  was  charged  with  such  duty,  they 
were  called  a  committee,  but  the  duties  devolved  upon  them  were 
of  the  same  general  character  as  in  Murray's  case,  and  the  charge 
is  that  the  fall  of  the  stand  was  due  to  their  neglect  to  properly  dis- 
charge the  obligations  put  upon  them  by  the  corporation. 

In  Bums  v.  Pethcal  (supra)  an  attempt  was  made  to  recover  of 
a  foreman  for  the  loss  of  the  life  of  an  employee,  due,  it  was  charged, 
to  the  omission  of  the  foreman  to  warn  the  dead  man  of  the  danger 
of  working  in  a  particular  place.  There  was  a  recovery  at  the 
Circuit,  but  the  General  Term  reversed  the  judgment,  holding  that 
a  servant  is  not  liable  jointly  with  his  master  where  the  negligence 
of  the  servant  consists  of  an  omission  of  a  duty  devolved  upon  him 
by  his  employment,  although  he  may  be  liable  where  he  omits  to 
perform  a  duty  which  rests  upon  him  in  his  individual  character, 
and  one  which  the  law  imposes  upon  him  independently  of  his 
employment. 

These  cases  fully  sustain  the  decision  of  the  trial  court. 

The  judgment  should  be  afl&rmed,  with  costs. 

Van  Brunt,  P.  J.,  concurred;  Follett,  J.,  dissented. 

Judgment  a^rmed,  with  costs.* 

*  "  The  general  rule  of  respondeat  avperior  charges  the  master  with  liability 
for  the  servant's  negligence  In  the  master's  business,  causing  Injury  to  third 
persons.  They  may,  In  general,  treat  the  acts  of  the  servant  as  the  acts  of  the 
master.  But  the  agent  or  servant  Is  himself  liable  as  well  as  the  master,  where 
the  act  producing  the  Injury,  although  committed  in  the  master's  business,  is  a 
direct  trespass  by  the  servant  upon  the  person  or  property  of  another,  or  where 
he  directs  the  tortious  act.  In  such  cases  the  fact  that  he  Is  acting  for  another  does 
not  shield  him  from  responsibility.  The  distinction  is  between  misfeasance  and 
non-feasance.  For  the  former  the  servant  Is,  in  general,  liable ;  for  the  latter,  not. 
The  servant,  as  between  himself  and  his  master.  Is  bound  to  serve  him  with  fidelity 
and  to  perform  the  duties  committed  to  him.  An  omission  to  perform  them  may 
subject  third  persons  to  harm,  and  the  master  to  damages.  But  the  breach  of  the 
contract  of  service  Is  a  matter  between  the  master  and  servant  alone,  and  the 
non-feasance  of  the  servant  causing  injury  to  third  persons  is  not,  in  general,  at 
least,  a  ground  for  a  civil  action  against  the  servant  in  their  favor.  (Lane  v. 
Cotton,  12  Mod.  488 ;  Perkins  v.  Smith,  1  Wiis.  328 :  Bennett  v.  Bayea,  5  H.  &  N. 
391 :  Smith's  Mas.  and  Ser.  216,  and  casea  cited.)  "  Murray  v.  Usher,  117  N.  T. 
542,  at  pp.  546,  647. 

*  Affirmed  on  the  opinion  below  in  157  N.  T.  716. 


INDEX. 


ACCOUNTING, 

as  duty  o."  agent,  267,  270-275. 

following  trust  funds  524-528. 
ACCOUNTS, 

state  of,  between  agent  and  undisclosed  principal,  394-397,  427-435, 
ACQUIESCENCE, 

ratification  by,  79,  86-90. 
ACTION, 

against  undisclosed  principal,  389-422. 

by  undisclosed  principal,  422-440. 

to  recover  money  paid  by  mistake  or  fraud,  496,  497,  567-569. 

in  equity  to  recover  trust  funds,  524-528. 

against  agent  by  third  party,  529-567,  570-582. 

against  agent  of  infant  principal,  535-537. 

against  third  party  by  agent,  539-541. 
ADMISSIONS    OF    AGENT, 

when  binding  on  principal,  441-450. 

AGENCY, 

formation  of, 

by  agreement,  11-56. 

by  insanity,  22-25. 

by  ratification,  57-126. 

by  estoppel,  127-146. 

by  necessity,  147-165. 
termination  of, 

by  accomplishment  of  purpose,  166-168. 

by  revocation,  168-174,  191-208. 

by  change  affecting  subject-matter,  175-178. 

by  death,  179-187. 

by  war,  188-191. 
irrevocable  agencies,  191-208. 
AGENT, 

distinguished  from  servant,  1-7. 
may  also  be  servant,  7,  8. 
appointment  by  infant,  16-19. 
competency  of,  40-42. 
partnership  acting  as,  43-45. 
form  of  contract  of  appointment,  48-56. 
distinguished  from  trustee,  166. 
compensation  of,  209-249. 
rights  against  principal,  209-255. 


826  INDEX. 

AGENT  (contmued). 

reimbursement  and  indemnity,  250-255. 
obligations  to  principal,  256-297. 
gratuitous  agents,  289-297. 
liability  to  tliird  person,  529-567,  570-582. 
rights  against  third  person,  539-541. 

AGREEMENT, 

formation  of  agency  by,  11-56. 
consideration  for,  210-211. 

APPARENT  AUTHORITY  OF  AGENT, 

operates  by  way  of  estoppel,  130-133,  135-139. 
distinguished  from  implied  authority,  131, 
principal  bound  within  scope  of,  298-361. 
apparent  authority  to  warrant,  323-333. 
-apparent  authority  of  travelling  salesman,  340-352. 
how  affected  by  custom,  315-318,  363-367 
apparent  authority  to  sell  on  credit,  351-356. 
apparent  authority  of  broker,  363-367. 
in  case  of  undisclosed  principal,  390-392. 
in  case  of  fraud,  472-495. 
warranty  of,  by  agent,  529-535. 

ATTORNEYS-AT-LAW, 

not  embraced  within  statutory  term  f  employee",  10. 
scope  of  authority  of,  377-386. 

AUCTIONEERS, 

scope  of  authority  of,  367-377. 
liability  of,  to  third  persons,  365-366. 

AUTHORITY   OF   AGENT, 
how  conferred,  11-165. 
how  terminated,  166-208. 
how  ascertained,  298-388. 

when  acting  for  undisclosed  principal,  389-394. 
warranty  of,  529-535. 

See  Apparent  Authority  of   Agent.) 

AUTHORITY    OF    AGENT    FOR    DISCLOSED    PRINCIPAL, 
scope  of  authority  generally,  298-319. 
scope  of  particular  powers, 

agent  in  charge  of  business,  319-323. 

authority  to  sell  personal  property,  321,  322,  324,  326,  329-331,  356, 
363-367. 

authority  to  warrant,  323-333,  368,  369. 

authority  to  sell  real  property,  334-338. 

authority  to  collect,  338-340. 

authority  of  salesman  in  store,  340-344. 

authority  of  travelling  salesman,  344-348. 

authority  to  receive  payment,  139-145,  349,  350,  357-361,  363-367    j 

authority  to  tell  on  credit,  351-353. 

authority  to  buy  on  credit,  353-356. 
in  special  forms  of  agency, 

factors,  361-363. 

brokers,  363-367. 

auctioneers,  367-377. 

attomeys-at-law,  377-386. 

bank  cashiers,  386-388. 


INDEX.  827 


ASSUMPTION   OF   RISK, 
doctrine  of,  773-815. 

how  affected  by  promise  to  repair,  779-789. 
how  affected  by  statute,  789-815. 
distinguished  from  contributory  negligence,  815» 


B. 

BANK, 

liability  for  collection  of  paper,  283-288. 

liability  of  gratuitous  directors,  295. 

powers  of  cashier  of,  386-388. 

liability  upon  paper  signed  by  cashier,  554-556. 

BILL   OF   LADING, 

issue  of  fictitious,  487-492. 

BROKERS, 

scope  of  authority  of,  363-367. 


c. 

CASHIER   OF   BANK, 

scope  of  authority  of,  386-388. 

signing  negotiable  instrument,  554-556. 
CHARITIES, 

liabiUty  for  torts  of  agents,  670-690. 
CLERK, 

construction  of  statutory  term,  9,  10. 

CLUBS.    See  Voluntary  Societies. 
COMPENSATION    OF    AGENT, 

for  authorized  acts,  209,  210. 

for  gratuitous  service,  210-212. 

when  dependent  upon  performance  of  conditions,  212-222. 

after  revocation  of  agency,  222-235. 

after  renunciation  of  agency,  235-237. 

when  agent  acts  for  both  parties,  237-248. 

for  illegal  services,  248,  249. 

COMPETENCY    OF    PARTIES, 
infant  principals,  16-19. 
insane  principals,  20-29. 
married  women  as  principals,  30-32. 
unincorporated  societies  as  principals,  32-39. 
infant  agents,  40. 
slaves  as  agents,  40-42. 

COMPULSORY    EMPLOYMENT    OR   SERVICE, 

UabiUty  for  servant  compulsorily  employed,  631-633. 

status  of  one  compelled  to  serve,  633,  634. 
CONDUCTOR, 

agency  of  necessity  of  railway,  152-159. 
CONTRACT, 

agency  by,  11-15. 

by  agent  for  infant  principal,  15-19,  535-537. 

by  agent  for  insane  principal,  20-30. 


828  INDEX. 

CONTRACT  (continued). 

by  agent  for  unincorporated  club,  32-39,  538. 

by  agent  for  foreign  principal,  542,  543. 

formal  appointment  of  agent  to  make,  48-56. 

by  promoters  for  prospective  corporation,  57-61, 

by  agent  without  authority.     See  Ratification,    Estoppel,    Necessity, 
Warranty  of  Authority. 

by  agent  in  behalf  of  disclosed  principal,  298-388. 

by  agent  in  behalf  of  undisclosed  principal,  389-440. 

by  agent  under  seal,  410-417. 

by  agent  in  negotiable  instrument,  418-422,  543-562. 

by  agent  in  simple  contract,  539-541,  564-565. 

by  agent  having  interest  in  subject-matter,  565,  566. 
CONTRACTOR,    INDEPENDENT.     See  Independent  Contractob. 

CONVERSION, 

liability  of  third  person  to  principal  for,  497-519. 

liability  of  agent  to  third  person  for,  579-582. 
CORPORATION, 

stockholder's  statutory  liability  to  employees,  9,  10. 

ratification  of  contracts  of  promoters,  57-61. 

liability  for  torts  of  agents,  470-475,  483-486,  490-495. 

liability  for  torts  of  sub-agents,  635-638. 

charitable,  liability  for  torts  of  agents,  670-690. 
CRIMES    OF    AGENT    OR    SERVANT, 

liability  of  principal  for,  693-704. 
CUSTOM, 

proof  of,  to  establish  authority,  315-318,  363-367,  386-388. 


D. 

DAMAGES, 

after  revocation  of  agency,  222-232. 
DEATH, 

effect  upon  agent's  authority,  179-187. 
DECEIT, 

liability  of  principal  for  agent's,  472-495. 

liability  of  agent  for,  529-535. 

liability  of  third  person  for,  519-524. 

DECLARATIONS    OF    AGENT, 

when  binding  on  principal,  441—450. 

cannot  prove  agency,  444-447, 

(See  Testimony  of  Agent.) 
DEED.    See  Sealed  Instruments. 

DELEGATION    OF    DUTIES    BY    AGENT.     (See  Sub-Agento.) 
DISSOLUTION  OF  AGENCY.    (See  Termination  of  Agency.) 
DRUMMER.     (See  Travelling  Salesman.) 


E. 

ELECTION, 

to  hold  agent  or  principal,  397-409. 

of  third  person  to  recede  from  unauthorized  contract,  99-108. 


INDEX.  829 

ESTOPPEL, 

agency  by,  127-146. 

distinguished  from  ratification,  128,  129. 

elements  of,  133-135. 

of  principal  to  deny  that  agent  is  principal,  435-438. 

in  case  of  torts  by  agent,  490-492. 
EVIDENCE, 

to  show  that  agent  is  acting  for  undisclosed  principal,  410-413,  416    417 
422-425.  '         * 

to  vary  terms  of  written  instrument,  437-440. 

admissions  of  agent  as,  441-450. 

EXECUTION    OF    INSTRUMENTS, 
simple  contracts,  539-541,  564,  565. 
sealed  instruments,  410-417. 
negotiable  instruments,  418-422,  543-562. 
under  Statute  of  Frauds,  48-50. 


FACTORS, 

scope  of  authority  of,  350-352,  361-363. 
FACTORS    ACTS, 

construction  and  effect  of,  507-519. 
FALSE    REPRESENTATIONS.     {See  Fraud  ;   Deceit.) 
FELLOW-SERVANT    RULE, 

doctrine  of,  705-725. 
FOREIGN    PRINCIPAL, 

liability  of  agent  of,  542,  543. 
FORM, 

of  contract  appointing  agent,  48-56. 

of  ratification,  108-110. 

FRAUD, 

liability  of  principal  for  agent's,  472-495. 
when  for  benefit  of  principal,  472—479. 
when  for  benefit  of  agent,  480-495. 
liability  of  third  person  to  principal  for,  519-524. 
FRAUDS,    STATUTE    OF.     (See  Statute  of  Frauds.) 

G 

GENERAL    AND    SPECIAL    AGENTS, 

distinction  between,  137,  314,  318,  321,  322. 
GOOD    FAITH, 

duty  of  agent  to  principal,  264-270. 
GRATUITOUS    AGENT, 

subsequent  promise  to  compensate,  210-212. 

obligations  of,  to  principal,  289-297. 

H. 

HOLDING    OUT.     (5ee  Estoppel.) 
HUSBAND    AND    WIFE, 

agency  of  wife  by  necessity,  147-150. 


830  INDEX. 

I. 

IDENTITY,    FICTION   OF, 

in  relation  of  master  and  servant,  119. 
ILLEGALITY, 

of  contract  in  ratification,  110-117. 
IMPLIED    AUTHORITY, 

distinguished  from  apparent  authority,  131. 
IMPOSSIBILITY, 

as  discharging  agency,  177,  178. 
INDEMNITY, 

of  agent  by  principal,  250-255. 
INDEPENDENT    CONTRACTOR, 

distinguished  from  servant  or  agent,  584-589. 

effect  of  controlling  or  interfering  with,  587-591. 

effect  of  contract  provisions  relating  to  supervision,  etc.,  of,  by  employer, 

587-591. 
exceptions  to  rule  of  non-liability  of  employer: 

selecting  incompetent  contractor,  598,  604-608. 
contracting  for  nuisance,  599,  601,  603. 
contracting  for  unlawful  acts,  599,  603. 
contracting  for  very  act  done,  598. 
statutory  requirements,  599,  603,  608-614. 
extra-hazardous  work,  598,  599,  602. 
interference  by  employer,  587-591. 
personal  negUgence  of  employer,  598,  603. 
when  duty  rests  upon  employer,  608-614. 
INDICIA    OF    OWNERSHIP, 

liabiUty  of  principal  for  conferring  on  agent,  505-507. 
INFANT, 

contracts  of,  as  principal,  16-19. 
ratification  of  infants'  contracts,  17-19. 
may  act  as  agent,  40. 
INSANE    PRINCIPAL, 
contracts  of,  20-29. 
burden  of  proof,  26-29. 
IRREVOCABLE    AGENCIES^ 
doctrine  of,  191-208. 

J. 

JOINT   AGENTS, 

doctrine  of,  42-47. 

partnerships  acting  as,  43-45. 
JOINT    PRINCIPALS, 

severance  revokes  agency,  167. 
JOINT   TORT-FEASORS, 

principal  and  agent  as,  579. 
JUDGMENT, 

as  evidence  of  election,  397-407. 

K. 

KNOWLEDGE.     {See  Notice.) 


INDEX.  831 


LABORER, 

construction  of  term  in  statutes,  9,  10. 
LIABILITY    OF   AGENT, 

to  principal.     {See  Obligations  of  Agent  to  PRiNcir4L.i 
to  third  party, 

upon  unauthorized  contract,  529-535. 
when  acting  for  incompetent  principal,  535-537. 
when  acting  for  fictitious  principal,  538. 
when  credit  extended  to  agent  exclusively,  539-542. 
when  acting  for  foreign  principal,  542,  543. 
when  contracting  in  agent's  own  name, 
in  sealed  instrument,  410-417. 
in  negotiable  instrument,  543-562. 

construction  from  signature  alone,  543-550. 

construction  from   signature   aided   by   recitals   in   instru-' 

ment,  550-554. 
construction  from  signature  aided  by  marginal   headings   or 

memoranda,  554-560. 
agent  as  endorser,  560-562. 
for  undisclosed  principal,  562,  563. 
in  simple  contract,  564,  565. 
liability  arising  from  interest  in  subject-matter,  565,  566. 
when  neither  principal  nor  agent  bound,  566,  567. 
for  money  received  through  mistake  or  fraud,  567-569. 
for  non-feasance,  570-578,  816-823. 
for  misfeasance,  578-582,  816-823. 
LIABILITY   OF   PRINCIPAL, 

to  agent.     {See  Obligations  of  Principal  to  Agent.) 
to  third  party, 

for  agent's  contracts  in  behalf  of  disclosed  principal,  298-388. 
for  agent's  contracts  in  behalf  of  undisclosed  principal,  389-437. 
based  on  admissions  and  declarations  of  agent,  441-450. 
based  on  notice  to  agent,  451-469. 
for  torts  of  agent,  470-495. 

LIABILITY   OF   THIRD    PARTY, 

to  agent,  167,  410-413,  496,  497,  539-542. 
to  principal, 

upon  contracts,  422-427. 

in  quasi-contracts  for  money  paid  under  mistake,  duress,  or  fraud, 

496,  497. 
in  tort  for  property  diverted  by  agent, 
general  rule,  497-505. 
exceptions: 

indicia  of  ownership,  505-507. 
factors  acts,  507-519. 
for  fraud  in  collusion  with  agent,  519-524. 
in  equity  for  trust  funds  diverted  by  agent,  524-528. 


M. 

MAJORITY, 

when  acts  of  may  bind  all,  45-48. 


832  INDEX. 

MARRIED   WOMEN, 

as  principals,  30-32. 

as  agents,  147-150. 
MASTER, 

when  liable  to  third  person  for  torte  of  servant,  645-692. 

when  liable  to  third  person  for  crimes  of  servant,  693-704. 

when  liable  to  one  servant  for  torts  of  another  servant,  705-736. 

when  liable  for  torts  of  sub-servant,  635-641. 

ratification  of  torts  of  servant,  119-122. 
MISFEASANCE, 

liability  of  agent  or  servant  to  third  persons  for,  oi  8-582,  816-823. 
MISREPRESENTATION, 

of  agent  as  to  authority,  529-535. 
MISTAKE, 

effect  upon  ratification,  93-99. 

MUNICIPAL    CORPORATIONS, 

liability  for  servant's  torts,  662-670. 

N. 

NECESSITY, 

agency  by,  147-165. 

agency  of  wife,  147-150. 

agency  of  child,  151. 

agency  of  employees^  152-165. 
NEGLIGENCE    OF    AGENT, 

liability  to  principal  for,  261-264,  289-297. 

liability  to  third  persons  for,  570-578. 
NEGOTIABLE    INSTRUMENTS, 

liability  of  agent  who  signs,  543-562. 

liability  of  agent  who  wrongfully  sells,  579-582. 
NON-ASSIGNABLE    DUTIES    OF   MASTER, 

competent  servants,  737-743. 

safe  place  to  work,  743-749. 

repairs,  749-765. 

safe  tools  and  appliances,  749-765. 

inspection,  761-765. 

rules  and  regulations,  765-770. 

instructions  to  servants,  770-773. 

NON-FEASANCE, 

liability  of  agent  of  servant  to  third  party  for,  570-578,  816-823. 
NOTICE   TO   AGENT, 

when  notice  to  principal,  78,  451-469. 

o. 

OBEDIENCE, 

duty  of  agent  to  principal,  256-261. 
OBLIGATIONS    OF    AGENT   TO    PRINCIPAL, 

obedience,  256-261. 

prudence,  261-264. 

good  faith,  264-270. 

accounting,  267,  270-275. 


INDEX.  833 


OBLIGATIONS   OF   PRINCIPAL   TO   AGENT, 
compensation.     (See  Compensation  of  Agent.) 
reimbursement  and  indemnity,  250-255. 


P. 

PAROL   EVIDENCE, 

to  introduce  undisclosed  principal  into  a  contract,  410-413,  423,  437,  438, 

539-541,  543-565. 
to  remove  ambiguity,  545,  555,  560-562. 

PARTNERSHIPS, 

acting  as  agents,  43-45,  189,  190. 

PAYMENT, 

authority  of  agent  to  receive,  139-145. 

PENALTIES    INCURRED    BY    SERVANTS, 
liability  of  master  for,  693-701. 

POWER   COUPLED    WITH    AN    INTEREST, 
as  rendering  agency  irrevocable,  191-208. 

POWER   OF   ATTORNEY, 
by  infant,  16-19. 
by  insane  person,  20-22. 

PRINCIPAL, 

competency  of,  16-39. 

by  agreement,  11-56. 

by  ratification,  57-126. 

by  estoppel,  127-146. 

by  necessity,  147-165. 

revocation  by,  168-174,  191-208. 

obligations  to  agent,  209-255. 

rights  against  agent,  256-275. 

liabilities  to  third  persons,  298-440,  470-495. 

rights  against  third  persons,  496-528. 

PRIVITY    OF   CONTRACT, 

between  principal  and  sub-agents,  283-288. 

between  undisclosed  principal  and  third  persons,  389-440. 

PROMOTERS, 

ratification  of  contract  of,  5&-61. 

PRUDENCE, 

agent's  duty  to  principal,  261-264. 

PUBLIC   CHARITIES, 

liability  for  servant's  torts,  670-690. 

PUBLIC    OFFICERS, 

liability  for  servant's  torts,  660-662. 

liability  of  private  person  when  employing,  691,  692. 


Q. 

QUASI-CONTRACT, 

liability  of  third  person  in,  496,  497. 
liability  of  agent  in,  567-569. 

53 


834  INDEX. 

R. 

RATIFICATION, 

of  infant's  contracts,  17-19. 

agency  by,  57-126. 

act  must  be  performed  in  behalf  of  existing  person,  57-74. 

by  corporation  of  contract  of  promoters,  57-61. 

assent  may  be  express  or  implied,  74-99. 

by  one  in  whose  behalf  contract  not  made,  64-70. 

by  receiving  fruits  of  contract,  71,  79-85. 

by  silence,  86-90,  124-126. 

must  be  in  toto,  84,  85,  92. 

must  be  free  from  mistake  or  fraud,  93-99. 

may  other  party  withdraw  before,  99-108. 

is  new  assent  of  other  party  necessary,  104-108. 

form  of,  108-110. 

legality  or  validity  of  act  ratified,  110-117. 

of  notice  of  intent,  110    111,  277. 

of  forgery,  112-117. 

is  new  consideration  necessary,  118. 

of  torts,  119-122. 

legal  effects  of,  117-126. 

as  between  principal  and  other  party,  117-122. 

as  between  principal  and  tliird  parties,  122. 

as  between  principal  and  agent,  123-126. 
distinguished  from  estoppel,  128,  129. 
REAL    ESTATE    AGENTS, 

when  entitled  to  commissions.  212-222. 
acting  for  both  parties,  237-248,  267-270. 

REIMBURSEMENT, 

of  agent  by  principal,  250-255. 
RELATIONSHIP, 

does  not  confer  authority  to  act  as  agent,  151. 
RENUNCIATION, 

of  agency  by  agent,  235-237, 
RES   GESTAE, 

meaning  and  app^cation  of  term,  443,  448-450. 
REVOCATION. 

of  agency  by  principal,  168-174 

s. 

SALE, 

authority  of  agent  to  make,  317,  318,  361-363,  496,  497,  505,  506,  516- 
519,  533-535,  579-582. 
SCOPE   OF   AUTHORITY.    {See  Authoritt  ;   Apparent  Authority.) 
SEALED    INSTRUMENTS, 

authority  of  agents  to  execute,  48-56. 

parties  cannot  be  introduced  into  by  parol,  410-413. 

liability  of  agent  who  signs,  410-413. 
SERVANT, 

distinguished  from  agent,  1-7. 

may  also  be  agent,  7,  8. 


IXDEX.  835 

SERVANT  (continued). 

construction  of  term  in  statutes,  9,  10. 
master  liable  for  torts  of,  645-692. 
liability  to  third  persons  for  torts,  816-823. 

SIGNATURE    OF   AGENT, 

to  simple  contract,  422-424,  437,  438,  564,  565. 
to  sealed  instrument,  410-417. 
to  negotiable  instrument,  543-562. 

SILENCE, 

whether  evidence  of  ratification,  86-90,  124-126. 

SLAVE, 

may  act  as  agent,  40-42. 

SPECIAL   AGENT, 

whether  to  be  distinguished  from  general  agent,  137,  314,  318,  321,  322, 
476. 

STATUTE    OF    FRAUDS, 

contracts  by  agent  under,  48-50. 

as  affecting  liability  of  agent,  410-413. 

STOCK, 

liability  of  principal  for  issue  of  fictitious,  by  agent,  480-486. 

STOCKHOLDER, 

statutory  liability  to  agents  and  servants,  9,  10. 

SUB-AGENTS, 

power  of  agent  to  appoint,  275-288. 
liability  of  principal  for  torts  of,  635-638. 
notice  to,  464-466. 

SUB-SERVANTS, 

liability  of  master  for  torts  of,  635-638. 

SUPERIOR   OFFICER, 

whether  a  vice-principal,  725-731. 


T. 

TELEGRAM, 

liability  of  principal  for  sending  of  forged,  by  agent,  492-495. 

TERMINATION    OF    AGENCY, 
by  insanity,  22-26. 

by  accomplishment  of  purpose,  166-168. 
by  revocation,  168-174. 
by  change  affecting  subject-matt«r,  175-178. 
by  death,  179-187. 
by  war,  188-191. 

where  partnerships  acting  as  agents,  189,  190,  235. 
by  dissolution  of  corporations,  232-235. 

TESTIMONY    OF    AGENT, 

when  competent  to  prove  agency,  444—447. 

THIRD    PERSON, 

UabiUty  to  principal,  422-427,  496-528. 

liabiUty  to  agent,  167,  410-413,  496,  497,  539-542. 


8-36  INDEX. 

TITLE  TO   PROPERTY, 

when  sold  without  authority,  497-506,  516-519. 

TORTS   OF   AGENT, 

liability  of  principal  for,  generally,  470-472. 
for  benefit  of  principal,  472-479. 
for  benefit  of  agent, 

fictitious  stock,  480-486. 

fictitious  bill^  of  lading,  487-492. 

forged  telegram,  492-495. 

TORTS   OF   SERVANT, 

liability  of  master  for,  645-659. 

use  of  dangerous  instrumentalities,  654-659. 

TRANSFER   OF   SERVICE, 

hiring  machine  and  operator,  615-617. 
hiring  horse  and  driver,  617-630. 

TRAVELLING    SALESMAN, 

embraced  within  statutory  term  "clerk,"  9. 

not  within  statutory  term  "laborer,"  10. 
scope  of  authority  of,  344-348. 

TRUSTEE, 

distinguished  from  agent,  166. 

TRUST    FUNDS, 

may  be  followed  into  hands  of  third  persons,  524-528. 


u. 

UNDISCLOSED   PRINCIPAL, 

liability  of:  general  rule,  389-394. 

exception  as  to  state  of  accounts,  394-397. 
based  on  election,  397-410. 
as  to  sealed  instruments,  410-417. 
as  to  negotiable  instruments,  418-422. 
rights  of:   general  rule,  422-427. 

exception  as  to  state  of  accounts,  427—435. 

where  exclusive  credit  given  to  agent,  435-437. 
as  to  varying  written  instrument,  437—440. 

UNINCORPORATED    OR   VOLUNTARY    SOCIETIES, 
as  principals,  32-39. 
habiUty  of  agent  of,  538. 
not  partnerships,  34,  38. 


V. 

VICE-PRINCIPAL    DOCTRINES, 
superior  officer  test,  725-731. 
non-assignable  duty  test,  731-736. 

VOLUNTEERS, 

whether  their  acts  render  involuntary  master  liable,  639-641. 

whether  they  may  recover  for  injury  occasioned  by  a  servant,  641-644. 


INDEX.  837 

w. 


WAR, 

efifect  of,  on  agency,  188-191. 
WARRANTY, 

authority  of  agent  to  give,  323-333. 
WARRANTY    OF   AUTHORITY, 

liability  of  agent  for,  529-535,  566,  567. 


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